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Judge upholds tax ruling against nursing home

May 03, 2006|by DON AINES

CHAMBERSBURG, Pa. - A decision by the Franklin County Board of Assessment and Revision of Taxes to revoke the tax-exempt status of Menno Haven's nursing home has been upheld in a ruling by Franklin County President Judge John R. Walker.

The skilled nursing facility at Menno Haven has been exempt from county, Chambersburg and Chambersburg Area School District property taxes since it was established in 1967, according to the ruling. The exemption was revoked by the assessment board following an Oct. 18, 2004, hearing.

The board's decision was appealed by Menno Haven to the Court of Common Pleas and was the subject of a trial before Walker in February. The decision was filed Monday in the County Prothonotary's Office.

"We're pleased that the judge upheld our decision," said County Commissioner G. Warren Elliott who, as a member of the Board of County Commissioners, is also on the assessment board. "We're glad to have this matter resolved," he said Tuesday.

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"The judge heard the same evidence we did ... and he came to the same conclusion," Commissioner Bob Thomas said.

"As far as I'm concerned, and as far as Menno Haven is concerned, this is a very unfortunate decision and we are prepared to take the steps to ensure that the proper decision is made," Menno Haven President Rod Mason said Tuesday. He said the continuing care retirement community likely will pursue the matter in a higher court.

In 2001, Menno Haven appealed to the assessment board for tax-exempt status for its independent and assisted living facilities at Menno Haven and Penn Hall. Thomas and Gary Martin, the chief appraiser for the county, said it was during the discovery process for that appeal that the school district challenged the tax-exempt status of the nursing home.

At issue was whether Menno Haven met a five-part test established in an earlier court case to show it qualified as a purely public charity under Pennsylvania law. To do so, an entity must advance a charitable purpose; donate a substantial portion of its services; benefit those "who are legitimate objects of charity;" relieve the government of some of its burden and operate free of the profit motive, according to Walker's opinion.

The nursing home met some of those criteria, but not others, Walker wrote.

Former Menno Haven Chief Financial Officer David Bishop "testified that Menno Haven's written financial admission policy is only a rough guideline and is not strictly enforced," according to Walker, who wrote that the court found that testimony "to lack credibility."

Walker wrote that, in most cases, those applying for admission to the nursing home had to show financial resources of more than $100,000 to cover the cost of their care and that "Menno Haven's 2004 Medicaid eligible population was quite low."

The judge wrote that 3.6 percent of the residents at the nursing home on Scotland Avenue were Medicaid-eligible in 2004, with the remainder either private pay or Medicare clients. From 2000 to 2004, Walker wrote that most of the Medicaid-eligible residents of the home came there from either the assisted or independent living facilities and that Menno Haven was contractually obligated to care for them.

During the same year, Walker wrote that 65 percent of the residents at Quincy (Pa.) United Methodist Home were on Medicaid. Those numbers were 82 percent at the county's Falling Spring Nursing and Rehabilitation Center and about 50 percent at the Shook Home in Chambersburg.

"The other three homes are suffering financially because of their commitment to serving Medicaid recipients while Menno Haven is financially prospering," Walker wrote. In the opinion, Walker also noted Menno Haven made no disbursements from its Benevolent Care Fund in 2002 or 2003 and the one 2004 disbursement was $100,000 that went to Menno Haven's general fund.

Martin said the estimated real estate tax from the nursing home to the county, borough and school district totals $167,000.

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