Update: Week of May 25, 2009

GENERAL INFORMATION

Tax Credit Guidance Announced by HUD

At the National Association of REALTORS® Real Estate Summit on May 12, 2009, Housing and Urban Development (HUD) Secretary Shaun Donovan announced a program that allows borrowers to use the first-time homebuyer tax credit for a down payment or closing costs on an FHA-insured mortgage. Further details of the program were announced on May 29. Government entities and instrumentalities of government may provide a second mortgage. Currently, 10 state housing finance agencies offer a product buyers can use that will effectively monetize the tax credit for down payment purposes. These states are Colorado , Delaware , Idaho , Kentucky , Missouri , New Jersey , New Mexico , Ohio , Pennsylvania , and Tennessee . The 3.5 percent down payment may also be a gift from a family member, employer or nonprofit, charitable organization. Click here to read a copy of just-released mortgagee letter. Guidance also released allows lenders to offer the monetized tax credit for down payments in excess of 3.5 percent, closing costs and interest rate buy downs. Mortgage industry leaders have indicated that this type of product may not be immediately available to consumers as lenders will need time to develop documentation for what will effectively be personal loans to the home buyer. If you have questions about this new HUD program, please contact Jerry Nagy (jnagy@realtors.org).



New Philadelphia BRT data may be flawed from the start

In the Philadelphia Board of Revision of Tax’s records, garages often appear where there aren't any and three-story townhouses mysteriously grow another floor. One home seemed to shrink - from about 5,000 square feet to 3,700. With its new, "actual value" numbers, the city will ask thousands of Philadelphia homeowners to pay sharp increases in property taxes. The proposed assessments are, in fact, generally much closer to the homes' real value than the current ones. But an Inquirer examination of the BRT's records for the block reveals a number of mistakes in the descriptions of properties - errors likely to throw off the new numbers as well. Although the new computer-driven values are an improvement, experts say there is no way that the formulas - without a huge number of inspections by appraisers - can find all the errors in the BRT's property records. This could be a massive headache for the BRT and the city's elected officials. Fixing the assessments is already a tough sell; it will be immeasurably harder if the public decides the BRT's numbers can't be trusted. Click here for the full article.

Source: Philadelphia Inquirer; 5/24/09





BUCKS COUNTY



Central Bucks approves $172 tax hike

The Central Bucks School Board unanimously approved the $276.5 million 2009-2010 budget this week with a tax increase of 3.9 percent. The millage rate was set at 114.8 mills, which will result in a tax increase of $172 for the average homeowner with a property assessed at $40,000. Homeowners who have signed up for the state’s homestead rebate program could receive as much as $203 from the state, resulting in a $31 average tax reduction.

Source: The Intelligencer; 5/27/09



Hilltown sees immediate use of newly passed development law

Hilltown Township’s newly passed traditional neighborhood development law has already resulted in new development plans for an 80-acre tract along Green Street . Three years ago, plans were approved to create a 45-unit residential development, but since then, the land changed ownership. The new owners, Middletown Mortgage, presented the township supervisors with a village-style proposal for the land that included 115 housing units, space for a civic building and a section for commercial space. In order for the development to proceed, a zoning change must be approved.

Source: The Intelligencer; 5/29/09



County dedicates 180 acres for land preservation

Bucks County commissioners approved the purchase of three tracts of land for preservation totaling 180 acres. The largest purchase is in Bridgeton Township, which the county will use $1 million in state Department of Conservation and Natural resources funds and another $500,000 from the open space bond referendum. The 102-acre tract has access to the Delaware River , and will be available for camping and recreation. The county also plans to purchase 57 acres for $675,000 for a conservation easement on the grounds of the Pearl S. Buck Foundation in Hilltown. Over 20 acres in Nockamixon that is located next to the Bucks County Horse Park will be purchased for $335,000.

Source: The Intelligencer; 5/29/09









CHESTER COUNTY



West Chester Borough leaves rental fees unchanged

West Chester Borough Council voted 5 to 2 earlier this month to keep the borough's annual rental unit license fees at $42. Some Borough Council members argued that the cost of running the rental inspection program justified increasing the fees to$43.31. The majority of council, recalling lawsuits landlords brought against the borough over rental fees earlier this decade, said it would be best to leave the fees alone. A lawsuit filed nearly a decade ago in which borough landlords argued that the rental unit license fee was unfair because it was based on the cost of running the inspection program as well as on other administrative and operating costs. Judge Juan Sanchez sided with the landlords and ordered the borough to refund to them nearly $200,000. Sanchez also developed a formula which the borough now must use to calculate its rental license fees. Borough Manager Ernie McNeely said the Sanchez Formula determined next year's fees should have been $43.41. He said the figure would have been higher if the inspection department had been fully staffed. McNeely said he expects the inspection department to be fully staffed next year, which means the Sanchez Formula is likely to yield an even higher 2011 fee rate.

Source: Daily Times; 5/29/09



DASD plans 2.5% property tax hike

Residents living in the Downingtown Area School District will see a tax increase of about 2.5 percent next school year, finance administrators said at a meeting on Tuesday night. The school board approved the preliminary 2009-10 budget in February. At that time, the budget stood at $184 million and included a 3.75 percent property tax increase. At Tuesday's finance meeting, district officials announced that the budget now stands at $183.9 million and includes a 2.5 percent tax increase. This is the lowest proposed tax increase the district has had in 14 years. A 2.5 percent hike would raise the tax rate to 25.48 mills, with one mill equal to $1 in tax for every $1,000 in assessed property value. An average taxpayer with a home in the district assessed for tax purposes at $175,000 would therefore generate a school property tax bill of $4,459 — an increase of $109.28 over the prior year. Eligible residents will receive a tax credit of $209 in their school property tax bill from slot revenues. The school board is expected to vote on next year's budget at its June 10 meeting.

Source: Daily Local; 5/29/09



West Chester School District hikes taxes 5.9% in Chester County and 9.4% in Delaware County

School taxes for property owners in the Chester County portion of the West Chester Area School District will increase by 5.9 percent next year. For property owners in the district's Delaware County section, school taxes will go up 9.4 percent. The West Chester Area School Board approved a 2009-2010 final budget on Monday night that calls for $198.7 million in spending. This represents an increase of 3.3 percent over the current year budget, but it comes in the face of a decrease of 6.6 percent in local tax revenue, the district's biggest source of funding, district officials said. Earlier this year the board approved a preliminary budget that included a 6.6 percent tax increase for Chester County and a 10.1 percent increase for Delaware County . The board's finance committee last week recommended dropping these increases a full percentage point. The 2009-2010 tax increase is above the limit set by Act 1, but it does not need to go to referendum, officials said, because the district was able to use several Act 1 exemptions. The district in December 2008 projected a $13.3 million 2009-2010 budget deficit, but due to budget cuts and federal stimulus funding, the gap has been brought down to $6.4 million. The average residential tax bill in the District's Chester County portion will be $3,391, while the average bill in the District's Delaware County portion will be $4,036, officials said. This is based on an average Chester County assessed value of $189,950, and an average Delaware County assessment of $285,000. The millage in the district's Chester County portion will rise 1 mill, to 17.85 mills, while the millage in the district's Delaware County portion will rise 1.22 mills, to 14.16 mills. A mill is a dollar of tax on $1,000 of a property's assessed value.

Source: Daily Times; 5/27/09


Coatesville: A Diamond in the Rough?

Crippled by decades of crime, corruption, poverty and neglect, Coatesville is struggling to redefine its precarious future. Yet, there is life among the ruins—signs that all is not lost. The June issue of Main Line Today provides an in-depth look at the City of Coatesville here.

Source: Main Line Today; 5/29/09









DELAWARE COUNTY



RTM approves final budget

The Rose Tree Media School Board Thursday unanimously approved a general-fund budget of slightly more than $79 million for 2009-2010 that raises the tax rate to 21.625 mills, representing a 2.5 percent increase over the existing millage rate. This is significantly lower than the 6.33 percent increase shown in a preliminary $80.8 million budget that was unveiled in January. It generated overwhelmingly negative public response. Based on an average property assessment of $236,106, the average annual tax increase is just under $126. Property owners who applied and qualified for homestead/farmstead property-tax relief will see a $9,516 reduction in their assessed property value. This equates to a $205.80 reduction in their real-estate tax for the coming school year. Based on the average property assessment, these residents actually will pay almost $80 less in taxes for the 2009-2010 school year than they paid for the current year.

Source: Daily Times; 5/29/09



Springfield School District calling for 4.3 percent tax hike

Springfield School District recently approved its proposed final budget of $57.7 million, which calls for a 4.3 percent tax increase. School directors strongly indicated they will attempt to tighten that figure by the time final budget approval is called for in June. The proposed millage is 26.372, making taxes $3,854 for an average appraisal of $145,155. This is 1.088 mills more than the current year. That $159 increase would be offset by the homestead exemption or tax rebate figure of $168, which is a flat rate for every qualifying property.

Source: Daily Times; 5/29/09



Lines officially drawn on Philly Airport plan

The proposed capacity enhancement plan could expand the airport’s footprint, bringing those planes even lower while displacing at least 72 residences and 3,300 jobs from Tinicum, according to a draft environmental impact statement from the Federal Aviation Administration. Delaware County officials said they hope to gain leverage in negotiations with Philadelphia on the expansion through a joint complaint filed in the Court of Common Pleas Tuesday. The lawsuit seeks a declaratory judgment on the validity of a 1925 statute that provides first-class cities the authority to acquire lands for airports and landing fields outside their borders only “with the consent of the local authorities where such land is situated.” A previous agreement between the township and the city required Philadelphia to get approval from commissioners before buying land in Tinicum, but that pact expired in 2007 and the two sides have been unable to come to terms on a new agreement. If the current runway plan were implemented, Tinicum would suffer the loss of about $216,000 per year in real-estate taxes and $226,000 per year in parking revenues, according to the suit, as either plan requires the acquisition of three privately owned parking facilities. The Interboro School District would similarly lose about $348,000 annually in taxes with the loss of those facilities and Delaware County would lose an estimated $267,000 per year in real-estate taxes, according to the suit.

Source: Daily Times; 5/27/09



Springfield billboard zoning hearing continues

The testimony centered on the comments of civil engineer Michael Tantala Thursday night as the zoning board continued the hearing regarding the installation of six billboards along Baltimore Pike. Bartkowski Investment Group has proposed placement of illuminated, back-to-back billboards measuring 672 square feet in the 100, 500, 700 and 800 blocks of the highway. The signs would be mounted on free-standing monopoles at a height of 62 feet. The company also has filed an application with Morton Borough to install a billboard in the 400 block of the street.

The next meeting is scheduled for 7:30 p.m. June 25.

Source: Daily Times; 5/29/09



Chester residents slam council over trash fees

Confronted by a barrage of irate homeowners at Wednesday morning’s Chester City Council meeting, council members said they are considering an amnesty program to forgive interest on late trash-fee bills.

Councilwoman Willie Wells, who heads the city’s accounting and finance office, said council will vote next month on a resolution that would forgive the interest, but retain penalty fees, on trash delinquency bills recently mailed to thousands of city residents. Residents would need to contact the finance office and set up a payment plan to qualify for the amnesty. Homeowners who have already paid would qualify for a refund.

The bills, some of which include thousands of dollars in late fees dating to the 1990s, took many residents by surprise. Most never received any notice over the past decade saying they were delinquent with their trash payments. City officials say they haven’t made a concerted effort to collect the outstanding fees in the past because an outdated computer system kept them from generating delinquency bills. Any residents who believe they received a bill in error or for the wrong amount can file with the city’s Treasury Department, which will look at each bill on a case-by-case basis. Senior citizens on a fixed income below $15,000 can also apply to the city to have all their trash bill fees dismissed. They must contact the Treasury Department at 610-447-7801 and show proof of their income to qualify for the exemption. A community meeting scheduled by state Rep. Thaddeus Kirkland, D-159, of Chester, to discuss the bills and the possibility of a lawsuit will be held at 6 p.m. Friday at the Chester Fine Arts Center, 17 E. Seventh St., Chester.

Source: Daily Times; 5/27/09





MONTGOMERY COUNTY



Rates increase for Horsham Water and Sewer Authority customers

The 8,000 customers of Horsham Water and Sewer Authority will pay about $100 more for service. The average bill will increase from $545 to $656 annually. The authority sites several factors for the increase, the biggest being the rising costs associated with running the facility that is undergoing an expansion project. On average, bills have increased 51 percent over the last three years, as the Pennsylvania Department of Environmental Protection has tightened its regulations for drinking water and for treating water that is discharged into creeks. Those standards force authorities to spend money on upgrades – a cost that is passed along to the consumer. According to authority officials, 2008 was the first time in the last 20 years that the authority operated at a loss. For a breakdown of the Water and Sewer Authority’s rate structure, go to www.horshamwater-sewer.com

Source: The Intelligencer; 5/24/09



Final hospital plans approved

East Norriton’s Board of Supervisors unanimously approved the final site plan this week for the Albert Einstein Healthcare Network’s 180-bed hospital and trauma center at Wood’s Golf Center on Germantown Pike. Construction is expected to being in January 2010 for the 360,000-square-foot, five-story structure and the separate 75,000-square-foot medical office building. Now that the site plans are approved, Einstein will look to secure financing for the $300 million project.

Source: The Times Herald; 5/27/09



Erdenheim Farm will be permanent open space

Whitemarsh commissioners signed off on a $2 million county open space grant that will go toward the $12.5 million purchase of the 450-acre Erdenheim Farm, known locally as the Sheep tract. The farm, owned by the late Fitz Eugene Dixon, will link over 2,000 of open land in Montgomery County. It is one of the largest land conservation deals ever for the county.

Source: The Intelligencer; 5/29/09



Methacton approves 3.92 percent tax increase

The Methacton School Board approved the 2009-2010 budget of $86,889,440 which includes a 0.91 millage increase, or 3.92 percent. The board worked to trim the budget, and ended up reducing five teaching positions, decreasing retirement contributions, not upgrading technology, and reevaluating the transportation and facilities budgets. The board will utilize $475,000 from the fund balance and another $1.1 million from the capital reserve fund.

Source: Montgomery Life; 5/28/09



Upper Moreland School Board OK’s final budget

The Upper Moreland School Board trimmed about $1.2 million before passing a $52.3 million final budget for the 2009-2010 school year, which will include a tax hike from 23.99 mills to 25.32 mills. For a property assessed at the district average of $126,830, the tax hike will result in a $169 increase in property taxes. Upper Moreland residents who applied for homestead exemptions could pay $208 less in property taxes for the upcoming school term.

Source: The Intelligencer; 5/28/09



Spring-Ford to hike taxes for 2009-2010

The Spring-Ford Area School Board adopted a $120.1 million preliminary budget for the 2009-2010 school year that includes a projected 3.95 percent tax increase. For the average homeowner in the district with a $200,000 property, the tax bill will increase by about $176. The tax increase was lowered from 4.94 percent since budget negotiations began in February. The budget will be formally approved at the June 27 board meeting.

Source: The Times Herald; 5/26/09