MORGANTOWN — A Nov. 8 ruling from the West Virginia Supreme Court (WVSC) addressing the 2015 tax liability of WVU’s public/private partnerships has the Monongalia County Commission in the complicated position of determining how best to return an estimated $3 million, including interest, paid since 2015 by University Park at Evansdale and West Virginia Campus Housing.
In the public/private setup, the university owns land. That land is leased to a developer, who then pays for project construction before subleasing the improvements back to WVU for the purposes of running the student housing facilities.
In January 2015, County Assessor Mark Musick assessed the lease for University Park at Evansdale at more than $9 million. The developer objected, claiming it had no tax liability because WVU is not taxable as a state entity.
The assessment kicked off a nearly four-year legal scrum during which the case had multiple appearances before the Monongalia County Commission, sitting as the board of equalization and review, the Monongalia County Circuit Court and the WVSC.
In November, the unanimous WVSC ruling sided with the University Park, stating the proper valuation for the $90 million public/private enterprise is zero. The ruling also provided precedent for the subsequent tax years as well as legal challenges from West Virginia Campus Housing, resulting in the county opting against additional litigation.
However, because both University Park and the West Virginia Campus Housing properties were being assessed pending a legal outcome, property taxes were collected on each starting in 2015 and 2016, respectively.
Based on state code and advice from the county’s legal counsel, once the taxes were collected, they had to be distributed. The distributions included a number of taxing entities including the state, the county, the Monongalia County Board of Education (BOE), the BOE excess levy, the BOE bond levy, the City of Morgantown and, starting in 2016, excess levies tied to public transportation, volunteer fire departments, recreation and libraries.
The totals, according to calculations provided by the county, show University Park is owed $2,313,777.95, plus $168,803.87 in interest, while West Virginia Campus Housing is owed $490,327.88, plus $32,734.30 in interest. All told, an estimated $3,005,644.04 will be returned.
The largest refunds will come from the BOE and the BOE excess levy, both likely to be north of $800,000, while the City of Morgantown and the county will both have to come up with more than $500,000.
All parties are awaiting court orders that will address each of the tax years, provide final numbers and clarify some of the unknowns, like what impact, if any, University Park’s inclusion in a TIF district has on the calculations.
“There are a few unknowns in the numbers and it has to do with University Park at Evansdale being in the TIF district. So that’s kind of putting us on hold,” Chief Tax Deputy Kelly Palmer explained. “I need verification whether that ticket actually paid into the TIF, because if it did, it’s a different distribution rate on the increment. So we’re still waiting on confirmation.”
Palmer was part of a recent county commission work session that also included BOE members Ron Lytle, Mike Kelly and Sara Anderson as well as Superintendent Eddie Campbell and BOE Treasurer Nicole Kemper. Sheriff Perry Palmer and Patrick Tenney of the county assessor’s office were also present.
Morgantown officials were invited to the session but did not attend.
While there are still details to be worked out, indications are that the entities with the largest sums at stake have the money on hand and are simply waiting on the final numbers.
“On behalf of the school system, our only real question at this point is what is going to be the amount due to be paid back to the commission? The previous superintendent and the board of education had the foresight entering into this situation to set that money aside. So the money is sitting there. It hasn’t been used in any capacity,” Campbell said.
Likewise, Commissioner Ed Hawkins said, the county also isolated funds that were dependent on a successful court ruling, noting “anticipating this as a possibility, we just parked it over here.”
Commission President Tom Bloom said he was told by Morgantown Mayor Bill Kawecki that the city is awaiting a number and plans to pull the funds from the city’s rainy day account.
A question that remains, however, is who will be left holding the bill for the interest.
When asked by Lytle, Bloom responded, “That’s a good question.”
The answer to which, Lytle suggested, shouldn’t be the county’s students.
“The state forced us into this position with you guys having to distribute those taxes — somebody forced us into this situation, and I don’t think the kids of Monongalia County should be the ones paying for that,” Lytle said.
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