In 2016 West Chester Borough introduced a Stream Protection fee; the funds would go to support the Borough’s state-mandated stormwater management requirements. The fee is levied against all landowners in the Borough with known impervious property. However, West Chester University said, hold on, wait a minute, this does not feel like a fee to me. Instead, they believed the collection of money was just a law in disguise and, as a tax-exempt entity, they need not pay. The Borough disagreed and sued.
Unfortunately, the court did not see it the Borough’s way. In a decision that could have widespread implications across the state, the seven-member Pennsylvania Commonwealth Court ruled the fees collected by the Borough were not done “by choice” or applied to a specific project directly benefiting the payee (a fee) but rather a general benefit the community (tax) and upheld the University’s ability not to pay those outstanding invoices.
SO, WHAT’S NEXT FOR THE BOROUGH?
According to several sources, the Borough has decided to appeal the decision to the Pennsylvania Supreme Court. This loss of revenue could cause a serious blow to the program and its required actions (remember undertaking these improvement projects is state-mandated).
“Grants will be a big part of filling that missing revenue going forward if the Supreme Court doesn’t see the case our way,” said Sustainability Director Will Williams at Tuesday night’s Borough Council Working Session. The Borough submitted for over $1 million in grant funding in 2023. It is also exploring other changes to the program including increasing commercial credit requirements.
The full extent of the revenue loss is not yet known. Getting an accurate count of tax-exempt properties in the borough is not as straightforward as it may seem. While a tenant of a property may be tax-exempt, that does not necessarily mean the property owner is. What we do know is the loss will be in the six figures with West Chester University’s contributions alone estimated at $132,000 a year.
“A lots of good questions and we are thinking about them already,” Will told Borough Council. In the meantime, fees are still being collected.
“Nothing has changed until the Pa. Supreme Court hears the case. Business as usual,” shared Borough Council Member Bernie Flynn in an email.
No word yet on when an appeal case could be heard.
Originally published, Feb. 17, 2023
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