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Home My WebLink About94-06586 . ~ j -J' ~ ~ '::! l~ I .11 oi! j c!) ~ J 1...5 :00 \.() ...9 Beverly Health and Rehabilitation Services, Inc. THE NATION'S LEADER IN QUALITY HEALTH CARE July 31,1996 Mr. Joseph Patrick O'Brien, L.L.P, Kassab Archbold & O'Brien 214 North Jackson Street Medl8, PA 19063 Dear Mr. O'Brien: In response to your request, I will explain the me8nlng of gross revenue, contractual revenue adjustments and net revenue, Revenue for all routine and ancillaries Is recorded at gross at the charge rate established via a contract with the payor. Line 12 of the MA-11 Schedule D ($2.627,829) represents the gross charge for ancillaries for Blue Ridge West. Beveriy doesn't expect to be paid the8e gross contract (charge) rates, 80 a contractual revenue adjustment Is recorded as a deduction to revenue. This contractual adjustment as a deduction from revenue will adjust the revenue accounts recorded at gross down to the amount Beverly estimates they will receive, Line 25 of the MA-11 Schedule D ($2,250,062) represents the contractual adjustment amount for ancillaries for Blue Ridge West. Certain revenue (le..Medlcare Part A, Medicare Part B, and certain managed care contracts) are reimbursed to Beveriy based on cost-based reimbursement. An ancillary charge recorded at gross will be contracted out to Zero (0) In MC 897- Ancillary Reserve on the 1994 Profit and Loss statement. Cost based reimbursement for ancillaries Is based on the ratio of total costs/tot81 charges, This ratio times the gross charge results In Beveriy's net revenue that Is to be reimbursed for an ancillary service, The accounting Is recorded as follows: Credit Physical Therapy revenue for $2.00, Debit Ancillary Reserve for $2.00, and Credit MC 818 Ancillary Cost $1,00 (amount to be paid by Medicare). Net ancillary revenue recorded is $1,00, i! : A BEVERLV ENTt:RPRISES SUBSIDIARV 5111 Rogers Avenue. Fort Smith, AR 72919 (800) 666-9996 . (501) 452-6712 ! J /! II' , 'i r I '," I,', '! , I, , , page 2 July 31, 1996 I I I Beverly's reimbursement from Medicare for Part A ancillaries as explained above, is recorded in AlC 818- Ancillary Cost-Medicare Part A. Per the 1994 net income statement this number is $1,221,690, This Is mapped to the MA-11 Schedule D in line 1 Nursing Care, For patients that pay privately, there is no contractual adjustment as Beverly expects to be paid the gross charge for these services, For patients with all-inclusive managed care rates, designed to include room and board and ancillaries, the ancillaries are recorded at the established gross all-inclusive rate This sum is included in Beverly's Room and Board accounts which maps to the MA-11 Schedule D in Line 1 Nursing Care (Ie..,the $10,796,931 on Line 1 includes the $1,221,690 ancillary revenue), The ancillary service charges are recorded in their respective ancillary discipline line on the MA-11 Schedule D, but so as to only record the net revenue, these ancillaries are subtracted out in Line 25 on Schedule D so Beverly does not overstate revenue, but at the same time record the ancillary charge at gross so gross charges can be captured for cost based reimbursement purposes, I hope this has been of some help. If you have any further questions I can be reached at (804) 340-7127, Sincerely, \ ({\ I) I-I I. I . >0~ /, '1\ 0 I~c,(f ~Ot~ Pamela H, Orsini, CPA Director - Medicaid Appeals 5111 Rogers Avenue. Fort Smith, AR 72919 (800) 666-9996' (501) 452-6712 ( ". " N ~ ... ! .. 1. '" a I ! .. i ~ .. : i lC ~ I .. ~ I : ~ o .. .. Z .. .. '" Z :5 a ~ ~ ~ .. a ~ ~ i a III .. ~ 5 ~ ~ i U. :t( a m ~ ~5 ,~ u .... ..... a .. .. a II ~! ....N~III.a..~..Mllla...~~..M..llaa..N..IIIN..a~Il~...a~..1l ~ N~.MNM~~O"OO~oooaooo.OO~O~ONOOOOOO"OO ~ M. . . . . . . . . . . . . . . . . . . . . .... . . . . . . . . . . . . ON d .. II ui .. -: ~ .~.~""lIIa~a""."""MN."Ma~"N..aa..ag~~~M.aa 3 .~G~O"O..~~N"NO.~~NOO~GM~"ON~O .G.~~ON N~o~uiNO~OG~O~~~MN~M~ON~8~~~~~iO~OM~G~i ~~~~i~tS::.~~~~!~~S~~~NN~~~~~ ~~~:G~.. ~O~;~~~~~;N;.~~N~mN; ~~~~;a N~~; ~ O,.......Jot\NM.Nt"'t ... ...... N ..... M N O~~~~.~~OOO~~.~OO~"~,...OONOGO~.OO,...O,...~OO. ,... O~.N~NNNOOOOO"oooooO.OO.O"ONOOOOOOOOOG ,... 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'" ~ ~ Z ~ - a << '" I~ s I ~ ~ Ii ~I , .... ~ :5 I e la I g , 0 - a ~ M ~ ~ ~ la Cl;< '" · ~luI ~ 2 ; ~ iEg ei ~~ ,~ ~ .... a . .... i i 5.j;:"i!fi;~1 I t~lg~~hl~11 ~ '" e 2 ~ ... .. ...~ "!:!a~~""i .... .... .... ....' .... a ",' ~ ~ ~nl~ h~ ~ ~ ~ ~ .. a~ u ~ ~ ~ ~ ~ ~ fj::Jt:3t~:t~~~~t ~~~c::a~m~~t~ .~ l: 000000000000 ...........0....0 ...........0..0......0... ,..,....,...,...""",....,...,..,.......,.. l:I 000000000000 00000000000 $ .000000000000 00000000000 I I' - Blue Ridge Haven West Convelescent Center Cost Report I Fiscal Yaar 1994 Attachmant A Reconciliation of Total Revenue, MA-11 to General Ledger General MA:11 Ledger '.'arIaoce Total revenue per Income statement 11,249,657 Line 28, NET REVENUE 11,095,535 xxxxxxxxxx Remove bad debt 154,208 xxxxxxxxxx expense recorded In line 24 Add Interest Income xxxxxxxxxx 84 recorded In line 18 Rounding (2) xxxxxxxxxx Total revenue 11,249,741 11,249,741 0 Blue Ridge Heven West Convalescent Center Cost Report I Fiscal Year 1994 Attavhment B Classlflcetlon of G/L Account Numbers Account Balance Routine Revenue Medicare 600 1,127,461 Medicare 601 209,251 Private 602 473,066 Medicaid Skilled 603 2,266,104 Medicaid ICF 605 4,546,296 Medicaid ICF II 607 60,076 Veterans 809 184,203 Total Routine Revenue 0,886,499 Ancillary Medical Supplies 620 360,103 Nursing Supplies 821 6.481 Inhalation Therapy 823 140,135 Oxygen Revenue 624 62,693 Cllnltron 625 99,058 Complex Medical Equip. 828 42,351 Speech Therapy 831 306,730 Physical Therapy 838 245 Physical Therapy 839 687,010 Occupational Therapy 847 616,176 Pharmacy 855 360,500 Lab 670 14.284 Audiology 879 765 Patient Personal 881 8,405 Barber & Beauty 882 29,866 Laundry 883 36 Radiology 885 48,494 Other Patient Services 889 5,263 Total Ancillary Revenue 2,788,595 Contractual Adjustments Medicare Ancillary Part A 818 1,221,690 Part A Ancillary Cost Adj 668 46,233 Part B Cost Report Est 869 (120,196) Ancillary Reserve 897 (2,250,062) Medicaid Routine 896 644,949 Total Contractual Adjustments (457,386) Other Revenue Meal Sales Revenue 900 10,661 Vending Machine 902 8,119 Gain I Loss on Assets Sold 908 12,610 Other Prior Year Revenue 925 (4,440) Flu I Pneumonia Vaccine 941 3,000 Total Other Revenue 29,950 Total Revenue per Income Statement 11,249,658 - ~ , I , Blue Ridge Haven West Convalescent Center Cost Report I Fiscal Year 1994 Attachmant C Mapping of G/L to MA-11 Account Balanca Routlna Revenue per GIL 8,888,499 Add Medicaid Routine Contractual 898 644,949 Add Medicare Part A Contractual 818 1,221,690 Add Part A Ancillary Cost Ad] 868 46,233 Add Prior Year Adjustment 925 ___J4,440) Total Routine Revenue per MA-11 line 3 10,796,931 Ancillary Revenue per GIL 2,788,595 Remove Barber & Beauty 882 (29,866) Remove Patient Personal 881 (8,405) Remove Other Patient Services 8!l9 (5,263) Remove Laundry 883 (36) Add Flu Vaccine 941 3,000 Add Part B Cost Report Est 869 (120,196) Total Ancillary Revenue per MA-11 line 12 2,627,829 Other Income per G/L 29,950 Add Barber & Beauty 882 29,866 Add Patient Personal 881 8.405 Add Other Patient Services 889 5,263 Add Laundry 883 36 Add Interest Income (G/L 7645) 7645 84 Remove Flu Vaccine 941 (3,000) Remove Other Prior Year Revenu 925 4.440 Total Other Revenue per MA-11 line 22 75,044 Total Gross Revenue per MA-11 line 23 13.499,804 Deductions from Revenue Offset bad debt expense 1066 154,208 Offset set ancillary reserve 898 2,250,062 Total Deduction from Revenue line 27 2.404,270 NElt Revenue per MA-11 line 28 J 1,095,534 REVENUES AND ADJUSTMENTS TO REVENUES SCHEDULE 0 fACILITY NAME: Blue Rldae Haven West MA NO. 1112997 REPORT PERIOD fROM: 01/Ot/94 TO: 12/31/94 A B C GENERAL ADJUSTMENT SCHEDULE C REVENl.:S lEDGER SCHEDUl E C LINE NUMBER I, DIRECT HEALTH CARE t. Nursing Care 10,796,931 $ (15900) 7 2, Practitione'" 0 0 3, Sublola!: Direct Heal1h Care 10,796,931 /1/111111I11111/11/1/1 1/11I1/111I1/1/1111I/1 II, ANCilLARY SERVICES 4, Pharmacy - Proscription drugs 360,500 (294.115) 16 5, Medical SuppUos 408.935 0 21 6. Laboralory & X.rays 62,718 0 22 7. Ovor -1I1e - counler drug. 0 0 19 8. Therapy 1,490.730 0 23 9. Oxygen 202,828 0 10, 3,000 0 1" 99,056 0 12, Sublotal: Ancillary sOMces 2,627,629 J, 11I11I11I11111I111I11I 1111I11I11I1111I11I11I ill. OTHER INCOME 13. Guest and employee meals 10,661 (10,661) 1 14. Discounts 0 0 37 15. Vending machine 6,119 0 37 18. TelephonefTelevi.ion 0 0 37 17. Beauty, barber, gill shop, etc. 38,271 0 35 18. Unroslricled Inlerestl1nvestment Income 84 (84) 41 19. 01l1er M!scenaneous: (If greate. than $500 provide oeparale schedutelndicating source and amounts) 17,910 (36) 2 20. 0 0 21. Vending Machine 0 6 \19 26 22. Subtotal: 01l1er Income 15.045 11I111I111I1111I11I 11I11111/1/1/11I11I11/ 23, TOTAL: GROSS REVENUES (Add Line. 3. 12,22) 13,499,605 1111I11I111I1/1111/111 1/11I1/111I/1111/1111/ IV, DEDUCTIONS FROM REVENUES 24. U..l:onectible Accounts 154,206 25. Contract Adjuslments 2,250,062 I 26, 0 27. Subtotal: Deductions 2,404,270 11111/11/11/111/1111I1 1111111/111I11/111I11/ 26, NET REVENUE (Line 23 minus Line 27) \I ,095,535 29, LESS: Expenses (Schedule C) 11,535,076 /111I/111I1/1/1111I111 11/1/11111/11/11111/1/ 30, NET INCOME (Loss)' (439,543) ,/111111I11I1111111111I 11/11111/1/111/111/11/ 31. a, TOTAL SCHEDULE D ADJUSTMENTS S (328,915) b, TOTAL SCHEDULE E ADJUSTMENTS $ (165,943) 32. TOTAL ADJUSTMENTS S (494,656) 'Must agree wi1l1 net Income or loss .hown In financial 51alaments, If different allach an e'planation Including any discussion of Medicare Part B e,eluslons, 1M II . 3192 .11- IJ r r...- J l ~' " -. 5 " 0 i' ; " z. ~ ~ . .\ - ~ ~ ,. 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V 'Xl REVENUES AND ADJUSTMENTS TO REVENUES SCltEOULE 0 fACILITY NAME: Blue Ridge Haven Welt MA NO. 1112997 REPORT PERIOD FROM: 01101/94 TO: 12/31/94 A B C GENERAL ADJUSTMENT SCHEDULE C REVENUES L.E;!Xilffi SCtlEOUJ.EJ< utiEllUMfllffi I, DIRECT HEALTH CARE 1, Nursing Care 10,796,931 5 ----Ll5 90~} 7 2, Praclrt1one.. 0 3, Sublotal, Direct Health Care 10.796,931 1111I111/11111111111I1 11I11111111I1/111/1111 II, ANCILLARY SERVICES 4, Pharmacy. Prescr1ption drugs 360,500 (294,115) 18 5, Medical Supplies 408,935 0 21 6, Laboralory & X-rays 62.778 0 22 7, Over. the . counler drug. 0 0 19 8, TI1erapy 1.490, 730 0 23 9, Oxvgen 202,828 0 10, 3,000 0 11, 99,058 0 12, Sublolal: Ancillary service. 2,627,629 111I11/11/1/1/111I11I1 /1/1/1/1/1/11/1/111I/1 III. OTHER INCOME 13, Guest and employee meal. 10,661 lI0,661} 1 14, Discounts 0 0 37 15, Vending machine 6,119 0 37 16, TelephonefTelevislon 0 0 31 17, Beau\y, barber, 9ift shop, etc, 38,271 0 35 18, Unrestricted Interestllnvestment Income 64 (841 41 19, Other Miscellaneous: (If greater than 5500 provide eeparate schedule Indicating source and amounls) 17,910 2 20, 0 21, Vending Machine 0 28 22, Subtotal: Other Income 75 045 11I/11/1/11/11/111//11 23, TOTAL: GROSS REVENUES (Add Lines 3, 12. 22) 13,499805 /1/11//111I11I11I/111I /111I11I1/11/11111//11 IV. DEDUCTIONS FROM REVENUES 24, U..collectible Accounts 154,208 25, Contract Adjustments 2,250,062 26, 0 27, Subtotal: Daductions 2,404,270 1/1/111I1/111I/1/1/1/1 /111111/1111I/1111//11 28, NET REVENUE (Line 23 minus Line 27) 11 ,095,535 29, LESS: Expenses (Schedule C) 11 ,535076 11I11I11I/1111111I1111 11I11/1/1/111I/1111/11 30, NET INCOME (Loss)' ;439,543) 11I1/1111111I/111I/1/1 11I/1/11/1/1/11/1/11/1 31, a, TOTAL SCHEDULE 0 ADJUSTMENTS 5 (328,915) b, TOTAL SCHEDULE E ADJUSTMENTS $ (165,943) 32, TOTAL ADJUSTMENTS 5 (494,658) 'Must agree with net Incoma or loss shown In financial statements, II different attach an explanation Including any discussion 01 Medicare Part B exclusion., .11 . M^1t.3Ill2 BARRETT REAL ESTATE IDQ~ TEL:7!7 243 8627 . P,OOI 8n - Medicaid IDc~e reF: 182 Beds x $ BB.51 .. $ 16,109 SNFI -.ll Beds x $ 105.55 .. S 7,916 257 Beds $ 24,025 x 365 Days $8,769,125 lit - Kedioa~ Inoome SNP': 25 Beds x $233 .. $ 5,B25 x 365 Days $2,126,125 10' - Priv*t:1l IaoOlll8 IeF: 17 Beds x $100 SNP': 11 Beds x $150 SNF: 1 Bed x $320* reF: -1. Beds x $150* 31 Income S'I...az:y $ B,769,125 $ 2,126,125 S 1.449,050 $12,34.,300 *l'rivate Rooms . $ 1,700 . $ 1,650 - $ 320 .. S 300 $ 3,970 x 365 Days $1,449,050 B.d SUlIIIIIllry 82\ .. 257 Beds 8\ = 25 Beds 10% - ....ll Beds 313 ~ - Beverly Health and RehabIlItation Services, Inc. THF NATION'S LEADER IN QUAI.ITY HFALIH CARE July 31,1996 Mr. Joseph Patrick O'Brien, L.L.P. Kassab Archbold & O'Brien 214 North Jackson Street Media, PA 19063 Dear Mr. O'Brien: In response to your request, I will explain the meaning of gross revenue, contractual revenue adjustments and net revenue. Revenue for all routine and ancillaries Is recorded at gross at the charge rate established via a contract with the payor. line 12 of the MA-11 Schedule D ($2,627,829) represents the gross charge for ancillaries for Blue Ridge West. Beverly doesn't expect to be paid these gross contract (Charge) rates, so a contractusl revenue adjustment is recorded as a deduction to revenue. This contractual adjustment as a deduction from revenue will adjust the revenue accounts recorded at gross down to the amount Beverly estimates they will receive. line 25 of the MA-11 Schedule D ($2,250,062) represents the contractual adjustment amount for ancillaries for Blue Ridge West. Certain revenue (le..Medlcare Part A, Medicare Part B, and certain managed care contracts) are reimbursed to Beverly based on cost-based reimbursement. An ancillary charge recorded at gross will be contracted out to Zero (0) in AlC 897- Ancillary ReselVe on the 1994 Profit and Loss statement. Cost based reimbursement for ancillaries is based on the ratio of total costs/total charges. This ratio times the gross charge results in Beverly's net revenue that Is to be reimbursed for an ancillary selVice. The accounting Is recorded as follows: Credit Physical Therapy revenue for $2.00, Debit Ancillary ReselVe for $2.00, and Credit AlC 818 Ancillary Cost $1.00 (amount to be paid by Medicare). Net ancillary revenue recorded Is $1.00. ~ f i ! . ,j 'I; ~ oj I ," ,i! I, I . if ;j' ,I ii :') ; / ./ 1\ " . A BEVERLY ENIERPRISES SUBSIDIARY 5111 Rogers Avenue. Fort Smith. AR 72919 (800) 666-9996 . (501) 452-6712 .. 'r- ~ ... ! .. i ~ ; .. I ~ .. .. : i II: ~ ~ : ~ ... li! '" ~ II: III o U Z 'H .. '" z :5 o ~ ~ ~ .. a ~ ~ i a III ~ ~ ~ H a ~ ai t:! ... o.a ~~ ~ ai t:! .l( o.c i! ~8~Sg~gi~~gg~~~~~~g~~ga~~~~~gBg~~ g ~ .8~ .~ .i=~ 'M 'r1 .~ ot.i '~~M 0.-4 . . . . . . 'i": ~ ....-4... ,,4'" rot ~ ~ .. . . '~ . .. 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"!. 11\ N ~ N . ~ o N .. . .. 51 - a ~ I .. ~ .. ~ ... .. ~ I I' - - Blue Ridge Haven West Convalescenl Center Cost Report I FIscal Year 1994 Attachment B Classification of G/L Account Numbers Account Balance Roullne Revenue Medicare 800 1,127,481 Medicare 801 209,251 Private 802 473,086 Medicaid Skill ad 803 2,288,104 Medicaid ICF 805 4,546,296 Madlcald ICF II 807 60.D78 Veterans 809 184,203 Total Roullne Revenue 8;668,49!f Ancillary Medical Supplies 820 360,103 Nursing Supplies 821 6.481 Inhalation Therapy 823 140,135 Oxygen Revenue 824 62,693 Cllnltron 825 99,058 Complex Medical Equip. 828 42,351 Speech Therapy 831 306,730 Physical Therapy 838 245 Physical Therapy 839 687,010 Occupational Therapy 847 616,176 Pharmacy 855 360,500 Lab 870 14,284 Audiology 879 765 Patient Personal 881 8.405 Barber & Beauty 882 29,866 Laundry 883 36 Radiology 885 48.494 Other Patient Services 889 5,263 Total AncIllary Revenue 2,788,595 Contractual Adjustments Madlcare Ancillary Part A 818 1,221,690 Part A Ancillary Cost Adj 868 46,233 Part B Cost Report Est 869 (120,196) Ancillary Reserve 897 (2,250,062) Medicaid Roullne 898 644,949 Total Contractual Adjustmants -(457;3-66) Other Revenue Meal Sales Revenue 900 10,661 Vending Machine 902 8,119 Gain I Loss on Assets Sold 908 12,610 Other Prior Year Revenue 925 (4.440) Flu I Pneumonia Vaccine 941 ,.. ,3,000 Total Other Revenue 29,950 Total Revenue per Incoma Statement 11,249,658 Blue Ridge Hovan West Convelescent Center Cost Report I Flscel Year 1994 Attachment C Mapping of G/L to MA-11 Account Balance Routine Revenue per G/L 8,888,499 Add Medlceld Routine Contractual 898 644,949 Add Medicare Part A Contractual 818 1,221,690 Add Part A Ancillary Cost AdJ 868 46,233 Add Prior Year Adjustment 925 , _____(~1.4_9) Total Routine Revenue per MA-11 line 3 10,796,931 Ancillary Revenue per G/L 2,766,595 Remove Barber & Beauty 682 (29,666) Remove Patient Personal 661 (6,405) Remove Other Patient Services 669 (5,263) Remove Laundry 663 (36) Add Flu Vaccine 941 3,000 Add Part B Cost Report Est 669 __J'L~O,196) Total Ancillary Ravenue per MA-11 line 12 2,627,829 Other Income per G/L 29,950 Add Barber & Beauty 662 29,666 Add Patient Personal 661 6,405 Add Other Patlant Services 669 5,263 Add Laundry 663 36 Add Interest Income (G/L 7645) 7645 B4 Remove Flu Vaccine 941 (3,000) Remove Other Prior Year Revenu 925 4,440 Total Other Revenue per MA-11 line 22 _-15,044 Total Gross Revenue per MA-11 line 23 13,499,604 Deductions from Revenue Offset bad debt expense 1066 154,206 Offset set ancillary reserve 696 2,250,062 Total Deducllon from Revenue line 27 _~c'~04,27~_ Net Revenue per MA-11 line 26 11095534 ~--:;:..I_.--L=:",-:.::; REVENUES AND ADJUSTMENTS TO REVENUES SCHEDULE D FACIUTY NAME: Blue Ridge Heven Wesl MA NO. 1112997 REPORT PERIOD FROM: 01101f9~ TO: 12/31/9~ A B C GENERAL ADJUSTMENT SCHEDULE C REVENUES LEDGER SCHEDULE C LINE NUMBER I, DIRECT HEALTH CARE 1, Nursing Care 10,798931 $ (15900) 7 2, Praclltione.. 0 0 3, Subtotal: Direct Heal1h Care 10,796,931 /111/11/111111/1111111 1111111/1111/1111/1111 II, ANCILLARY SERVICES 4, Pharm3CY' Prescrlptlon drug. 360,500 (294,115) 18 5, Medical Supplies 408 935 0 21 0, Laboratory & X.rays 62.778 0 22 7, Over -the - counter drugs 0 0 19 8, Therspy 1,49Q.730 0 23 9, OlC'(gen 202,828 0 10, 3,000 0 11, 99,058 0 12, Subtotal: Ancillary services 2,827,829 ". 1/11/111/11/11/1111111 111111111/11/11/111/11 III, OTHER INCOME 13. Guest and employee meals 10,681 (10,861) 1 14, Discounts 0 0 37 15. Vending machine 8119 0 37 16. Telephonerrelevl.lon 0 0 37 17. Beeuty. barber, gift shop, etc, 38,271 0 35 18. Unrestr1cted Interest/lnvestmenllncome 84 (84) 41 19. Other Miscellaneous: (If great., than $500 -- provide separate schedule indicating source and amounts) 17,910 (36) 2 20, 0 0 21, Vanding Machlna 0 16,119) 28 22, Subtotal: Other Income 75.045 111/111/11/11111111111 111/11111111/111111/11 23, TOTAL: GROSS REVENU"S (Add Lines 3. 12. 22) 13,499,805 111/11/1111/11111111/1 1/11/111/11/1111/11/11 IV, DEDUCTIONS FROM REVENUES 24, U..collecUble Accounts 154,206 25. Contract Adjustments 2,250,062 J 26, 0 27. Subtotal: Deductions 2,404,270 1/1111/11/1111/11/11/1 1/111111/111/11/11/111 26. NET REVENUE (Line 23 minus Line 27) I I ,095,535 29, LESS: Expenses (Schadule C) 11,535,078 111/1111111/11/1/11/11 1/11/111111111111/11/1 30, NET INCOME (Loss)' 1439,543) ,1/111111/11/11/11/11/1 1/11/1111/11/111111/11 31. a, TOTAL SCHEDULE 0 ADJUSTMENTS $ (328,915) b, TOTAL SCHEDULE E ADJUSTMENTS S (165,9431 32, TOTAL ADJUSTMENTS $ (494,858) -Must agree with net income or loss shown In financial statements. If different attach an explanation Including any discussion of Medicare Part B exclusions. (2-) .11. MAlt.3192 KASSAB ARCHBOLD & O'BRIEN, L,L,P, By: JOSEPH PATRICK O'BRIEN, ESQUIRE Attorney I.D. No, 08648 214 North Jackson Street Media, Pennsylvania 19063 (610) 565-3800 Attorney for Petitioner RE: APPEAL OF BLUE RIDGE HAVEN WEST CONVALESCENT CENTER, INC. From the Decision of the Cumberland County Board of Assessment and Revision of Taxes in Connection With Premises Situated at 770 Poplar Church Road, East Pennsboro Township, Cumberland County, Pennsylvania, Relating to 1995 and 1996 Real Estate Assessments and All Subsequent Assessments During Pendency of the Appeal PHILADELPHIA COUNTY COURT OF COMMON PLEAS NOS. 94-6586 94-6587 MEMORANDUM OF BLUE RIDGE HAVEN WEST CONVALESCENT CENTER, INC, PETITIONER'S SUMMARY OF THE FACTS Property Description: The Blue Ridge Haven Convalescent Center, Inc. is located at 770 Poplar Church Road, East Pennsboro Township, Cumberland County, Pennsylvania. The subject is an existing 313-bed, skilled nursing facility situated on two contiguous parcels totaling 6.2 acres. (Parcel Nos. 09-19-1592-021 and 09-19-1592-022A) Tax Appeal Years: 1995 and 1996 County Assessment: 1995 Folio #09-19-1592-021 - $299,340.00 Folio #09-19-1592-022A - $224,790.00 TOTAL COUNTY ASSESSMENT - $524,130.00 SUMMARY OF THE LAW Real estate tax assessment law in Pelillsylvania is divided into General County Assessment law and specific class county assessment law. Both types of assessment law are applicable in all cases as long as the provisions of eaeh do not conflict. When conflicts between the general law and specific class county codes arise, the specific class county code controls. McKinnev v. Board of Commissioners of Alleghenv Countv, 35 Pa. Cmwlth. 91 385 A.2d 596 (1978); Truck Terminal Motels of America v. Berks Countv Board of Assessment Appeals. 127 Pa. Cmwlth. 408, 561 A.2d 1305 (1989). The County Board of Assessment (the Board) generally sets L'le assessment of each property in a given county. The assessed value should be equal to an established predetermined ratio, or the Common Level Ratio (CLR), multiplied by the fair market value of the property. If a person wishes to appeal the assessment of a parcel of real estate, a written appeal must be filed on or before September 1st preceding the tax year appealed, with the exception of Philadelphia County (the first Monday of October) and Allegheny County (the last day of February). In order to appeal an assessment before the County Board, a party must have the requisite legal standing to do so. According to the applicable part of 72 P.S. Sec. 5349(c), "[a]ny person aggrieved by any assessment, whether or not the value thereof shall be changed since the preceding annual assessment, or any taxing district having an interest therein, may appeal to the board for relief. . . ." A person who has a "direct immediate, pecuniary and substantial interest in the subjr~t mailer is a party aggrieved." Louden Hill Farm. Inc. v. Milk Control Commission, 420 Pa. 548, ~17 A.2d 735 (1966). Using the standard in Louden, the Pennsylvania Commonwealth Court held that a lessee which was liable to pay real estate taxes under a twenty-five year lease had the appropriate legal standing to appeal the assessment at the board level. In re: ADpeal of Mamie Newtown School District, 70 Pa. Cmwlth. 368, 453 A.2d 68 (1982). Therefore, a lessee which is required to pay the real estate taxes may have standing to appeal before the Board. According to 72 P.S. Sec. 5020-518.1(a), "[alny owner ofreal estate or taxable property in this Commonwealth who may feel aggrieved by the last or any future assessment evaluation of his real estate or taxable property may appeal . . . from the decision of the Board of Assessment appeals to the court . . . ." Standing to appeal to a trial court only vests in the owner of the real estate rather than any "party aggrieved." A lessee obligated to pay real estate taxes by virtue of a lease does not have standing to appeal. Marcus Hook Development Park. Inc. v. Board of Assessment Aplleals of Delaware County, 68 Pa. Cmwlth. 229, 449 A.2d 70 (1982). Although a mere lease does not provide standing, equitable ownership of the property is sufficient. A lessee who owns improvements on a ground lease may be considered the equitable owner for assessment appeal purposes. Filbern Manor ADartments v. Board of Assessment Appeals of West Newton Boroul!h, 138 Pa. C.nwlth. 660, 589 A.2d 279 (1991). A party with a 99 year lease may also be considered the equitable owner. Filbern Hupra. Finally, an individual who owns the improvements and has an agreement to convey the real estate, but the deed has not yet been transferred, also has standing provided that all antecedent conditions have been met. Anoeal of Baltimore & Ohio Railroad from Tall: Assessment, 405 Pa. 349, 175 A.2d 841 (1961). If dissatisfied by the decision of the Board, the owner of the property has 1111 ahsolute right to a de novo trial before the Court of Common Pleas. This trllll is 1I0t a review of the record of the Board proceedings. It is a complete reevaluation of the rclevIIIll factual Issues IIl1d the property's assessment. 72 P.S. Sec. 5350 provides: "(A) In any appeal of an assessment the court shall make the following detenninations: (1) The market value as of the date such appeal was tiled before the Board of Assessment Appeals. In the event subsequent years have been made a part of the appeal, the court shall detennine the respective market value for each such year. (2) The Common Level Ratio which was applicable in the original appeal to the Board. . . (A.I) The court after delennining the current market value of the property for the tax year in question, shall then apply the established predetennined ratio to such value unless the Common Level Ratio varirs by more than 15% from the established predelennined ratio, in which case the court shall apply the Common Level Ratio to the current market value of the property for the tax year in question. " Once the Board of Assessment establishes the prima facie validity of its asse&sment by placing its assessment record into evidence before the Court of Common Pleas, the burden of proof then shifts to the taxpayer to produce sufficient, competent, credible, and relevant evidence to overcome the assessment's prima facie validity." See Deitch Comvanv v. Board of Prooertv Assessment, 417 Pa. 213, 209 A.2d, 397 (1965). The procedure requires that the taxing authority first present its assessment record into evidence. Such presentation makes out a prima facie case for the validity of the assessment in the sense that it fIXes the time when the burden of coming forward with evidence shifts to the taxpayer. Once the taxpayer produces sufficient proof to overcome its initially allotted status, the prima facie significance of the Board's assessment figure has served is procedural purpose, and its value as an evidentiary device is ended. Deitch Companv supra. The function of the trial judge in a tax assessment case is not to independently value the property itself, but to weigh the conflicting testimony and values expressed by the competing parties and arrive at a valuation based on the credibility of their opinions. Maller of Harrisburg Apartment. Inc., 88 Pa. Cmwlth. Cl. 410, 489 A.2d 996 (1985). The trial judge is not an expert in valuing property, and he is not free to substitute his opinion for that of the experts based on independent evidence submitted by the parties. Appeal of Avco Com., 100 Pa. Cmwlth Ct. 616, 515 A.2d 335 (1986). The fact finder may believe all or none of the taxpayer's and taxing district's testimony. The fact finder is not bound to accept the petitioner's or expert's testimony merely because it is the testimony of someone having special skill or knowledge. All the components that the witnesses considered are matters which the fact finder considers in detennining the persuasive quality of the testimony. The fact finder weighs the testimony or opinion of experts against one another in order to detennine credibility and weight. Anneal of Avco Com., 100 Pa. Cmwlth. Ct. 615, 515 A.2d 335 (1986). The credibility and weight of evidence does not depend on the quantity of witnesses. Westinghouse Elec. v. Bd. of Assessment. 652 A.2d 1306, 1312 (Pa. 1995). When a trial court is presented with conflicting testimony by equally credible experts, it is within the court's discretion to assign the value of the propeny somewhere in between the values presented by the parties. WestiOlzhouse Elec. v. Bd. of Assessment, 652 A.2d 1306, 1312 (Pa. 1995). When both the taxpayer and the Board have presented evidence of current fair market value, the trial court detennines the credibility and evidentiary weight of the testimony. Appeal of Chartiers Vallev School District, 67 Pa. Cmwlth. Ct. 121, 447 A.2d 317 (1982), appeal dismissed, 500 Pa. 341,451 A.2d 986 (1983). As stated in the case of Deitch Companv v. Board of Pronertv Assessment, 417 Pa. 213, 209 A.2d 397 (1965), a trial court must apply the following standard in a de novo review of an assessment: "[T]he court. . . must first decide on the basis of the competent, credible, and relevant evidence produced by all parties, what the fair market value of the propeny involved is . . . Secondly, the court must detennine the appropriate ratio of assessed value to market value which exists in [that] county. The court must then apply the ratio found to the market value of the property in order to arrive at the proper assessment. " A trial court must determine the fair market value of the subject property and the proper ratio of assessed value to market value. These findings of fact must be articulated on the record of every real estate tax assessment appeal before the Court of Common Pleas. The Matter of Harrisbur!! Park Anartments. Inc., 88 Pa. Cmwlth. 410, 489 A.2d 996 (\985). Market value is defined as the price which a purchaser, willing but not obllgated to buy, would pay an owner, willing but not obligated to sell, taking into consideration all uses to which the property Is adapted and might In reason be applied. Buhl Foundation v. Board of Pronertv ". . . In arriving at the actual value, all three methods, namely, cost (reproduction or replacement as applicable less depreciation in all forms ad obsolescence), comparable sales and income approaches, must be considered in conjunction with one another . . ." Assessment, 407 Pa. 567, 180 A.2d 900 (\962). 72 P.S. Sec 5020-402(a) provides, inter alia. The actual sale price of the subject property in the current taxable year is not considered controlling when determining market value. Instead, each of the above approaches to value must be used. The actual sale price is merely another factor to be considered. Furthermore, the depreciated value of improvements on real property which appear in a federal income tax return are not admissible as credible evidence cf the property's fair market value. In Re: ~ ShopDln!! Plaza, 83 Pa. Cmwlth. 122, 476 A.2d 1001 (1984). Federal income tax laws permit the use of a variety of depreciation methods, none of which are certain to provide the present market value. Appraisal reports used to determine market value cannot be stricken as inadmissible hearsay if they may contain facts and figures derived from sources not admitted into evidence. An expert appraiser may use facts and figures derived by others and rely upon them in a report as a basis of an expert opinion of value. B.P. Oil Comnanv. Inc. v. Delaware County Board of Assessment Apneals, 114 Pa. Cmwlth, 549, 539 A.2d 473 (1988). Furthermore, an expert appraiser's failure to use each of the three mandatory approaches to market value does not render the testimony inadmissible. In Re: Anneal of DUQuesne Club, 92 Pa. Cmwlth. 15, 498 A.2d 459 (1985). According to the Pennsylvania Commonwealth Court, the failure of an expert to address each approach goes to the weight and credibility of the expert's testimony, not the admissibility. Thc:refore, an expert may testify under such circumstances, but it is still within the court's discretion to determine how much weight and credibility the expert receives. When determining market value, the highest and best uses of the land as though vacant and the property as improved are relevant factors. Highest and best use is defined as "[t]he reasonable and probable use that supports the highest present value, as defined, as of the date of the appraisal." The Appraisal of Real Estate, 8th Edition, American Institute Lf Real Estate Appraisers, 244 (1983). The highest and best use must be "(I) physically possibh:, (2) legally permissible, (3) financially feasible, and (4) maximally productive." Id at 244. The highest and best use of the land as vacant recognizes that improvement on the land may change. Structures on the land may not be replicated if the land was vacant even though the general use of the land might not change. Highest and best use of property as improved determines how the entire property should be used in order to maximize its benefits or the income it produces. ll! at 266. The cost approach to value entails: (1) Estimating the value of the land assumed vacant and available for its highest and best use. (2) Estimating the reproduction cost or "cost new" of the improvements. (3) Subtracting from the "cost new" the depreciation based on physical, functional and economic deterioration and obsolescence. (4~ Adding to the depreciated balance the value of the land. ~ Reichard-Coulston v. Revenue Board Northampton Countv, 100 Pa. Cmwth. 227, 517 A.2d 1372 (1986). When using the cost approach, the Pennsylvania Supreme Court has ruled that value in use and other special purpose valuation methods should not be considered. F & M Schaeff<a: Brewim: Comnanv v. Lehil!h County Board of Assessment Appeals, 530 Pa. 451, 610 A.2d 1 (1992). Value in use is basP.d upon the use of a property and the value of that use to the current user. The value arrived at may change due to variations In the external business environment and the management of the business. These factors may result in a higher value than the value in the marketplace. Therefore, value in use is not a substitute for fair market value and is not to be considered for assessment purposes. The comparable sales approach to value involves comparing sales of similar properties of the same type and class sold recently at a given price. If comparable properties sold for a certain price, in theory the subject property would also sell for a similar price. Since each piece of real estate is unique, adjustments (I.e. time, size, location, condition, etc.) must be made to the prices of comparable properties in order to arrive at an accurate estimate of market value. The trial court should consider how the expert arrived at these adjustments when detennining how much weight will be given to the expert opinion. Cumberland Vallev School District v. Cumberland Countv Board of Assessment Anneals, 125 Pa. Cmwlth. 649, 557 A.2d 1178 (1989). Properties may be similar for comparison purposes without being identical, and differences go to the weight of the expert appraiser's testimony. A sale of comparable property, if not too remote in time, has probative value and is admissible in evidence. It is within the discretion of the court to detennine the effect of temporal remoteness. PiltshUlllh-DesMoines Steel Co, v. Allellheny Countv, 103 Pu. Cmwlth. 61,519 A.2d 1080 (1987). The incume approach to vulue detennines the present value of future benelits arising from the ownership of the property. Net income is converted hy a capitalization rate into an estimate of present worth of market value. When developing an appropriate capitalization rate, relevant economic factors, present in the market when the property is exposed for sale, must be taken into account. Straight line capitalization is not an acceptable method. Appeal of Johnstown Associates, 494 Pa. 433, 431 A.2d 932 (1981). The income approach is an acceptable method in the valuation of rental properties. Wynn. Inc. Tax Assessment Case, 434 Pa. 49, 253 A.2d 632 (1969). It recognizes the certain fact that willing but not obligated buyers and sellers of rental properties look to net income before deciding what they will pay for the properties in which they deal. As stated in ADllCal of Mal"Jlle SDrinlllield Center. Inc., 530 Pa. 122, 607 A.2d 708, 710 (1992): "The capitalization of income approach to tax appraisals is the most appropriate if not the only valid means of establishing fair market value of real estate when the rental income is below what would otherwise be the current market level but for a long tenn commercial lease, because such long tenn leases are an accepted aspect of commercial real estate transactions and their effects have a decisive impact on the price a buyer would pay for the affected property. To interpret the tax assessment statute as requiring valuation of a property in hypothetical 'unencumbered fonn' . . . is to ignore the economic realities of commercial reql estate transactions." When using the income approach, the appropriate measure of the property's income stream is contract rent. The property must be valued "as is," that is, valued in the manner the marketplace would treat a property subject to any rental encumbrances. Aooeal of Mamie Sorinlllield Center. loc., 530 Pa. 122,607 A.2d 708 (1992). The exception to the general rule ., , I I . elL- NDV 211994 IN THR COURT OF CO ON PLEAS OF CUMaERr~NO COUNTY, 'PENNSYLVANIA 1111, tfLf - ~S8'6 ~ -~~___~M__*_____~~ -------"----------"x , ;, IN RFJ: BLUE RIOGE. WlVEN. WEST CONVALE$CEN'I' CENT.Ii:; , INC~ (LESSEE) c/o BEVERLY CALIFOl IA CORPORATION I] Appe:ljlant, -Qqaj~st- TIlE CUMBERLAND COU~ Y BOARD OF ASSESSMENT AND REV] ION OF TAXES, MunioipalitYl Eal!lt pennsboro TAX ASSESSMEN'.C' APPEAL T/lX Parcel No, 09-19-1592-022A Appel OGlS. ------------------- ------~-----------x ORDER AND NOW, this JJ""~ y ot'-1Wz.'t?,..{,<?(.. , 1994, II hllaring. in thG 8bovfl-oap~ionecl matte,l: is sOhedU18d tor JJ..u..~ ~ I J tj9 !) ~. o..k <6. 't ~ c.. fY'O. M- Q..,u.A.~~ ~o . 1l. . ' . J \l~"" l\ ,r ,\\ J)J- Qf~ I, I I , 'J , I I I I I ::~11 Pi' i ii Ii, illllll i Illlllllllfi Ii, PI HI ~,illn! "I~:: ."'" 1 q I . IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA ______________________________________x IN RE: BLUE RIDGE HAVEN WEST CONVALESCENT CENTER, INC, (LESSEE) c/o BEVERLY CALIFORNIA CORPORATION No, Appellant, -against- THE CUMBERLAND COUNTY BOARD OF ASSESSMENT AND REVISION OF TAXES, Appellees. -_____________________________________x PETITION ON APPEAL FROM THE CUMBERLAND COUNTY BOARD OF ASSESSMENT AND REVISION OF TAXES TO THE HONORABLE, THE JUDGES OF SAID COURT: NOW COMES, ~he Appellant, Blue Ridge Haven West Convalescent center, Inc, (Lessee) c/o Beverly California Corporation, a corporation authorized to do business in Pennsylvania, whose address is 770 poplar Church Road, Camp Hill, Pennsylvania 17011, by their attorney of record, David J. Kaplan, executes this appeal from the decision of The Cumberland County Board of Assessment and Revision of Taxes, alleging as follows: 1. The Appellant, Blue Ridge Haven West Convalescent Center, Inc" is the lessee to a certain parcel of real property located in East pennsboro Township, Cumberland county, Pennsylvania, having the street address of 770 Poplar Church Road, camp Hill, Pennsylvania, and described in the records of the Cumberland county Assessor as Property Number 09-19-1592-022A (hereinafter, the "Property"), with a total assessed value of $224,790. 2, In accordance with the provisions relating to appeals to a county Board of Assessment of a Fourth Class County, the . Appellant filed a timely appeal with The Cumberland County Board of Assessment and Revision of Taxes (hereinafter, the "Board"), a statement of intenti.on to appeal its annual assessment for the Property for the years beginning on and after January 1, 1995, claiming that the assessed valuation placed on the same by the Cumberland County Assessor was excessive and non-uniform. 3. On or before October 21, 1994, upon information and belief, the Board failed and refused to correct or reduce the said assessment as requested and confirmed the said assessed valuation of Appellant's property of $224,790. A true and correct copy of the decision notice is attached hereto as Exhibit "A". 4. The Appellant is dissatisfied with the decision of the Board, and will be aggrieved and injured by the unlawfully excessive, non-uniform and improperly determined assessment as it will be compelled to pay a much larger proportion of the taxes of said tax district (Cumberland County) than as its fair and equal and legal share or a portion thereof, 5, This appeal is filed in accordance with the provisions of the laws of the Commonwealth of Pennsylvania pertaining to the filing of appeals to the Court of Common Pleas from a decision of a Board of Assessment Appeals and, in particular, the provisions of the Act of June 26, 1931, P.L. 379, Section 9, as amended, 72 P,S. 5350, and the provisions of May 22, 1933, P.S. 853, Section 518.1, as amended, 72 P,S. 5020-518,1, in order that Your Honorable Court may hold a hearing and fix 11 just and proper ::::::me::V::b::c::~e:::.Vith the P::~~~ OAVIt::it:lN'Y Counsel for Appellants Blue Ridge Haven West Convalescent Center, Inc. c/o Beverly California Corporation 866 Third Avenue, 30th Floor New York, NY 10022 (212) 826-6658 Pa. Supreme Court IO No. 69313 ~ , I I I I , I I I I I I , , I I, ! I, Melissa Karron, here verify that I am the authorized agent of Bev~rly California Corporation, In ,onnectlon with the foregoing Notice of Appeal; that I am autl'lorized to execut this Verlncatlon on behalf of eald appellant; and that 8uch facts are true and rrect to the best of my knowledge, Information and belief. I further understan that this statement Is made subject to the penalties of 16 Pa.C,S, 4904 relating trl unsworn falsification to authorltleB. ~/J. Dated: November 15, 191 By: Mll1l8lB arron Manag r of Real'estate Beverly Enterprises Beverly California Corporation Corporate Tex Department , 1200 Snuth Waldron Road Suite 166 Ft. Smith, AR 72919 I I I , I , I t I '" I I I I , , " , , I I, I, " " " " I, 'I II " ., It " '4' 'I' 'J.. 'I' , 11 ~ ExhIbIt A "., ~ . ,. ' , ' , ' ' ., 141" . l , . EARL R. KEllER CHAIRMAN STEPHEN D. TilEY ASSISTANT SOLICITOR ROBERT H, C, L1SSE ABSESSMENT 1 TAX ADMINISTRATOR NANCY A, BESCH VICI CHAIRMAN RANDY l, WAGGONER CHIEF ASSESSOR MARCIA l, MYERS SECRITARV HORACE A, JOHNSON 601lClTOA WilliAM E. DENNIS CHII' CLEAK/COUNTY ADMINISTRATOR Qtumbrrluub C!Iouutg illurll of .AsllPssmtut uUllleuisbtu of nTuXtll 1 COURTHOUSE SQUARE, CARLISLE, PA 17013 (717j24(H\.150 October 21, 1094 David J. Kaplan 866 Third Ave., 30th floor New York, New York t0088 RE: Tax Parcel 09-19-1598-088A and 09-19-1508-081 Cumber lend County Ind. Dev. Authority The Doard 01 Ass6ssment Appeals Order Is as lollows: No Change, Maintain Current Market Value. ANY PERSON AGGRIEVED BY THE ORDER Of THE BOARD MAY APPEAL TO THE COURT Of COMMON HEAS BY fiLING A PETITION IN THE PROTHONOTARY'S OffiCE WITHIN 30 DAYS fROM THE DATE Of THIS NOT 1 f I CAT I ON . ( 11/81/94 ) !p,Mj./.c. ~ Robert H.C. Llsse Assessment & Tax Admn. '~ ra.< OH ~~ ~ ...:l~ Is ""III ~ ~ffi ~"" o . ~~ o E-IU ~~ ~ ~el j ~~ ]' :B 1 l~ .. ... :a i I I ~ ~ -!l 'a I ~ ~ ., ,; u ...!l 8 ~ ~ll ~ B ll] ",g!9 -..r ~';..' ,:1'1 .. ~ -.~ .., ," ,. '._1 ...- ~. .' .... '.. 7~'J ..~ ....,. < H E-li:l i:'i~ UH ~=l =lU ~~ 8~ E-li:i 11I11'I 1"1 ::SO e~ ~~ 00 1"100 ClI"I l:l...:! H...... l>l . I"IUZ l:>ZO ...:!H... 11'I E-I ..llIi~ 1"11"10 l>l~~ ZI"IO HUU I ----- , ~ ~ ~ t1 ~ ~ Q l~ . .. ~~ ~ .~ ~ ~ 1"1 :f1 III III 1"1 III III ..: ra. o ..; ~ .; I'l 0 Q) t1l 11'I Q) .-i . o-l 1 ~ ~~ 1 < I'l OE-l < o,.j U t1l ra. ~ ~~ l>lH 1"111I 11'I.... ~~ Ul>l ~~ ~ 5 >= ~ 00: ~ ~ 1 ~ .2. I 00: ~ z ~~ 1"11"1 ~l>l ~~ !:l E-<~ 1"1 xx 011I l>llll ra.1"I III =llll 1"1< ...ra. "'0 < l:l ~~ o ZP'l1ll o 1"1 H><!:;l ~~E-I 1"I0ra. ...uo " .2 i a ~ 'D I .l! ~ I ~ ~ ~ g d ~ -S .. 0 ~ .a ::: ~,~ ~.s Q 'i S ~ oM) ~ i ~ C1.. o~ i ~ i QI ~ I'l tlI . ;:l 0 tlI o-l ~ Q ....co o-l .-i CS' QI If'I :;- ~ !I ~ ~:g :.: ~ II: \.< I < '!I 'tl 0 .", . ~ \.< O~N :.2.~~r;:~co .~ i '" '5 to:::: tlI" "'0 QlN ~ l:l 00: co.., Z ~ 1l ~ 8 1 I 41 ... o !!, 11 '~ !!: ;)j .s ... o 8111 l:l o ~ ~ -{- .~ ~ ~ J 1 f .a . i V I ! g ~ I ~ I I ~ 'i 4l 'a ~ ! . J! f i I I ~ 5 o >- ! ~ ~ 1 ~ ~ ~ i " 00: ~ I . . . . , . I VIIO JULlU. eI.UM.,fttJ, INC. . STATE OF NEW YORK, COUNTY Of ..,: I, the undenilned, an attorney ad mined to practice in the courts of N.w York State. o ~ c.rtify that th. within I ..- has been compar.d by me with Ihe origin.land iound to b. a true and compl.l. copy. I 0 = stal. that I am the anorneyls) of r.cord for in Ihe witbin R eelion; I have r.ad the foregoing and know Ih. contenlllhereo/; Ibe um. il true 10 my 0" n knowl.dge, ..cept as to lh. mane.. th.rein alleged to be on information and belief, and IS to lhose mallCn I believe itlo be Irue. The reason this verific.tion is made by me and not by The aroundl of my beli.f a.s to all man.n not stat.d upon my own knowlcdg. arc a.s follows: I amrm Ihal the foreaoing Ilatem.n" ar. tru.. und.r Ih. p.nalli.s of p.rjury, Dat.d: STATE OF NEW YORK, COUNTY Of I, ..'''.....,......'thi._iiQnid.~iii.~.~....................._... I 0 10 R 55.: being duly IWOIII, d.pos. IInd lay: I am inlh. within action: I have r.ad Ihc forcgoing and know the conlcnts thereof; Ih. lam. is true 10 my own knowledg., elU:Cpl a.s to Ihe manen Iher.in slated 10 be all.g.d on information and beli.f, and as 10 those man... I bell.v. it 10 be lru.. lh. of - v_ ........ .- corporalion and a p,lIlY in the wilhin action; I have read Ihe foreaoinl and know th. conlenls Iher.of; and lh. sam. II true 10 my own knowled.., except a.s 10 Ih. man.rs Iher.in stat.d to b. alleg.d upon information and beli.f, and a.s 10 those matt.", I beli.v. ilIa be true. Thil , v.rifieation it made by me because the above party i. a corporalion and I am an officer Ih.reof. The aroundl of my beli.f al to all mane" not stated upon my own knowledge or. as follows: a Sworn 10 before me on 19 ,..,......,...............iiit._~.Uiiii.prinii;f~........_............... STATE OF NEW YORK, COUNTY OF '., ala.. and rellde al ,On f- 011...... liD!=: R 0 ~~ o 55.: tu .OR Illaa OM bal it clled,'" - INtul1 atlw ..... IYf'I "Im.. .....1: being sworn, say: I am not a party 10 Ihe action, am over 18 ye... """''''''' --. ...... 19 I s.rv.d the within by d.posiling a true copy thereof .ncloscd in a pOlt-paid wrapper, in an official deposilory und.r the exclulive care and custody of Ihe U.S, PO'lal S.rvic. within N.w York State, addr....d 10 .ach of th. following pe..ons allh.la.sl known addre.. sel forth art.r .ach name: ' .' by delivering alru. copy Ih.reof personally to .ach p.rson nam.d below 01 the addr... indicated. I knew eeeh penon servCd to be the pe"on mentioned and d.scribed in said papers as a party rhtrtln: by Iransmitting Ih. pape.. by el.ctronic m.an. 10 lhe lelephone numb.r listed b.low, which nnmber WIS designated by Ihe anorney for lueh purpose, I received a lignal from Ihe eqUlpm.nt of the anoro.y I.rved indicallng Ihal the Iransmluion was received. I alIa depolited a true copy of the pap.... enclol.d in a pOlt-paid wrapper, in an official deposilory und.r Ihe .xclusive care and cUllody of Ihe U,S. Postal Service, addrelled 10 the attorney 01 the addre.. sel forlh arter Ihe name: by depoliting a true copy thcrcof, encloled in a wrapper addr....d allhown below, into the custody of for overnight delivery. prior to the late.t time d.,ignalcd by thallcrvie. for ov.rnlght dellv.ry. Sworn to before me on 19 .. .... .'hi.Nini'~.;m;iii:ii.PMii4iieneiiii...'...............m.... , . IN RE: BLUE RIDGE HAVEN WEST CONV ALESCENT CENTER, INC, clo BEVERLY CALIFORNIA CORPORA TION, IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYL VANIA Appellant NO, 94.6586 CIVIL TERM \IS, THE CUMBERLAND COUNTY BOARD OF ASSESSMENT AND REVISION OF TAXES, Appelle CIVIL ACTION. LAW REPLY AND NOW, comes the County of Cumberland, and Cumberland County Board of Assessment Appeals, by Stephen D. Tiley, Esquire, Its Assistant Solicitor, and flies this Reply to the Petition for Review of Real Estate Assessment, as follows: 1. Admitted. 2. Admitted. 3. Admitted in part, denied in part. As indicated in the letter from Mr. Lisse dated October 21, 1994 attached as Exhibit "An to the Petitioner's Petition, the Board determined that the existing market valuation for the subject property should be maintained at the current indicated value of $2,997,200.00, which market valuation indicates a continuation of the prior assessment, in the amount of $224,790.00. 4. Denied. The averments of this paragraph, contain conclusions of law to which no responsive pleading is required. Strict proof at trial Is demanded. By way of further answer, Petitioner has the right to appeal de novo pursuant to The Fourth to Eighth Class County Assessment Law Section 7.04 (72 P.S. !j5453.704), however the Appelle maintains that the current assessment of the property reflects the correct market value therefore. - IN RE: BLUE RIDGE HAVEN WEST CONV ALESCENT CENTER, INC, clo BEVERLY CALIFORNIA CORPORA TION, Appellant VS, THE CUMBERLAND COUNTY BOARD OF ASSESSMENT AND REVISION OF TAXES, Appelle . , , IN THE COURT m' COMMON PLEAS m' CUMBERLAND COUNTY, PENNSYLVANIA NO. 94.6586 CIVIL n;RM CIVIL ACTION. LAW CERTIFICATE OF SERVICE I, Stephen D. Tiley, Esquire, do hereby certify that on this date I have served a copy of the Reply of the Respondent, Cumberland County Board of Assessment Appeals, and County of Cumberland, by sending the same to the Petitioner's attorney of record by regular United States Mail, postage prepaid, to: David J. Kaplan, Esquire 866 Third Avenue, 30th Floor New York, NY 10022. D t d ,''') " ...... 11'~'A/ a e : ~~.r ~t:'H ,,--, / ~~ ~ 7.A'-J Steph~ D. Tiley, Es~ulre Assistant Cumberland County Solicitor Attorney for Board of Assessment Appeals 5 South Hanover Street Carlisle, PA 17013 (717) 243-5838 Supreme Court I.D. No.: 32318 I~ ~ ..:I c.. , Z - U Q 0>< Z p::Z :sE-< - <2 - :sZ E-< -< oi!J :s cnP::- op ~~Z c:l> uS P:: ~E-<P:: ><t..l ~~ Zzo E-<P:: ~Q E-<< t..lt..l~ ZQ >< ;;: B ~ Oz ::3..:1 >u::l pZ ..:I E-<<:S >. <E-<< 0< !a ~ :H~~ P::..:IZ - :=zui' .A (,)E-< pP::< UZ > p:: ~ ~..,. ..,0 t..lt..l><o QZ i= <(~~N Ot..l> OOe:: O~..:Ie:: Zt..l all ~ 0 ~ E uc:l..:l ~:s>< "'u Qt..lP::< <:s ~~jll I< ;:..:I~P:: ..:Icncn :=pcn .. <>0 p::cnt..l E-<u~ en..:l t..l t..l>t..lc.. ~~><: ~ 0 ~ z~t..l oS: P:: pzc:lp:: c:lcn< "'1= _O::l.. 0_ :S<E-< <( zu ~ ..:1000 c:lUU'U p~~ ." UOO .. IN RE: BLUE RIDGE HAVEN WEST CONVALESCENT CENTER, INC. (LESSEE) C/O BEVERLY CALIFORNIA CORPORATION, Appellant vs. THE CUMBERLAND COUNT~ BOARD OF ASSESSMENT AND REVISION OF TAXES, IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA No, 94-6586 CIVIL TERM REAL ESTATE TAX ASSESSMENT APPEAL Appellee PRAECIPE TO ENTER APPEARANCE TO: Prothonotary of Cumberland County Please enter and note the appearance of the undersigned as attorneys for East pennsboro Area School District in the above captioned matter. By chard C. Snelbaker 44 West Main Street Mechanicsburg, PA 17055-0318 (717) 697-8528 Date: January ~ , 1995 LAW O"".CI'. SNELBAKER a BRENNEMAN . CERTIFICATE OF SERVICE I hereby certify that I am this date serving a true and correct copy of the within Praecipe to Enter Appearance upon the attorney for the petitioner-appellant by sending the same by first-class mail postage paid addressed as follows: David J. Kaplan, Esquire 866 Third Avenue, 30th Floor New York, NY 10022 R chard C. Snelbaker SNELBAKER & BRENNEMAN, P.C. Attorneys for East pennsboro Area School District Dated: January ~ , 1995 IN RE: BLUE RIDGE HAVEN WEST CONVALESCENT CENTER, INC, (LESSEE) C/O BEVERLY CALIFORNIA CORPORATION, Appellant vs. THE CUMBERLAND COUNTY BOARD OF ASSESSMENT AND REVISION OF TAXES, IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA No. 94-6586 CIVIL TERM REAL ESTATE TAX ASSESSMENT APPEAL Appellee PRAECIPE TO INTERVENE TO: Prothonotary of Cumberland county East pennsboro Area School District, a local taxing body with regard to the subject real estate in this matter, hereby intervenes in accordance with law as party respondent-appellee. SNELBAK , P.c. By R chard C. Snelbaker A ,torneys for Intervenor: East Pennsboro Area School District Date: January S , 1995 CERTIFICATE OF SERVICE I hereby certity that I am thie date serving a true and correct copy ~t the within Praecipe to Intervene upon the attorney tor the petitioner-appellant by sending the same by first-class mail postage paid addressed as follows: David J, Kaplan, Esquire 866 Third Avenue, 30th Floor New York, NY 10022 R chard C. Snelbaker NELBAKER & BRENNEMAN, P.C. Attorneys for East Pennsboro Area School District Dated: January S , 1995 ~ ~ .-..--- .. L~i.- NaV 21 199.. . .".1. IN THR COURT OF COlON PLEAS OF CtlMBERJ..AND COUNT'i ,lpENNSYLVANIA '~ ' , I --~--------~----~- -------------------x IN ,lUll aLUE RIDGE, l"..AVEN;'WEST : CONV~LESCENT CENT!; ,:INC~ (LESSEE) c/o BEVERLY CALXFOI XA CORPORATION .:t/lltf- (;~~& I, ,. II" . ... . , " , .. 1.111 , ." I -o.ga j st- : TAX ASSESSr.tEN'.(' ..', ,...., AP'PEAL TalC Purcal No, 09-19-1592-022.A .. ,,' ,', ' I Appe:'! lant, ; TlIE CUM13ERLft,ND COU~, '{: IlO"RD OF " 1 AsseSSMENT AND ~EVI r.o~ or TAXES, Nunic.i.po1\litYI ,..,' "! East Pennsboro Appel. OGe, : : -___~_"_____"______Il_~_____________.~__~, .' ~ ORDER AND NOW, this Ol.:l I Y of:'Ol~"" , 1994, a hearing .Jl1 ".. I, " the, ahcwe-oaptionad: rnat~6!l: is scheduled tor ~~ 8 ,/,'1r( ltn- , o.::k 8: -15" 0.. .......... ~ 1l.0".:::II. . : ' :: :: - , , " ... :' ., .I" , " II BY THE COURT l I """'1- C;-"'Y 'r'?"'t,' "', r:"':j'\D · : ,',...!: ...., ~, . It. .... I I , . ~.... .. In T,,\t'Ir.~:~" \ h:r;~i, ! h<.~J un:o 5,11 ~y hand: .3,,<1 thu seal oi ~J:cl Court at Carli~!c, P . : TI' ",,,,.J dllY 01..:71 rN..:,~ 119..q,~ : 115 ..,!>l.,^........ ..v..( ~. li ' ,~~(..,Q...~..,~Y!t<.I.<...... ' '.' ................ 'bf1<t PrOlhonOlar~ l;pi! I :;i; ij,j II ~lIllr' 111111111 ii j 11'1111 :.:: II II! 'I ~::,: "1 11"1' ',. ,t I ::,{ I:J1,c<~ )".). ~y , I . ; . . . ,I\. .., , .....i - I;" - - - (~ l s s ~ U :E: F 1Il 1Il llIl 1Il ~ llIl 1Il ~~ 1Il .0: Is<.o: 0'" 0"" UllIl Is< ~ ~e; 0 ~ l ..:t ~~ . '" 1Il!A ~ \ ~ ~O ,~ ~1Il - 0 i ~ ~E %~g It.l I ~ " " I ~s . ~P< ... ... en ~s \a en Q) lQ) ~ .11 0 l:l Q) ... \ ~~ llIllll ... ."" o~ ... ; \ ClllllO ... III U ... A~~ Q) co Is< Q) ~ ... 11::1 ... ! ......... P. III \i p. ... l:l co '" 00 '" 0 ~ ~ Q) ~Q) '" ~ i co i~ ,U , ~ a g: ! ~ ~~ It'I ~~.o: 'a ~ ' '" ~ .0: \.I I , ~........ llIllll lod 0 ~'" i ..:t !A ~~ !AH 0 . \.10,:.1'" '" B~ .., 11'''''''' \.I co ~ .l! ,.p.iO ~ ~,t:Is< 0 . \ cl ~llIl llIlllllls< A ~ :><,-.. \ 'a \ ,~ ~~ "'~.... .... 1 ,t: '" '1 1 I 1 \Z~~ ~~ ~ '" ... :>>... l ",0Q)'" f? HUU A co<'l\Z..... \ ,~ \ ';l ! '" - .... ~ . ... .l! l l 1 \ 'i \ \\ to \ \ ~ ~ ~ ~ il i ~ ~ II , ~ i i ! ' ~ ~ i i ! \ \ 0 >' 1 \ .~ .llte 'a >' 1 . ~ .~ ~ 1 i · .9 II ~ 'a '; 9 "5 ~ .!! ~ i\ .~ .l! ~il\ ~ \ ~ ~ ~ \ 1 \ ... 1l';l1 i 0 ~~!l 0 IJ ~ II 'O~ " f? .. . . i'" ~ 0 ~ \ I" l\' I '; IOClh) A1U . '" Pd~ .L '..' l..J......n U......., , . "ao Juuua IILU..DlI'G. 1f'tC STATl! OF NEW YORK, COUNTY OF ,",; I,IM undenlgned. 1\lllsoeney admilled 10 pra",i.,. in Ihe court. 01 New York Stale, o - cerlily Ihallhe within I e,A_ has been compared by me with Ihe original and found 10 be a true und complete copy. I 0 -. alalelhll' am _ Ihe allorney(l) of record for In 'he within I lCIion; 1 have read Ihe foregoing und know Ihe conlCnlt lhereof; tI Ihe lame II true 10 my own knowledge, CXCOpll1S In Ihe mailers Iherein alleged 10 be on inlormallon and belief, and 1"0 Iho" malle" 1 believe It 10 be lrue, The reason Ihil verification i. made by me und nol by The IrO'Jndl 01 my belief as 10 all miller. nOI"aled upon my own knowledge ure II lollows: I affirm thallhe loreloing .llremenlS are Irue. under Ihe penallies of perjury, Dlled: STATE OF NEW YORK, COUNTY Of I, ...........Thi._~._...~......""...................... I 0 10 I IS.: being duly .worn, de po.. .nd .ay: 1 am in Ihe within Iction; I have read the lore going and know Ihe contento Ihereol; the lame II true '0 my own knowledge, ex"PI as 10 Ihe malle" Iherein "ated 10 be olleged on inlnrmation and belief, Ind .. '0 Iho.. mallen I believe 1110 be lrue. Ihe of ......... v_ - -- corporal ion and a party in Ihe wilhln action; 1 have read lh. loreloln. and know Ihe conlenl. Ihereol; and Ihe lame II true 10 my own knowledge, excepl as 10 ,he mallCtl Iherein"ated to be alleged upon informal Ion and belief,andlllolho..mallen' believe II lobe Irue.Thil ' verlfieltlon Is made by me becau.. Ihe above parly 10 a corporation and I urn an officer 'hereol. The .round. of my bellel as 10 all malle.. nOI.taled upon my own knowled,e arc as lollows: a Sworn 10 belore me on 19 ........."..............'ibi._ii9iiId._iitr;iiiitd.~........__......._.... STATE OF NEW YORK, COUNTY OF I, , of ap and mide II On '0 - ...... 51.: lU ~ lhalt ... 110, M cMchll .,.. 1M.. .rw ...... '.... qf..... ......). being .worn, .ay: . am nol a party 10 Ihe aClion, am over IS yc~ iO 10 o ,.,.,.. -'" - -.. - - 19 '..rved Ihe wilhln by depolitlng a lrue copy Ihereof enclolCd in a pOll-paid wrapper, in an official depolitory under Ihe exelOllve care Ind cuslody 01 Ihe U.S. Po..al Service wilhin New York Slate, addre'ICd 10 eaeh of Ihe lollowinS pe..ons al Ihe las' known add res. .., forlh afler each name: ' by delivering a lrue copy Ihereof pe..onally 10 each pe..on named below a'the add.... indiealed. 1 knew each penon 1CfVed' 10 be Ihe person men'ioned and de.cribed In .aid pape" II a parly rhtreln: by tran.mllling the pape.. by electronic mean. 10 Ihe 'elephone number ti..ed below, which number was designated by Ihe ' allorney lor .uch purpose. . received a .ignal from 'he eqUlpmenl 01 Ihe allorney IOrved indlcatlnSlhallhetransmlsslon was received. . al.o depo.ited a 'rue copy 01 Ihe pape.., enclolCd in a pO"-paid wrapper, in an official depo.ilory under lbe exclulive care and eUltody 01 ,he U.S. PO'lul Service, addre'lOd 10 the alloroey althe addms lOt lorlh after Ihe name: by depo.idng a true copy thereol, enclolCd in u wrapper addressed as Ihown below, inlo Ihe cWlndy 01 lor overnight delivery, prior to the lale" lime delignaled by IhatlOrvicc lor overnighl delivery. ......... """'" - Sworn '0 berore me 0:1 19 . .. ',hi'n&mI'~N,i_ii>>'pnn" binMi"................ , . - - .. IN TilE COURT OF COMMON I'LEAS OF ClJMUERLAND COUNTY, I'ENNSYLVANIA IN RE: BLUE R(()(jE IIA VEN WEST CONVALESCENT CENTER. INl'. (LESSEE) c/o BEVERLY CALIFORNIA CORPORATION TAX ASSESSMENT APPEAL Tax Parcel No. 09.19-1592.022A Appellanl. -ngainsl- TilE CUMBERLAND COUNTY BOARD OF ASSESSMENT AND REVISION OF TAXES. Docket No. 94-6586 Civil Term Appellees, I'RAECII'E FOI~ WlnlDl~A W AI, AND ENTRY OF API'EARANCE TO THE j'ROTHONOTARY: Kindly wilhdraw Ihe appearunee of David J. Kaplan. Esquire on behalf of Ihe Pelitioner, Blue Ridge Haven West Convalescent Cenler. Ine, nnd enter my appenrance as counsel for the said Petitioner. A TRICK O'BRIEN, ESQUIRE orney for Petitioner lue Ridge lIaven Wesl Convalescent Cenler. Inc. (Lessee) c/o Beverly Californin Corporalion 214 Norlh Jackson Street I' .0. Box 626 Medin, Pennsylvania 19063 (610) 565.3800 AHorney LD, No, 08648 DATED: B.\" \~b . ....... " IN THF. COURT OF COMMON PLEAS OF CUMDEI{LANI) COUNTY. I'ENNSYLVANIA IN RE: BLUE RIDGE HAYEN WEST CONV ALESCENT CENTER. INC, (LESSEE) c/o BEVERLY CALIFORNIA CORPORATION TAX ASSESSMENT APPEAL Tax Parccl No. 0'1-19-1592-0221\ Appcllant. -against- TilE CUMBERLAND COUNTY BOARD OF ASSESSMENT AND REVISION OF TAXES. Dockct No. 94-65116 Civil Tcrm Appcllees, WITHDRAWAL OF AI'PEARANCE TO THE PROTHONOTARY: Kindly withdraw my appearance on behalf of the Pctitioncr. Bluc Ridgc Haven West Convalesccnt Ccnter, Inc. in the abovc eaPtion~ '--V~ ENTRY OF AI'PEARANCF. TO THE I'IWTHONOTARY: o'mUEN, ESQUIRE Kindly cntcr my appcarancc as counsel for c Pc tioncr. Blue Ridgc Haven West Convalesccnt Ccntcr. Ine. ill thc above captioncd 111' ller. fr -1' '- . a I~; i'''' ,-..:, i~ ~ ;--; ~{' ,-. <'; --. ._It.~ If'i' (l_ ':)~..~ ~L .::l(.'; (;',\ ;",r'{fl LUL:.- I ,"17: eft'! C:l I jjj.J ,,-, L~ 1 o_ F" L<- II. '" =5 0 (" u ..' , . IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA IN RE: BLUE RIDGE HAVEN WEST CONY ALESCENT CENTER, INC. (LESSEE) c/o BEVERLY CALIFORNIA CORPORATION Appellll/lt, TAX ASSESSMENT APPEAL Tax Parcel No. 09-19-1592-022A -against- THE CUMBERLAND COUNTY BOARD OF ASSESSMENT AND REVISION OF TAXES. Docket No. 94.6586 Civil Term Appellees. WITHDRAW At OF APPEARANCE TO THE PI<OTHONOTARY: Kindly withdraw my appearance on behalf of the Petitioner, Blue Ridge Haven West C,,"'='"' "".'. I"" i, "" ,b'" '"P""y ~ y, DAVID J. KAPLAN, ESQUI ) ENTRY OF AI'PEARANCE TO THE PROTHONOTARY: Kindly enter my appearance as counsel for e Pe tioner, Blue Ridge Haven West CoO\'alescent Center, Inc. in the above captioned mer. ' 'BRIEN, ESQUIRE IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA IN RE: BLUE RIDGE HAVEN WEST CONVALESCENT CENTER, INC. (LESSEE) clo BEVERLY CALIFORNIA CORPORATION Appellant, TAX ASSESSMENT APPEAL Tax Parcel No. 09-19-IS92-022A -against- Appellees, Docket No. 2 94-6586 Civil T~~ . :'- " "~t (~~. ;:; .' ;I::~ f:-2'~, .....S; ~ -- '':> ~ C;, ,1 .., :-1 :-, <1 ~I , \.:l .,', ;_l -n -I :J: ~. . , '& "f' ,::5' c ~ ~ ~ THE CUMBERLAND COUNTY BOARD OF ASSESSMENT AND REVISION OF TAXES, PRAECIPE FOR WITHDRAW AL AND ENTRY OF APPEARANCE TO THE PROTHONOTARY: Kindly withdraw the appearance of David J. Kaplan, Esquire on behalf of the Petitioner, Blue Ridge Haven West Convalescent Center, Inc. and enter my appearance as counsel for the said Petitioner. A TRICK O'BRIEN, ESQUIRE orney for Petitioner lue Ridge Haven West Convalescent Center, Inc. (Lessee) c/o Beverly California Corporation 214 North Jackson Street P.O. Bo" 626 Media, Pennsylvania 19063 (610) 565-3800 Attorney I.D. No. 08648 DATED: 9.\'\\cu, IN TilE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA IN RE: BLUE RIDGE HAVEN WEST CONV ALESCENT CENTER, INC. (LESSEE) c/o BEVERLY CALIFORNIA CORPORATION Appellant, TAX ASSESSMENT APPEAL Tax Parcel No. 09-19-1592-021 -against- THE CUMBERLAND COUNTY BOARD OF ASSESSMENT AND REVISION OF TAXES. Docket No. 94-6587 Civil Term Appellees. WITHDRAW AL OF APPEARANCE TO THE PROTHONOTARY: Kindly withdraw my appearance on behalf of the Petitioner, Blue Ridge Haven West Convalescent Center, Inc. in the above captioned matter. . c;?dL.?f2 ENTRY OF APPEARANCE TO THE PROTHONOTARY: Kindly enter m)' appearance as counsel for the titi er, Blue Ridge Haven West Convalescent Center, Inc. in the above captioned matter. PATJUCKO'BJUEN,ESQUlRE FIL ED-oFF1Cl: O~ ~,,- ""~I~II~,. ''-'T, "y j" Ii'"' .~ " """ IIIVl t.~r' '"'' "; I ~U ._, , ! " , I . t1[] I j J I~. CW,:.::'.,.",! ,~_ "I'i,. PEN;\SrLW~\j: i I , , \ t \ ',f IN RE: APPEALS OF BLUE RIDGE HAVEN WEST CONVALESCENT CENTER, INC. IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNlY, PENNSYLVANIA ./ : . 94-6586 CIVIL TERM : 94-6587 CIVIL TERM iN RE: REAL ESTATE TAX ASSESSMENT APPEALS ORDER OF COURT AND NOW, this Q.b ~ day of September, 1996: (1) The common level ratio for the 1995 tax year Is 7.5 percent. The actual value of the subject property Is $5,500,000. (2) The common level ratio for the 1996 tax year Is 7,3 percent. The actual value of the subject property Is $5,750,000. / I 1 Edgar B. Bayley, J. '''} Joseph Patrick O'Brien, Esquire For Blue Ridge Haven West Convalescent Center, Inc. Stephen D. Tile,!, Esquire For the Cumberland County Board of Assessment and Revision of Taxes RlchEird C. Snelbaker, Esquire For East Pennsboro Area School District :saa IN RE: APPEALS OF BLUE RIDGE HAVEN WEST CONVALESCENT CENTER, INC. IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA 94-6586 CIVIL TERM 94-6587 CIVIL TERM IN RE: REAL ESTATE TAX ASSESSMENT APPEALS QfJlNION AND ORDER OF COURT BAYLEY, J" September 26, 1996:- Blue Ridge Haven West Convalescent Center, Inc., filed appeals from assessments of its property in East Pennsboro Township, Cumberland County, where It operates a 313 bed nursing home. Blue Ridge Haven West has the most beds of the many nursing homes in this area. Beverly Enterprlses, Inc. has operated the facility for the last twelve years. Constructed in stages in 1966, 1968, 1970 and 1975, the nursing home is located In a large building containing sections comprised of one and three stories. There are 8.8 acres of land. The highest and best use of the property Is as a nursing home. The common level ratio for the 1995 tax year Is 7.5 percent. It is 7.3 percent for the 1996 tax year. The property was assessed for the 1995 tax year at $524,130,1 which Indicates an actual value of 56,988,400, The property was assessed for the 1996 tax year at $524,130, which indicates an actual value of 57,179,863. The Cumberland County Board of Assessment and Revision of Taxes denied the owner's appeal of the assessments for both years. On June 20 and August 1, 1996, a de 1. The total assessment of $524,130 comprlses two parcels assessed at $299,340 and $224,790. €l4-8586 CIVIL TERM 94-6587 CIVIL TERM novo hearing was conducted. The Issues have been briefed and argued. The Fourth to Eighth Class County Assessment Law, 72 P.S. Section 5453.101 In m., requires a determination of the "actual value" of the taxpayer's property.a In County of Monroe v, Plnecrest Development Corp., 98 Pa. Commw. 200 (1966), the Commonwealth Court stated: Pennsylvania case law has consistently held that actual market value Is that price which a purchaser, willing but not obliged to buy, would pay an owner, willing but not obliged to sell, taking Into consideration all uses for which the property Is adapted and might In reason be applied. We must weigh all the evidence and Judge the credibility of all the witnesses. Cumberland Valley School DistrIct v, Cumberland County Board of Assessment Appeals, 125 Pa. Commw. 649 (1989). The opinion of the expert witness for the taxpayer as to the actual value of the subject property was sufficient, competent, credible, and relevant evidence to overcome the prima facie validity of the assessments. See, Deitch Company v, Board of Property Assessment, 417 Pa. 213 (1965). The function of the court Is "to weigh the conflicting testimony and values expressed by the competing experts and arrive at a valuation based upon the credibility of their opinions." County of Monroe v. Bolus, 149 Pa. Commw. 456 (1992). The taxpayer's expert Is James Tellatln of Chesterfield, Missouri. He Is a 2. 72 P.S. ~ 5453.602(a), -2- 94-6586 CIVIL TERM 94-6587 CIVIL TERM Member of the Appraisal Institute (MAl), and he specializes In appraising nursing homes. Over the last twenty years, he has appraised approximately 1,500 nursing homes In fort'l states. Approximately thirty-five of those nursing homes are In Pennsylvania. The expert for the taxing districts Is Steven W. Barrett, a Certified General real estate appraiser In Carlisle, Cumberland County. He has completed the course requirements for a MAl but has not yet taken the examination. His business Involves approximately eighty percent appraisals and twenty percent brokerage. This Is his first appraisal of a nursing home. Mr. Barrett gave the most welg~t In his appraisal methods to an Income approach for which he ascribed an actual value of the subject property of $6,722,000, His secondarv method was the cost approach for which he ascrlbed an actual value of $7,346,700. While there have been sales of nursing homes In Pennsylvania, there has not been a sale of a facility similar to the subject property. Barrett testified that he had little specific Information regarding those sales so he did not undertake to make adjustments to the actual sale prlces using a traditional sales comparlson analysis. However, he stili considered some of those recorded sale prlces, which he described as the "best possible," as a guide to come up with a "raw prlce per bed" for which he made adjustments for fumlture, fixtures, equipment and goodwill to ascrlbe an actual value of the subject property of $7.219,000, Barrett reconciled his appraisal methods for an actual value of the subject property for both the 1995 and 1996 tax -3- 94-6586 CIVIL TERM 94-6587 CIVIL TERM years, of $7,000,000,3 Mr. Tellatln testified that he considered a sales comparison approach but that such an appraisal method Is not valid In this case. Although there have been other sales of nursing homes In Pennsylvania, they are not comparable sales from which a credible sales comparison approach to the subject property can be made. Tellatln gave the most weight In his appraisal methods to a cost approach. His secondarv method was the Income approach. Tellatln testified that since the sale price of a nursing home Is uniquely affected by the business component of the operation and given the unique status of the nursing home's reimbursement methodology, an Income approach was not as relevant as a cost approach. As of September 1, 1994, Tellattn ascribed an actual value of the subject property using the cost approach of $5,083,000, and the income approach of $2,499,000. He reconciled the actual value to $4,500,000, As of September 1, 1995, Tellatln ascribed an actual value of the subject property using the cost approach of $5,005,000, and the Income approach of $5,148,000,4 He reconciled the actual market value of the subject property to 3. Barrett's written appraisal had a reconciled actual value of $7,400,000. However, during cross-examination he reduced that amount to $7,000,000 after acknowledging that he had made a mistake Involving Income mix In his income approach for which reduced his opinion of actual value from $7,570,000 to $6,722,000. 4. Tellatln prepared an Initial written appraisal In which, using an Income approach, he arrived at an actual value as of September 1, 1995, of $7,628,000. He testified he made a mistake In methodology which he corrected In his second written appraisal to an actual value of $5,148,000. -4- " 94-6586 CIVIL TERM 94-6587 CIVIL TERM $5,100,000, Tellatln testified that the large difference of $2,659,000 ($5,148,000 minus $2,489,000) In the actual value of the subject property In his Income approach between September 1, 1994, to September 1, 1995, was due to an Intervening change In the Medicaid reimbursement formula that benefited the Income of nursing homes Including Blue Ridge Haven West. In weighing the conflicting testimony of the expert witnesses, we agree with the taxing districts that the actual value ascribed of the subject property by Mr. Tellatln In his cost approach Is too low because his deduction of depreciation from his estimated reproduction cost Is higher than Is supported by the credible evidence.' Tellatln estimated total depreciation as of September 1, 1994 of 45 percent, and as of September 1, 1995 of 50 percent. D For long-lived phvslcal depreciation, his estimate as of September 1,1994 was 40 percent and for September 1,1995 was 41.7 percent. As to Tellatln's Income approach In which the net Income that the taxpayer's facility can produce Is capitalized, we conclude that In estimating net Income he did not sufficiently consider the short-term adverse affect on the net Income of this taxpayer caused by management problems, labor strife, and temporary govemment restrictions of patient admissions. Overall, we find that Tellatln's ascribed actual value 5. Tellatln started his cost approach by estimating that the total cost new of the building would be $8,667,101, with site Improvements of $293,557 for a total of $8,960,658. He estimated the land value at $592,000. 6. Both appraisers agreed that the nursing home had an overall chronological age of 25 years with the total life of the Improvements being 60 years. -5- '. 94-6586 CIVIL TERM 94-6587 CIVIL TERM of the subject property using the Income approach Is lower than Is supported by the credible evidence. Having found that the ascribed values of the subject property In both the cost and Income approaches of Tellatln are lower than supported by the credible evidence, we conclude that his reconciled actual values of $4,500,000 as of September 1, 1994, and $5,100,000 as of September 1, 1995, are too low. We agree with the taxpayer that there are no sales of nursing homes upon which a credible sales comparison approach can be based. The sale prices of nursing homes which are uniquely affected by the business component of the operation cannot be credibly estimated by making adjustments using a cost per bed analysis. As for Barrett's cost approach, we conclude that the actual value he ascribed to the subject property Is too high becall..." :~!c; deduction of depreciation from his estimated reproduction cost Is lower than supported by the credible evldence.7 Barrett considered total depreciation of all Improvements at 10 and 20 percent which he reconciled for both tax years at 15 percent.' As to Barrett's Income approach, we conclude the actual value he ascribed to the subject property Is too high because he failed to make necessary adjustments to gross revenue which are 7. Barrett started his cost approach by estimating that the total cost new of the building would be $7,946,706 plus depreciated site Improvements of $150,000 for a total of $8,096,706. That Is $863,952 less than Tellatln, He estimated the land value at $442,000. That Is $150,000 less than Tellatln. e. Marshall and Swift publications for commercial properties that both appraisers' consulted, and which are a guide only, called for depreciation of 33 percent. .6. 94-6586 CIVIL TERM 94-6587 CIVIL TERM supported by the credible evidence based on the actual reimbursements by Medicare for the anclllarv services provided at Blue Ridge Haven West. Furthermore, It Is difficult to understand how Barrett during cross-examination can make a $846,000 correction (the difference between his original estimate of $7,570,000 and $6,722,000), because of a mistake In his Income approach to which he oave the most weicht, yet credibly only reduce his reconciled actual value by $400,000, the difference between his original estimate of $7,400,000 and $7,000,000. Having found that the ascribed values of the subject property In both the cost and Income approaches of Barrett are higher than supported by credible evidence, and that the manner In which he arrived at the actual value of the subject property In a sales comparison approach Is not credible, we conclude that his reconciled actual value of $7,000,000 for the 1995 tax year and 1996 tax year Is too high. In considering all of the evidence, and weighing the qualifications of each expert witness, their conflicting testimony and opinions, and the strengths and weaknesses of their opinions, we conclude that the actual value of the subject property for the 1995 tax year Is $5,500,000, and for the 1996 tax year Is $5,750,000. ORDER OF COURT AND NOW, this z/,/... day of September, 1996: (1) The common level ratio for the 1995 tax year Is 7.5 percent. The actual value of the subject property Is $5,500,000, -7-