Lansford Borough will join the Panther Valley School District in challenging a Carbon County Board of Assessment Appeals ruling that exempts a subsidized housing project in the former St. Ann's School from property taxes.

The appeals board on Aug. 19 granted the request of Catholic Senior Housing Development and Management to free the project from paying borough, school district and county real estate taxes, concluding the project fit the definition of a charity. The ruling resulted from the firm's appeal of a parcel of land assessed at $4,850.

Without the exemption, the firm would have paid property tax bills of $270 to the school district, $142.64 to the borough and $33.44 to the county. County commissioners have yet to discuss the borough and school district's decision to appeal, said Commissioner's Chairman William O'Gurek.

The $3 million project to tear down a former convent on one of the two parcels and convert the school at 30 E. Bertsch St. into 17 apartments for older, low-income people is being largely paid for through the federal Housing and Urban Development program. HUD kicked in $2.5 million of the cost.

At a public meeting Wednesday, borough solicitor Robert T. Yurchak told council of the school district's plans to appeal the tax ruling; council subsequently voted to join in.

"We're losing a nice chunk of change there," said Councilman Tommy Vadyak.

Council President Bob Gaughan questioned the appeals board's determination of the project as charity.

"How does a corporation become tax-exempt?" he asked. The tenants "will be paying to stay in this place, unless I'm missing something somewhere. Which means that there is revenue coming in, but somehow or another they've managed to slide underneath that whole thing."

Gaughan said he was frustrated with the way Catholic Senior Housing has been handling the project. The firm has failed to acquire the proper permits and has not worked with the borough.

"They actually need to go through some significant paperwork and inspection processes before they start moving anybody into that building," he said. "I just want to make (all permits are obtained) before I see seven moving vans sitting in front of the place."

Yurchak said the company cannot just move people in without obtaining the proper documents.

"They need an occupancy permit," he said.

Council was dismayed to see that Catholic Senior Housing has been publishing advertisements in out-of-the-area newspapers seeking tenants. Vadyak said he was "shocked" to see an advertisement in a Pottsville newspaper.

"They really didn't want anybody from the local area," Gaughan said. "This is for Allentown-Bethlehem-Easton."

In a related matter, Catholic Senior Housing is questioning bills submitted by borough engineer Cowan Associates' employee Carl H. Wischner Sr.

On Aug. 26, Yurchak wrote to Catholic Senior Housing, requesting that it fulfill its promise to keep $5,000 in an escrow account to pay various bills, including engineering fees. The account, Yurchak wrote, "is virtually depleted. This has caused (borough engineers) Cowan Associates not to receive payment for their work. Invoices of $12,741 for June and July remain outstanding and must be paid immediately."

The firm would also owe money for services delivered in August. Yurchak asked that the firm "forward the sum of $22,000 to cover the expenses incurred and expected to be incurred."

However, in a Sept. 3 letter to Yurchak, Catholic Senior Housing director Mark Mason wrote about Wischner's invoices. Wischner had been attending construction meetings and spending time at the site. Mason said he and the general contractor architect "understood that Mr. Wischner's services were limited to monitoring the replacement of the Bertsch Street storm sewer pipe and the paving in that area."

But Wischner, Mason wrote, was "involved far beyond the scope assigned to him by the Borough of Lansford." Mason has not heard back from Wischner. He wrote that Wischner's invoices "did not provide details of any dates or times or services he purports to have provided."

Further, Mason wrote, "an investigation of the invoices has surfaced a number of questions as to the tasks Mr. Wischner has performed and why her has performed such tasks. Once Mr. Wischner provides documentation to support the invoices he has submitted, I would be in a position to address the billing."

Yurchak on Wednesday told council that Mason "is not balking at paying the bills, but he is questioning Cowan Associates' (engineer) attending all the construction meetings and essentially getting billed $5,000, $6,000, $7,000 a month."

Once Catholic Senior Housing gets some answers, he said, then payments can proceed.