Avalon Bay PILOT Program Gets Board of Ed Support

The is comfortable with the proposed Payment in Lieu of Taxes (PILOT) program the borough is considering entering into with Avalon Bay, according to remarks made at Monday’s board meeting.

“We heard from our own person and now we’re ready to move forward and we didn’t appreciate the criticism,” Board Member Thomas Kroncke said.

Kroncke was referring to remarks made by Councilwoman Linda Shortman and members of the public regarding their disappointment that school board members did not attend and express their opinions on the program.

With the proposed program, the developer of Avalon Bay, a 174-unit luxury apartment rental complex, would make payments to the borough at a minimum of $550,000 per year (expected to increase by at least 2 percent every year) over a 30-year period. About 95 percent of the money obtained would be kept by the borough while about 5 percent would be given to the county.

Under standard taxation the money collected is divided amongst the school district, municipality and county. The PILOT program excludes the school district, with the exception of the money the district collects from land taxes.

The board of education began Monday’s meeting with a presentation by school district Auditor Charles Ferraioli, who explained the concept of the PILOT program to board members and the public. According to Mayor Jonathan Dunleavy, who was in attendance at Monday’s board meeting, immediately after the PILOT program is approved, if it is approved, a subsequent ordinance mandating that all of the money gained through the program be used to pay down borough debt will be introduced. Additionally, Dunleavy said an ordinance would be introduced that would state that if the school district is impacted by the development and an influx of students, the borough will compensate for the increased costs. Avalon Bay projects a total of about 12 students could move in to the development.

Ferraioli said he typically does recommend, when the option is presented, that his municipal clients participate in PILOT programs.

“I don’t see where a school [district] would get hurt unless you have a tremendous increase in population,” Ferraioli said.

Ferraioli said the borough could set up a reserve fund that would keep money available in case the school district needs it. But Councilman Ray Yazdi, also in attendance at Monday’s meeting, said keeping money aside that could be used for tax relief once the borough’s debt has been paid off may be counterintuitive since the money reserved could be used for immediate tax relief once the debt is paid off.

“We have to be very smart about this,” he said. “We’re all getting crushed by our taxes.”

Board Member Cathy Gurbisz was concerned about students moving into the borough reaching high school age and attending , when tuition would need to be paid for those students. Resident Jim Schalago also had concerns over high school students.

“Even if they’re not high school students now, if they stay here, they will be,” he said. Schalago said he was in favor of the reserved money for the school district.

Business Administrator George Hagl also said the reserve fund would be a good idea. But Dunleavy reiterated that the borough would assist the school district, regardless of a reserve fund, if additional expenses result from the students brought in through the development.

He also told the board that his plan is to continue encouraging development on Union Avenue.

“The goal is not to just remain specific on this one project,” Dunleavy said. “I believe this is Step One for the municipality."

Toward the end of the discussion, Board President Lauren Grecco said the board felt comfortable with the proposed program and the borough's decision, should it be approved. The council will be meeting and possibly voting on the PILOT program at the Sept. 18 meeting at 7 p.m. at Bloomingdale Borough Hall on Hamburg Turnpike.