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Davison County challenges exempt statuses of local non-profits

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Davison County challenges exempt statuses of local non-profits
Mitchell South Dakota 120 South Lawler 57301

On Tuesday, the day income taxes were due, taxes were also a point of conversation at the Davison County Commission meeting.

Meeting as the county board of equalization, the commission took up the tax-exempt status of numerous Mitchell properties to make sure specific lots continue to meet the requirements to be exempt of property taxes.

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Most of those properties retained their tax-exempt status, but board member John Claggett stressed the importance of making sure equalizations were justified.

"It comes back to the justice of this and making sure that the rationale is the same for everyone," he said. The meeting was held at the courthouse in Mitchell.

Most prominently, the board considered Wesley Acres, the independent living facility for senior citizens on West Havens Avenue in Mitchell.

Wesley Acres was previously considered as an assisted living facility under state codified law for tax purposes, but now will fall under the "congregate housing" exemption, which is a shared living facility for senior citizens and is neither a nursing home or a medical care facility.

Donna Weiland, the CEO of Wesley Acres, said the average age of a resident at the 58-room facility is 86 years old.

In a congregate living, the facility must provide health care and nutritional services. Weiland said a nurse from Dakota Wesleyan University visits every Monday and refers residents to a physician if needed and Meals on Wheels provides a daily dinner for residents.

Wesley Acres is a 501c3 non-profit and Weiland said the organization had $2,243 in the bank at the end of 2013.

"We don't have someone at the end of the rainbow making money," Weiland said.

The commissioners said Wesley Acres accurately fit the definition of a non-profit that should be exempt because the facility provided more services than someone living in an apartment complex on their own.

"It's taking care of residents that are 62 or older," said board member Gerald Weiss. "If it was younger, it would be a different story. We need places like this. There's going to be an increased amount of people who are going to need this going forward."

Weiland said a change in tax status would have strapped Wesley Acres, which would have had to cut back on its 24-hour care or raised its rent by $50 or $75 per month. Residents pay between $250 to $380 per month, Weiland said.

The board also approved the tax-exempt status of four lots DWU owns near its campus, including three that will be part of the school's new wellness center on the south side of West Norway Avenue. The school owns the lot at the 1524 S. Duff St., which will eventually house an additional shop space, according to Theresa Kriese, the school's executive vice president.

An open lot owned by Lifequest along North Eighth Street will remain tax-exempt because the lot is used by the non-profit organization for parking or storage and is contiguous to the organization's existing campus.

A parking lot owned by Avera Queen of Peace at 1120 E. Sixth Ave. will be tax-exempt after re-evaluation from the county's office of equalization. Director Kathy Goetsch said the lot was previously missed by previous equalization directors.

Some of the conversation surrounded Avera's acquisition of University Physical Therapy last year, which now will not pay taxes. The business paid $11,378.22 in taxes in 2013 but will be exempt in 2014 because it is under the hospital's umbrella.

Avera Queen of Peace Hospital Vice President and CFO Will Flett said the location is an extension of the hospital's previous physical therapy and outpatient therapy work.

Claggett said the county should be doing its diligence to make sure those who receive a tax-exempt status truly meet the criteria. Claggett said some change should be considered at the state level to consider having non-profits at least paying some portion of market value toward properties.

Other business

In regular business Tuesday, the commission:

• Approved a plat change in Section 1 of Badger Township from Loren and Julie Van Overschelde to adjust two tracts on their land.

• Approved $20,000 in funding for a State Department of Transportation road study that will be done this summer to better examine the county's road needs. The majority of the remaining cost will be covered by federal funding sources.

• Learned Prosper Township has left the county's township road maintenance responsibilities in favor of a private road contractor. Perry, Rome and Tobin are other townships that have also privately hired out their snow removal and road grading.

• Heard from Highway Superintendent Rusty Weinberg, who said the county will have to spend an extra $20,000 on bridge inspections this year due to a new federal mandate regarding multi-axle trucks. He said it would likely come from the existing highway budget.

• Approved the bid to reshingle the roof of the county public safety building, which suffered damage in the 2012 hail storm, to Konrad Construction, of Mitchell, with the winning bid of $1,520.41.

• Approved abatements, bills, timesheets and previous meetings' minutes.

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