April 24, 2014

Elyria
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City and nonprofits get their liens crossed

LORAIN — A paperwork error has led to nearly $100,000 in unpaid property taxes for the buildings housing the Black River Historical Society and the Lorain City Health Department.

Together, the Moore House Museum, on West Fifth Street, and the Health Department, on West Erie Avenue, have a total of $94,000 in unpaid property taxes.

Frank Sipkovsky, a Black River Historical Society trustee and former president when the society took over the property’s lease from the city in 1997, said the society became aware of the discrepancy in 1999 when the county auditor’s office paid a visit to the Moore House Museum’s doorstep.

Sipkovsky learned that property taxes hadn’t been paid on the property since 1994, so he sent a letter to Community Development Director Sandy Prudoff, asking him to determine the official status of the property.

The letter was sent in 1999. Prudoff’s response came back in September.

"(Prudoff) said the museum would be foreclosed on if the Black River Historical Society didn’t come up with $52,000 in taxes,” Sipkovsky said. “The city was supposed to file an exemption for the tax in 1994, and it was never done. We assumed that everything was taken care of. Fourteen years later, we found out it wasn’t.”

Prudoff couldn’t be reached for comment late Friday evening.

The museum, named on behalf of former property owner and Lorain Mayor Leonard Moore, houses pieces of Lorain history collected through the years. It had been leased to the non-profit society for $1 a year.

Lorain Law Director Mark Provenza said the city’s position is that the agreement the society signed made them responsible for paying all the taxes owed.

But Sipkovsky contends that the society’s nonprofit status exempts it from taxes — something he said was backed by the fact that it never saw or received a property tax bill.

The total owed includes unpaid amounts from 1994 to 1997, when the city still had the property. Since learning of the past-due bills, the city has paid that portion.

Sipkovsky, meanwhile, said the society has made a $5,700 payment to stop the building from being foreclosed. He said he’s hoping to get an exemption filed for the taxes for at least the last three years.

“We had to show the county that somebody was going to make some restitution,” he said. “But somebody in the city screwed up. If we would’ve gotten a tax bill, we would’ve paid it.”

The society intends to submit a moral claim to City Council seeking the repayment of funds from the city’s damages and claims account — an account already tapped out by road damage claims and settlements for lawsuits.

Auditor Ron Mantini said similar oversights with the Health Department and other buildings total more than $50,000, and the money eventually will have to come from the city’s budget. The Health Department budget is subsidized by the city’s general fund.

Mayor Tony Krasienko was optimistic that the city and the society could work out a way to make up the financial difference, and he pinned the blame on the previous administration.

“This is just another issue from the past, which wasn’t handled by the last administration, that we will resolve,” he said. “The Black River Historical Society informed the previous administration to the same issue. Why they didn’t do anything about it — lazy, incompetent, I don’t know.”

Contact Stephen Szucs at 329-7129 or sszucs@chroniclet.com.