COAL TOWNSHIP - Coal Township commissioners will likely table a vote on enacting an amusement tax after Tuesday's work session resulted in more questions than answers on the Anthracite Outdoor Adventure Area's (AOAA) business model and willingness to enter into a contract to make payments to the township.
Jim Backes, chairman of the AOAA authority, and David Porzi, the AOAA's operations director, presented Coal Township with a donation of $4,000 at the beginning of the meeting.
During the presentation, Backes emphasized the park's commitment to the local governments.
"We don't want to be a burden to the community," he said. "We appreciate the support."
Backes also told commissioners the park anticipated continuing to make donations of this type, with the amount increasing as the park grows.
"This is a yearly event," he said. "We're building into the budget this type of donation."
He added the park would prefer to continue making donations rather than have the amusement tax enacted, and pointed out that while a tax brings in a set amount, donations are limitless.
Backes also answered a few questions regarding the amount of riders and revenue the park received so far. He said approximately 6,000 riders had visited the AOAA for a total of approximately $125,000 in revenue.
Backes and Porzi left the meeting shortly after the check presentation. Commissioners then went into executive session, and when the meeting reopened, they began a lengthy discussion of zoning changes and then discussed the amusement tax.
Donation vs. tax
The biggest division between the commissioners is if it would be more profitable to tax the AOAA or to enter into a contract requiring the AOAA to make annual payments to the township.
In 2013, Reading Anthracite agreed to make a "donation" to Coal Township: $5,000 annually over five years. Two donations have been received so far.
At least one commissioner pointed out that it would have been helpful to ask Porzi and Backes if such an arrangement would be possible, as well as numerous other questions which arose during the discussion.
Commissioner Gene Welsh supported creating a similar donation plan with the AOAA. He said the AOAA will likely stop making donations if the amusement tax would be enacted.
Backes had confirmed this notion after Monday's AOAA work session.
"If they (Coal Township) would pass the tax then we would not be giving donations," he said.
Welsh pointed out that with only the tax income, the township would be limited to 5 percent of the AOAA's revenue. And, he said, other townships would likely follow suit and pass similar taxes, which would cut into Coal Township's share.
A legal maximum tax of this type is set at 10 percent, township solicitor Vincent Rovito said. Therefore, if two other townships pass amusement taxes totalling more than 10 percent, the AOAA would be taxed at 10 percent and each township would receive a percentage of that amount.
The AOAA has land in five townships.
"They gave us $4,700," said Welsh, adding to the tally a $700 donation the AOAA had given earlier in the year. "I don't want to see this money going away or be dropped down."
But Chairman Craig Fetterman said that a five-percent tax on the $125,000 comes to approximately $6,000.
"In my opinion, they're $2,000 short of where they should be," he said.
Revenue machine?
A major reasons for enacting the amusement tax when it was originally proposed was to offset the cost of emergency personnel. But Commissioner Bernie Rumberger noted the park used far fewer emergency resources than originally estimated.
"The emergency crew wasn't out there (often)," Rumberger said, adding that the park has been emphasizing safety with its riders. "I've been impressed."
Commissioner Paul Leshinskie said the money is needed regardless of the emergency personnel use.
"I'm looking at it as more of an extra revenue coming in," he said.
Leshinskie was concerned that without a contract in place, the AOAA would cease making payments in the future.
Fetterman said the township needs to get some money out of the AOAA, either as a tax or a regular payment.
"It's the only resource we have and if we don't get anything out of it, we're fools," he said.
Welsh was concerned that if the amusement tax is enacted, the AOAA will use one of the loopholes to avoid paying the tax.
The proposed amusement tax is written to exclude a swath of organizations, including nonprofits, government entities, schools and religious groups.
"Basically this is to tax the AOAA and specifically leave everyone else out," said Welsh after an initial reading of several segments of the tax.
Several commissioners debated over if the AOAA would become a nonprofit organization to avoid the tax.
Rovito said the AOAA's debt would make it ineligible to become a nonprofit.
The AOAA owes $10,000 to in its line of credit to Manufacturers and Traders Trust Company, also known as M&T Bank, but as of the end of October, had close to $70,000 in its fund.
Believing the AOAA has a negative net worth, Commissioner George Zalar questioned the park's business model.
"To give $6,000 to $7,000 - they have a $10,000 debt," he said. "That's the part I don't get."
Fetterman questioned the park's decision to raise rates for the 2015 season. He opined the park must not have correctly estimated income and expenditures for it to need to raise rates so soon.
If the township enacts the tax, Fetterman worries, "We're going to be the bad guys for their 20 percent bump."
Other segments of the amusement tax ordinance, including which organizations should be included in the tax, were also debated during the conversation, which lasted approximately 45 minutes. The discussion came to a close with several commissioners wishing to speak with representatives of the AOAA to see if both parties would agree to a payment system.