Background Information on Lawsuit
Manheim Township School District was served with a lawsuit by the locally elected Manheim Township Tax Collector, Mrs. Patricia Kabel, claiming that the district was not allowing her to collect district taxes. The district refutes these claims, and has made numerous attempts to work cooperatively with Mrs. Kabel to provide the best, most efficient and capable practice of collecting taxes for the citizens of Manheim Township. Since November 2013, when Mrs. Kabel was first elected the local tax collector, she did not seek to collect taxes for the Manheim Township School District. She has never communicated with the district regarding the process, method, or manner in which the school district collects taxes. School district records indicate that the school district has been collecting taxes internally with the cooperation of previously locally elected tax collectors, including now Representative Steve Mentzer, since at least 1985.
In an effort to meet and establish a positive relationship with Mrs. Kabel, the district’s newly hired Chief Operating Officer reached out to Mrs. Kabel on September 26, 2017 and again on November 2, 2017. Mrs. Kabel did not respond. Sadly, Mrs. Kabel chose to initiate a lawsuit that she did not provide to the district until well after the 2017 general election. Until the district was served with the lawsuit, the district was unaware that Mrs. Kabel wanted to collect school district taxes at a compensation rate higher than the rate that was previously established by the Board of School Directors. She did not protest, challenge, or make any effort whatsoever to communicate with the district as required by law to revise the tax collector compensation prior to initiating her lawsuit.
Below, you will find more information regarding the lawsuit, and the historical background of how the district has collected taxes for our residents. It is our continued goal to keep our community informed on this process and how it may affect our taxpayers.
Update: December 12, 2019
Dr. Felty provided the following Superintendent’s Report during the December 12th School Board of Directors Meeting
For my report this evening, I would like to provide an update on the lawsuit filed against our school district by the locally elected tax collector, Mrs. Patricia Kabel. Specifically, this report will offer an update on the status of our district’s Appeal to the Pennsylvania Commonwealth Court.
As noted in our last update, we appealed certain aspects of Judge Ashworth’s “Findings of Fact, Conclusions of Law and Decision” and Order to the Pennsylvania Commonwealth Court. The Commonwealth Court has accepted the District’s appeal, and has set a briefing schedule that involves specific dates in December, January, and February.
After all of the briefs are filed, the Commonwealth Court will schedule oral argument. Given the Court’s argument schedule for 2020, argument most likely will be held in either April or September of 2020. After argument is held, the Court will render a decision and a written opinion explaining whatever decision is reached. Typically, it takes a few months after argument for a decision to be rendered by an appeals court.
As we explained in our last update, because Mrs. Kabel remains enjoined from collecting the tax and because Judge Ashworth’s rulings do not take effect unless and until affirmed by the appeals courts, the District will continue collecting its real estate tax until further notice using the automated, cost-effective, and error-proof lockbox system that has saved the District’s taxpayers money for decades.
The District remains confident in the arguments it has raised and optimistic about the final outcome of these matters. It is important to note that many of the issues and legal arguments on appeal are questions of first impression that have not been decided by the appeals courts. Accordingly, the appeals courts are not required to defer in any way to Judge Ashworth’s rulings, and we remain confident that the appeals courts will give the District’s arguments the time and consideration those arguments deserve.
In addition to pursuing the appeals process, the District also plans to collaborate with legislators and statewide lobbying organizations to bring much needed positive change to Pennsylvania’s outdated tax collection laws. The reality is that almost all bills these days, from utility bills to other local tax bills, are paid via mail or online to an automated collection point or lockbox system. Real estate tax should be no different. There is no need for or benefit to having an individual manually collect taxes. We will continue striving to save our taxpayers from the undue financial burden of having to compensate and pay other expenses for the elected tax collector to manually collect taxes, instead of using a modern system similar to the ones used for virtually every type of bill payment.
We will continue to keep the community apprised of important developments in Mrs. Kabel’s lawsuit against the district, and we continue to thank the community for its ongoing and unwavering support.
Update: August 5, 2019
Judge Issues “Findings of Fact, Conclusions of Law and Decision” in Tax Collector Lawsuit
We realize this update is detailed, but we want to ensure our community has the important information regarding the recent ruling by Judge Ashworth on the lawsuit filed against the Manheim Township School District by the locally elected tax collector, Mrs. Patricia Kabel. On Friday, July 26, 2019, the District learned that Judge Ashworth issued a “Findings of Fact, Conclusions of Law and Decision” and an Order regarding the lawsuit that Mrs. Kabel brought against the District.
By way of review, in April of 2019, Judge Ashworth held a hearing to receive testimony and evidence regarding some of the issues in Mrs. Kabel’s lawsuit. Specifically, at the hearing, the primary focus was on whether various provisions of the District’s “Resolution Establishing Policies and Procedures for Elected Tax Collectors” are invalid. After the Hearing, Judge Ashworth asked the parties to file additional supplemental briefs addressing a number of legal issues, many of which have never been squarely decided by the Courts. At that time, it was not clear whether Judge Ashworth intended to rule on portions of Mrs. Kabel’s lawsuit in the near future, hold additional evidentiary hearings before issuing a ruling, or hold oral arguments before issuing a ruling.
The District is surprised and extremely disappointed in Judge Ashworth’s most recent ruling, particularly because he did not address numerous legal arguments the District raised. Furthermore, despite the Judge’s ruling, Mrs. Kabel is still forbidden to collect taxes because of her inability to obtain the required bond.
For the benefit of our community, below is a summary of Judge Ashworth’s key conclusions and where things stand as of right now:
- Perhaps the District’s biggest disappointment for the residents of the Manheim Township community is Judge Ashworth’s conclusion that:
“Ms. Kabel’s filing of her complaint on the eve of her re-election as tax collector, as opposed to doing so further in advance, deprived the electorate of the opportunity to make an informed decision as to whether it wished to retain Ms. Kabel as the elected tax collector in light of her challenge to the compensation rate.”
Nevertheless, the Judge felt he was “constrained” by precedent to rule that Mrs. Kabel has standing to sue the District.
- The Judge ruled that the compensation rate for elected tax collectors that was adopted by the Board in 1997 is null and void because the Board did not follow “proper procedure” at that time in adopting the rate.
- The Judge ruled that the Board must set a new “reasonable rate of compensation”, but it appears that rate will not take effect until January of 2022 – the next term of the tax collector office. Any increase to the compensation rate may have significant budget implications for the school district and the taxpayers of Manheim Township.
- The Judge ruled that the customer service and tax certification functions are “split” between the District and the elected tax collector. Ultimately, however, the District cannot “prohibit” the collector from providing customer service (ex. answering phone calls or responding to questions from community members) or issuing certain certifications if a taxpayer requests that the collector do so. Notably, if Mrs. Kabel subsequently sues the District over the right to retain certification fees and wins, that could eliminate a revenue stream that has generated approximately $186,840 for the District over the past 5 years.
- Kabel still has no bond that covers the collection of District tax, and continues to be forbidden from collecting the school real estate tax.
Ultimately, Judge Ashworth’s ruling requires the District to choose between two options. The first option is to let Mrs. Kabel state what she wants to be paid, to begin paying her that rate effective immediately (although she is currently unable to legally collect taxes), and to comply with Mrs. Kabel’s other demands. The second option is to appeal certain aspects of the Judge’s decision that are unfavorable to the District.
The first option presents a number of problems.
- First, the District is deeply concerned about sanctioning and rewarding the behavior of an individual who Judge Ashworth found has “deprived the electorate of the opportunity to make an informed decision.”
- Second, the District continues to be of the position that it would be unconstitutional and illegal for it to set a new compensation rate that takes effect during Mrs. Kabel’s current term of office. Furthermore, as noted earlier, Mrs. Kabel is not legally permitted to collect taxes without a bond.
- Third, giving Mrs. Kabel what she wants will come with a staggering price tag that dwarfs the cost of any appeal. For example, in addition to an unwarranted compensation increase and other costs, Mrs. Kabel intends to renew a challenge to the requirement that she remit tax receipts to the District on a daily basis. Should Mrs. Kabel successfully challenge that provision or refuse to abide by it, the District would lose thousands of dollars in interest earnings each day.
The District is highly-sensitive to the litigation costs an appeal will bring. However, in order to “stay” Judge Ashworth’s Order, to avoid taxpayer confusion, and to protect taxpayers’ interests, the District has filed a notice of appeal and is in the process of preparing a motion to clarify the record. If the District later decides it does not wish to pursue the appeal, it may withdraw the appeal.
Accordingly, with the injunction against Mrs. Kabel still in place and an appeal having been filed, the District will continue collecting its real estate tax until further notice using the highly cost-effective automated lockbox system that has been in place for decades.
The District remains confident in the arguments it has raised and optimistic about the final outcome of these matters. Many of the issues and legal arguments that will be raised on appeal are questions that Judge Ashworth’s decision does not adequately address. Appealing this case will give the appellate courts the opportunity to clarify how the law applies to a new set of circumstances and to issue that clarification on a “blank slate.”
In addition to appealing, the District intends to take the following additional steps:
- Consistent with the Judge’s concern that the electorate be provided with the opportunity to make an informed decision in future elections, the District is initiating an open process for setting a tax collector compensation rate consistent with the law, local norms, and taxpayer expectations. In accordance with the Pennsylvania Constitution, state statute, and the Judge’s Order, that rate will be adopted on or before February 15, 2021 and will take effect January 1, 2022.
- In order to protect taxpayers, the District is also planning to collaborate with legislators and statewide lobbying organizations to bring much needed positive change to Pennsylvania’s outdated tax collection laws. We must strive to save our taxpayers from the undue financial burden of having to compensate and pay other expenses for a middle-level agent (the elected tax collector) to manually collect taxes, instead of using an automated cost-effective lockbox system. The District has used this automated approach as a cost savings tool for over 30 years, and would like to continue to do so.
We will continue to keep the community apprised of important developments in the litigations between the District and Mrs. Kabel, and we continue to thank the community for its ongoing and unwavering support.
Update: June 20, 2019
Dr. Felty provided the following Superintendent Report at the June 20th School Board of Directors Meeting
Next Steps in the Tax Collector’s Lawsuits
On April 26, 2019, the Court held a hearing to receive testimony and evidence regarding some of the threshold issues in Mrs. Kabel’s lawsuits. Specifically, at the hearing, a primary focus was on whether various provisions of the District’s “Resolution Establishing Policies and Procedures for Elected Tax Collectors” are invalid. The District was very pleased with the evidence it introduced at the hearing, as well as the testimony it offered and was able to elicit at the hearing.
At the conclusion of the April 26 hearing, the Court asked the parties to file supplemental briefs addressing a number of legal issues, many of which are issues that have never been squarely decided by the Courts. In addition, after the hearing, the Court asked the parties to file proposed findings of fact and conclusions of law. At this time, it is not clear whether the Court intends to rule on portions of Mrs. Kabel’s lawsuits in the near future, hold additional evidentiary hearings before issuing a ruling, or hold oral argument before issuing a ruling.
At this point, Mrs. Kabel has given the District no indication that she is attempting to obtain a bond that will guarantee and secure her collection of the District’s tax. She has also challenged many of the fundamental procedures the District has in place to ensure the tax collection process remains efficient, cost-effective, and transparent. Therefore, Mrs. Kabel simply cannot collect the District’s tax. Thus, the District has no choice but to continue vigorously defending against Mrs. Kabel’s lawsuits.
On May 31, 2019, Mrs. Kabel filed her supplemental brief, proposed findings of fact, and proposed conclusions of law. The arguments Mrs. Kabel raised in those filings are similar to arguments she has raised in the past, so there were no surprises. The District’s brief, proposed findings of fact, and proposed conclusions of law are due on June 24, 2019. The District remains confident in the arguments it is advancing and remains optimistic about the final outcome of these matters.
We will continue to keep the community apprised of important developments in the litigations between the District and Mrs. Kabel, and thank the community for its ongoing and unwavering support.
Update: April 18, 2019
Dr. Felty provided the following Superintendent Report at the April 18th School Board of Directors Meeting
Upcoming Hearing on Various Issues Relating to the Tax Collector’s Lawsuits
On March 29, 2019, the Court ruled that Mrs. Kabel has legal standing to bring her lawsuits against the District. The Court’s ruling in that regard has nothing to do with the merits or substance of Mrs. Kabel’s lawsuits. Rather, the ruling addresses the very preliminary issue of whether Mrs. Kabel even has a legal right to prosecute her lawsuits in the first place. Although the District is disappointed with the Court’s ruling that Mrs. Kabel does have that right, the District respects the ruling and is fully prepared to proceed.
The Court has scheduled a hearing for later this month. At that hearing, the following issues will be litigated. First, the Court will consider whether Mrs. Kable has raised a viable claim (or “cause of action”) in either one of her lawsuits. If the answer is “no,” then Mrs. Kabel’s lawsuits cannot proceed. Second, the Court will consider whether certain rules and procedures that the District has established for elected tax collectors are valid and enforceable. Third, the Court will consider certain preliminary issues associated with Mrs. Kabel’s request that the District raise the compensation rate for elected tax collectors – including constitutional challenges the District has raised. At the April 26 hearing, the Court does not plan to address the issues of whether the compensation rate for elected tax collectors should be changed. The litigations have not proceeded to that stage yet, and may or may not ever get to that stage.
Despite the Court’s decision granting Mrs. Kabel’s standing, the District remains confident in the arguments it is advancing and remains optimistic about the final outcome of these matters.
We will continue to keep the community apprised of important developments in the litigations between the District and Mrs. Kabel, and thank the community for its ongoing and steadfast support.
Update: March 22, 2019
Dr. Felty provided the following Superintendent Report at the March 21st School Board of Directors Meeting
Oral Argument on District’s Motion to End Tax Collector’s Lawsuits
As shared during last month’s Board Meeting, the Court scheduled oral argument for the local tax collector’s (Mrs. Patricia Kabel) lawsuit against our District on March 13, 2019, with the anticipation of issuing a ruling on our pending motion to end Mrs. Kabel’s lawsuits against us. To date, the Court has issued two rulings in this case – the first forbidding Mrs. Kabel from collecting taxes, and the second holding that the District’s lawsuit for damages against Mrs. Kabel will proceed. We anticipate a Court decision in the near future and feel confident in the Court’s continued handling of the litigations, that we have raised compelling arguments in favor of the motion to end Mrs. Kabel’s lawsuits, and we remain optimistic about the final outcome of these matters.
Immediately following the closed-door oral argument on March 13, a newspaper reporter requested comment from both parties. Given that the Judge held a non-public oral argument in Chambers, the District’s Superintendent, COO, and legal counsel did not feel it was appropriate to comment to the newspaper about what was discussed during oral argument, perceptions of that discussion, or perceptions of the Judge’s understanding or timetable for issuing a ruling. We are aware that Mrs. Kabel’s legal counsel offered comment to the newspapers – which is obviously his prerogative. The Court’s forthcoming ruling will either end Mrs. Kabel’s lawsuits or, alternatively, will result in further hearings during which time the District will be permitted to introduce even more evidence that sheds light on Mrs. Kabel’s behavior. Either way, the District looks forward to bringing these matters to a swift and successful resolution.
Also, on a related note, we are very pleased to find increasing support for Senate Bill 82, which holds implications that would significantly assist local school districts in applying cost savings measures to the collection of real estate taxes. As a review, Senate Bill 82 will give third class counties, and municipalities and school districts in third class counties, more flexibility to use reliable, efficient alternatives for property tax collection. It provides options to our property tax collection system. If school districts believe they can collect property taxes more efficiently and effectively, they have the ability to move forward with this option. The third class counties include Berks, Chester, Cumberland, Dauphin, Erie, Lackawanna, Lancaster, Lehigh, Luzerne, Northampton, Westmoreland, and York.
The Senate Bill 82 is supported by Senator Scott Martin, Senator Ryan Aument, Representative Bryan Cutler, and our local Representative Steve Mentzer. In response to a letter we sent Representative Mentzer earlier this month seeking support for Senate Bill 82, we received a written letter this week from him (see letter) offering support of the Bill. He is also co-sponsoring House Bill 793, which was introduced by Representative Keith Greiner and is now before the House Finance Committee. The House Bill 793 recommends the amending of the Local Tax Collection Law (adopted in 1945) to allow for optional alternative tax collection agreements. This proposed legislation provides municipalities who are satisfied with their alternative tax collection methods the option of eliminating the office of the tax collector. Therefore, at this time, both Chambers of the General Assembly are attuned with this issue.
We will continue to keep the community apprised of important developments in the litigations between the District and Mrs. Kabel, and thank the community for its ongoing and steadfast support.
Update: February 15, 2019
Dr. Felty provided the following Superintendent Report at the February 14th School Board of Directors Work Session
Court Rules the District’s Lawsuit Against Elected Tax Collector Will Proceed
On August 30, 2018, the District filed a lawsuit against Patricia J. Kabel. By way of relevant background, Mrs. Kabel repeatedly promised to furnish the bond she is required by statute to obtain to collect the District’s real estate tax. Mrs. Kabel also demanded that the District shut down the highly-efficient, automated, real estate tax lockbox system that had been in place for decades. However, Mrs. Kabel then failed to obtain the statutorily-required bond. As a consequence of Mrs. Kabel’s insistence that the lockbox be shut down and her dereliction of duty, the District has incurred substantial financial damage. Specifically, the District incurred the cost of hiring additional staff to manually process real estate tax bills, lost interest and investment earnings due to slower processing times and other factors, and incurred the legal expense associated with obtaining a Court order enjoining Mrs. Kabel from collecting the District’s real estate tax.
On October 9, 2018, Mrs. Kabel filed papers arguing that the District’s lawsuit against her was invalid and should be thrown out. The District is pleased to report that the Court rejected Mrs. Kabel’s argument. Specifically, on February 11, 2019, the Court ruled the District’s lawsuit shall proceed and that Mrs. Kabel must file an answer to the lawsuit within 20 days.
Obviously, the District is pleased with the Court’s ruling and looks forward to prosecuting its lawsuit against Mrs. Kabel and obtaining compensation for the damage Mrs. Kabel has unnecessarily and improperly caused. Notably, the public record is very clear that Mrs. Kabel demanded that the District shut down the lockbox, that Mrs. Kabel repeatedly promised the District she would obtain the required bond in a timely fashion (even going so far as to stipulate to a Court Order to that effect), and that Mrs. Kabel failed to obtain the bond. Thus, from the District’s perspective, the only issue of fact that needs to be proven in Court is the amount of damage the District has incurred.
As for Mrs. Kabel’s lawsuits against the District, the District’s Motion for Summary Judgment seeking termination of those lawsuits in the District’s favor remains pending. The District remains very optimistic about the Motion, and is awaiting either an oral argument scheduling notice from the Court or a ruling on the Motion. As the District argues in the Motion, Mrs. Kabel does not have standing to sue the District and has not raised a viable theory of liability against the District.
We will continue to keep the community apprised of important developments in the litigations between the District and Mrs. Kabel, and thank the community for its ongoing and steadfast support.
Update: January 17, 2019
Dr. Felty provided the following Superintendent Report at the January 17th School Board of Directors Meeting
It has been several months since I provided an update regarding the status of the lawsuits filed against us by the local tax collector, Mrs. Patricia Kabel. As you know, I’ve given monthly updates for quite a few months in order to keep all of you and our community informed about this unnecessary waste of money. All of those updates are listed on our main district website.
At this time, we are still waiting for a date to provide Oral Arguments in the case. We are optimistic that the Court will be favorable to our stance, and remain hopeful that Mrs. Kabel’s lawsuit will be dismissed.
We are thankful for the ongoing support of our MT community. People still ask for updates on Mrs. Kabel’s lawsuit, and share our frustration with her desire to keep fighting and wasting taxpayer money. Our Chief Operating Officer, Mrs. Donna Robbins, has been instrumental in helping navigate our district through the negative financial impact of Mrs. Kabel’s lawsuits. Her recently published article in the PASBO Report, titled, “15,069,” (which references the 15,069 tax bills we were forced to manually process at the date of the article) offers an excellent summary of this legal situation and the need for elected School Boards to have the ability to choose the most cost effective, efficient manner for collecting real estate taxes. Senate Bill 1099 would allow this cost savings to occur for taxpayers and school districts. We have several copies of Mrs. Robbins article on the back table for your review.
I hope that my next update about the lawsuit will offer positive news regarding a date for Oral Arguments, or possible dismissal of the lawsuit.
Update: October 18, 2018
Dr. Felty provided the following Superintendent Report at the October 18th School Board of Directors Meeting
Thank you. My one item this evening provides an update on the status of the lawsuits filed against the MTSD by the local tax collector.
I will first provide a summary of the status of Patricia Kabel’s lawsuits against our District as of the start of this current school year. On August 28, 2018, the Court consolidated Patricia Kabel’s two lawsuits against the District into one suit. Immediately after the Court consolidated Mrs. Kabel’s lawsuits, the District filed a Motion for Summary Judgment seeking judgment in the District’s favor on all counts raised by her in the consolidated lawsuit. The District’s Motion has been fully briefed, and we are now awaiting an order from the Court scheduling an oral argument on the Motion. We believe that the oral argument might not occur for several months.
Today, the District filed its answer to Mrs. Kabel’s preliminary objections to the civil complaint we filed against her. As you know, we have incurred significant financial loss due to her lawsuits against us, and are hoping to recoup lost funds through the complaint.
- Due to Mrs. Kabel’s insistence that the lockbox be shut down and that tax payments be made out to her, the District has been forced to pay overtime to employees and hire additional temporary employees to assist with the workload involved in manually endorsing and processing tax payments. As of today, the district has manually processed 8,336 tax bills. In addition, the processing of 5,544 bills paid via escrow companies was delayed. These payments total over $57million dollars of tax revenue.
- As a consequence to being unable to deposit tax payments as quickly due to manually processing tax bills, the District has lost substantial interest and investment earnings on tax funds due to delayed deposits.
- As shared publicly in August, the School District has also incurred substantial legal fees defending against the two lawsuits.
The monetary damages resulting from Mrs. Kabel’s unnecessary lawsuits are adversely impacting the District’s operating budget and could have been avoided entirely if Mrs. Kabel would have responded to any of the District’s attempts to reach out to her and work with the District in good faith.
We continue to be grateful to our local community and taxpayers for their ongoing support, and remain hopeful that Mrs. Kabel will drop her unnecessary lawsuits against us.
Update: August 30, 2018
RE: MT School District Files Complaint and Civil Suit
On Monday, July 2nd, the School District was informed that Mrs. Kabel applied for but failed to obtain the necessary surety bond required by The Local Tax Collection Law to qualify to collect the District’s real estate taxes. By law, tax collectors must acquire a bond to protect against loss and misappropriation of tax revenues. This situation was entirely out of the District’s control. In fact, Mrs. Kabel had previously stipulated to a Court Order promising to provide the bond by June 11, 2018 and had repeatedly assured the District that obtaining the bond would not be a problem.
In order for our community members to be able to pay their School District real estate tax bills, the District had to obtain an emergency injunction compelling Mrs. Kabel to comply with a process that was put in place by the District to ensure taxpayers could pay their taxes at the District’s Administrative Offices on Candlewyck Road. As explained in more detail below, implementing that process has put a substantial strain on the School District’s Business Department.
For decades, the School District processed tax bills electronically through an automated lockbox system. However, because Mrs. Kabel demanded that the District shut down the lockbox and that the lockbox no longer be used, all tax payments must now be manually processed by the School District’s Business Department.
The inconvenience and monetary damage to the School District, and more importantly the effect on our taxpayers, could have easily been avoided had Mrs. Kabel merely communicated with the School District when the District reached out to her on three different occasions during the Summer and Fall of 2017 to discuss tax collection alternatives. Although the lockbox collection system is by far the most effective and efficient method of tax collection, the District never contested Mrs. Kabel’s right to collect the taxes in accordance with applicable law. While the District was hoping to have a frank discussion with Mrs. Kabel about collection alternatives, she decided that ignoring and then suing the District was the best choice.
Due to the financial damage that Mrs. Kabel has inflicted on the School District, the District has filed a civil complaint against Mrs. Kabel in the Lancaster County Court of Common Pleas seeking compensation from Mrs. Kabel for all damages incurred by the District. Specifically, as explained in the District’s complaint, the District has incurred the following damages as a result of Mrs. Kabel’s actions:
- Due to Mrs. Kabel’s insistence that the lockbox be shut down, the District has been forced to pay overtime to employees and hire additional temporary employees to assist with the workload involved in manually processing tax bills and tax payments.
- Due to Mrs. Kabel’s insistence that tax payment checks be made payable to her, the District received a number of checks that it could not deposit without Mrs. Kabel’s endorsement. Due to the associated delay in obtaining those endorsements, the District lost substantial interest and investment earnings on tax funds it would have otherwise been able to deposit immediately.
- Due to the delay in having to manually process each and every tax payment, the District has been unable to process and deposit tax payments as quickly as payments would have been deposited via the lockbox system. As a consequence, the District has lost substantial interest and investment earnings on tax funds due to delayed deposits.
- Due to Mrs. Kabel’s failure to obtain a bond after repeatedly and inaccurately assuring that she would do so, and her failure to voluntarily cooperate with reasonable steps to transition tax collections back to the District’s Administrative Office, the District was forced to incur the legal expense associated with drafting, filing, and obtaining the emergency injunction discussed above.
In addition, the School District has incurred substantial legal fees defending against the two lawsuits that Mrs. Kabel has filed against the District. The monetary damages resulting from Mrs. Kabel’s unnecessary lawsuits are adversely impacting the District’s operating budget and could have been avoided entirely if Mrs. Kabel would have responded to any of the District’s attempts to reach out to her and would have worked with the District in good faith.
The School District remains deeply disappointed that Mrs. Kabel unnecessarily caused confusion among our residents, and has caused financial loss to both the District and the taxpayers in the process. We continue to receive support from our community and remain hopeful that Mrs. Kabel eventually drops these unnecessary lawsuits. However, Mrs. Kabel and her legal counsel have confirmed they have no intent of doing so, and the District has therefore filed a comprehensive motion seeking judgment in the District’s favor in both suits.
We sincerely appreciate our taxpayer’s patience and cooperation.
Update July 3, 2018
Confusion among taxpayers occurred yesterday, July 2, when many Manheim Township residents went to the municipal office to pay their real estate taxes as outlined on their tax bill. Upon arrival they were unable to pay their taxes to the local elected tax collector, Mrs. Patricia Kabel, since she did not have the appropriate bonding.
The Local Tax Collection Law requires Mrs. Kabel to be bonded in order to collect the School District’s real estate taxes. The bonding requirement acts as insurance policy to protect the over $60 million in District tax revenues annually.
Before the Judge, Mrs. Kabel agreed she would provide the bond on or before June 11, 2018. Per that agreement, the Court entered a binding Order requiring that Mrs. Kabel meet the June 11, 2018 bonding deadline.
This past Friday, June 29, 2018, the District was notified that Mrs. Kabel is unable to obtain the necessary bond to collect the District’s real estate taxes. At no time prior to this past Friday did Mrs. Kabel give any indication whatsoever that she would have difficulty obtaining the required bond. To the contrary, she repeatedly indicated she would have no difficulty, particularly given she is bonded for the collection of County and Township real estate taxes.
The law is clear that Mrs. Kabel is prohibited from collecting the District’s tax due to her failure to obtain the statutorily-required bond. On Monday, July 2, 2018, the District obtained emergency injunctive relief. Unless Mrs. Kabel is able to produce a bond, the injunction remains in effect. Patricia is forbidden by court order from accepting any tax payments for the school district. As a result, the district has taken over collections.
In order for our community to pay their school district real estate tax bill, effective immediately, all School District Real Estate tax payments must be taken to the Manheim Township Administrative Offices or mailed to the MTSD Tax Office, P.O. Box 5386, Lancaster, PA, 17606. Real estate tax payments should be payable to the Manheim Township School District. While it is preferred that payments be made out to the MTSD, checks made payable to Patricia Kabel will be honored. Please note, this situation is out of the district’s control as Mrs. Kabel did not obtain the statutorily-mandated bond in order to qualify to collect the District taxes. It is our goal to make this disappointing situation as convenient as possible for our taxpayers.
The district continues to be disappointed that Mrs. Kabel unnecessarily caused confusion, yet again, among our residents. We continue to receive support from our community and remain hopeful that Mrs. Kabel drops the two lawsuits that remain outstanding.
We sincerely appreciate our taxpayer’s patience and cooperation.
Update June 21, 2018
It has been almost a month since our last update to the community on the lawsuit filed against the school district by the local elected tax collector, Mrs. Patricia Kabel. Unfortunately, we just found out on Tuesday that Mrs. Kabel has launched yet another lawsuit against us. This now makes two separate lawsuits.
On Friday, June 15th, Mrs. Kabel and her attorney filed an additional lawsuit against the district stating that the District’s Resolution Establishing Policies and Procedures for Elected Tax Collectors was interfering with her ability to perform her duties. The lawsuit claims that she “will continue to suffer irreparable injury in the form of the loss of rights and privileges of the office, and the freedom to fulfill her statutory obligations, in the absence of the requested injunction.” The district was not made aware of this new lawsuit until contacted by LNP Tuesday (June 19) afternoon.
The district’s Resolution, which was approved by the School Board in May, follows the standard guidelines permitted under The Local Tax Collection Law. We did not include any policies or procedures in the process that are illegal, difficult, or unusual; in fact, these are the same procedures currently followed by the school district and throughout the state of Pennsylvania. For example, the school district deposits funds the same day they are received in order to maximize interest earnings. Our elected tax collector should be required to do the same in order to preserve the interest revenue. However, Mrs. Kabel’s lawsuit disputes the district’s right to transfer tax collection funds out of her account on a daily basis, in order to invest the funds at the highest interest rates possible.
In the newly filed lawsuit, Mrs. Kabel is also seeking the right to issue tax certifications — which confirm that tax bills have been paid — and keep the fees generated from issuing those certifications. The school district currently receives about $40,000 a year in certification fees.
Unfortunately, if Mrs. Kabel is successful in her quest to invalidate the requirement that she pay over tax receipts to the district each day and in her quest to retain tax certification fees, the district could lose many tens of thousands of dollars each year from just those two changes alone. And, that does not account for any increased base compensation the district might have to pay Mrs. Kabel, additional bonding costs, and other related expenses.
It is important to note that the District provided Mrs. Kabel and her attorney with an opportunity to provide feedback about the Resolution at least two weeks before the Board was scheduled to adopt it. The District provided Mrs. Kabel and her attorney with an advanced copy of the Resolution (the standard tax collection guidelines) on May 2, 2018. However, neither Mrs. Kabel nor her attorney expressed any reservations about the Resolution before the Board approved it. In fact, just like in prior circumstances when the district has initiated communication with Mrs. Kabel, she once again never responded to the district with her thoughts or feedback on the Resolution.
Unfortunately, for the community of Manheim Township, it seems as if this is yet another way Mrs. Kabel is proving that she is more intent on increasing her income than caring about the taxpayers of Manheim Township. Indeed, The Local Tax Collection Law does not give elected tax collectors, who are intermediaries between taxpayers and the taxing authority ultimately entitled to the tax revenues, the right to issue tax certifications, and prohibiting Mrs. Kabel from doing so has no impact whatsoever on her ability to collect bills, record payments, and deposit checks. Yet, Mrs. Kabel is now demanding that she be given the right to issue tax certifications – and to pocket the $40,000 a year in fees generated by those certifications.
Due to this new lawsuit, the district will be required to file a legal pleading with the Court. However, the district hopes to consolidate Mrs. Kabel’s two lawsuits into one lawsuit to minimize the expense of the litigation process.
The district continues to be disappointed that Mrs. Kabel unnecessarily keeps expanding the scope of the litigation by raising new issues. The School District continues to receive support from the community and are very appreciative. We will continue to update the community as this matter continues to unfold.
Update May 31, 2018
Re: May 30, 2018 Court Hearing
Yesterday, the Court scheduled an emergency hearing to address Mrs. Patricia Kabel’s lawsuit against the District, her claim that the District has “deprived her” of “her right to collect taxes,” and her demand for a raise. The District was well prepared for the hearing, and was ready to litigate with the goal of protecting Manheim Township taxpayers by ensuring the compensation rate and procedures for tax collection that have been in place for at least thirty years remained in place.
Surprisingly, when Mrs. Kabel appeared at the hearing, she indicated she now also intends to challenge the District’s Resolution Establishing Policies and Procedures for Elected Tax Collectors. Notably though, Mrs. Kabel had jointly requested yesterday’s emergency hearing with the District. In any event, among other things, the District’s understanding is that Mrs. Kabel will be demanding the right to issue tax certifications and to keep the fees generated from issuing those certifications, in addition to any compensation she otherwise receives as tax collector.
The District provided Mrs. Kabel with an advance copy of the Resolution Establishing Policies and Procedures for Elected Tax Collectors on May 2, 2018, over two weeks before the Board adopted the Resolution. However, Mrs. Kabel did not express any reservations about the Resolution before the Board adopted it – save for the tax certification issue alluded to above. A copy of the May 17th Board-approved Resolution can be found here. Ultimately, the District is confident that it has the right to retain the authority to issue tax certifications.
Given Mrs. Kabel’s change in litigation tactics, the Court and both parties agreed to address both Mrs. Kabel’s pending compensation challenge and her challenge to the Resolution in a consolidated proceeding that will occur sometime later this year. The only other alternative would have been for Mrs. Kabel to file a separate litigation challenging the Resolution, which would have forced the District to defend two separate lawsuits in a piecemeal fashion.
Naturally, we are disappointed that Mrs. Kabel has now decided to expand the scope of the litigation by raising new issues at the very last moment. Again, Mrs. Kabel jointly requested yesterday’s emergency hearing and did not file a challenge to the District’s Resolution before the hearing. However, the District unfortunately has no control over what choices Mrs. Kabel makes.
In the meantime, if Mrs. Kabel wants to collect the District’s real estate tax, she may do so. The Court has no jurisdiction to remove an elected official from office. Hence, neither the District nor the Court have any legal authority to stop Mrs. Kabel from collecting the tax at this time.
Very importantly though, if Mrs. Kabel decides to collect the District’s real estate tax, she must comply with the following conditions:
- She will be paid at the current compensation rate set by the District, unless and until she successfully challenges that rate in Court.
- She must fully comply with the Resolution Establishing Policies and Procedures for Elected Tax Collectors, unless and until she successfully challenges the Resolution in Court.
Those conditions ensure that the impact on the District’s taxpayers will be minimized unless and until Mrs. Kabel convinces the Court to order the District to give her a raise or to overrule the District’s Resolution so that she can keep the fees generated from tax certifications. Those are the two remaining and primary issues that the District is currently aware of and that will need to be resolved in future litigation. In short, the litigation moving forward will be focused on compensation issues.
The School District continues to be thankful for the community support. Of course, we will continue to update the community as this matter continues to unfold.
Update May 17, 2018
It has been almost a month since our last update to the community on the lawsuit filed against the school district by the local elected tax collector, Mrs. Patricia Kabel. We continue to receive support from the Community and are very appreciative. We know there is a community petition with over 350 signatures at this time, asking for Mrs. Kabel to end the lawsuit.
Unfortunately, the lawsuit has not been dropped. On Wednesday, May 2, our attorney sent Mrs. Kabel’s attorney a draft of the Manheim Township School Board of Directors resolution to establish policies and procedures for the school district tax collector, which was approved by the school board this evening. Furthermore, since the tax year is quickly approaching, the district had no choice but to file a Motion seeking expedited case management and an emergency hearing. On Tuesday, May 15, the district appeared in a deposition where information was gathered that will be provided at the hearing. We continue to be disappointed and frustrated with the refusal to drop the lawsuit which is costing the district considerable time and money.
A court hearing has been set for Wednesday, May 30. This is a closed hearing; however, members of the district administration team will be present with the continued goal of protecting our taxpayers and the school district. As this legal process continues to unfold, the district will continue to update our community when it is legally appropriate.
Update April 25, 2018
In the April 25th edition of LNP morning newspaper (Lancaster Newspapers), Education Reporter Alex Geli published an article on the most recent developments with Manheim Township School District’s lawsuit with the locally elected tax collector, Mrs. Patricia Kabel.
In addition, Mr. Geli also published an informational article regarding Senator Scott Martin’s recently introduced co-sponsored legislation to allow school districts to collect their own taxes. The other legislators include Senator Scott Wagner, Senator Ryan Aument, Senator Bob Mensch, and Senator Guy Reschenthaler. Under this legislation (Senate Bill 1099) Pennsylvania counties, municipalities, and school districts would be allowed to collect their own property taxes, instead of using a process of collecting taxes through a local tax collector. Manheim Township School District is extremely thankful and appreciative of Senator Martin’s bill and his recognition of the significant cost savings to taxpayers when districts collect their own taxes. The Manheim Township School Board of Directors plan to pass a resolution supporting the bill in May.
In addition, a community member recently reached out to the school district with the context of showing support of and affirming previous tax collectors’ collaboration with the school district to continue to allow the district to collect taxes. When State Representative Steven Mentzer was elected to his current position as State Representative of the 97th District, Mr. Jerry Tueche was appointed by the Manheim Township Commissioners to fill the unexpired term of Mr. Mentzer. Mr. Tueche was formally appointed in November 2012 and continued for one year as the Manheim Township Tax Collector with the intent to not seek re-election. (Meeting Minutes from the Monday, November 12, 2012 Manheim Township Commissioners Meeting). During his one-year tenure, he followed the same process of previous collectors and remained committed to working with the school district to allow the district to collect taxes and save Manheim Township taxpayers money. In November 2013, Mrs. Kabel was elected as tax collector and began her first term in January 2014.
Update April 19, 2018
Dear Manheim Township Community:
We would like to take this opportunity to provide an update on the lawsuit filed against the School District by the local tax collector, Mrs. Patricia Kabel. You’ll recall that Mrs. Kabel chose not to collect any tax or do any work for the School District during her initial four year term from 2014 through 2017, but then filed a lawsuit on the eve of the election last November demanding she be given a raise when she does decide she wants to begin working at some point later this year.
We have been in communication with Mrs. Kabel and her attorney. Although we cannot offer specific details about those communications, it is clear that Mrs. Kabel refuses to deputize the School District to collect its own taxes. Her lawsuit seeks to enable her to control the collection of real estate taxes, but more importantly to increase her compensation for that task – even though she has never actually collected taxes for the District.
In our ongoing efforts to protect the fiscally sound practice of tax collection that has been in place for the past 30+ years, we continue to receive inquiries and comments in support of the School District and its position. We recently learned that members of our community have started a petition to dissuade Mrs. Kabel from prosecuting her lawsuit against the District. As of this date, there are 184 people who have signed the petition. We are listening to our community, and we greatly appreciate their point of view.
In support of our community, Senators Scott Martin, Ryan Aument, Scott Wagner, and others have introduced Senate Bill 1099, which would give school districts and municipalities the flexibility to identify and select the most reliable and efficient alternative for property tax collection. In other words, Senate Bill 1099 would provide for local control and choice by permitting communities to decide the most effective and efficient method for the collection of its local real estate taxes. Moreover, Senate Bill 1099 would help communities prevent unfortunate situations like the one our District faces with Mrs. Kabel where, despite Mrs. Kabel having completely abdicated her duties to the District from 2014 through 2017, she nonetheless has filed a lawsuit demanding an immediate raise and seeking to dismantle a cost-efficient and fiscally sound tax collection system that has been in place for decades.
We are greatly appreciative of the work by Senator Martin, Senator Aument, Senator Wagner, and the others on Senate Bill 1099. In May or June, the Manheim Township Board of School Directors expects to consider a resolution to support Senate Bill 1099. The Pennsylvania Association of School Business Officials, a statewide organization comprised of approximately 3,000 school business and public finance experts, supports the Bill. We fully anticipate that other statewide educational organizations will soon join in that support as well.
We remain committed to keeping our families and the community updated on this situation in the need to be transparent and open about the negative impact of this lawsuit on both the community and the School District.
Update March 16, 2018
Dear Manheim Township Community:
We would like to take this opportunity to provide another update on the lawsuit filed against the school district by the local tax collector, Mrs. Patricia Kabel. The school district continues to receive many supportive emails and phone calls from our community regarding the lawsuit. We are pleased to inform our community that last week, Superintendent Dr. Robin Felty was copied on a letter that was sent to the local tax collector from Steven Mentzer, State Representative of the 97th Legislative District. In his letter to Mrs. Kabel, Representative Mentzer shared his experience as the former tax collector for Manheim Township and communicated that he worked collaboratively with the school district to allow the district to continue its longstanding method of collecting school taxes internally. Upon being elected as State Representative, Representative Mentzer was obligated to resign his position as tax collector; therefore, a formal deputization agreement between he and the school district was not executed. Despite the absence of an agreement, Representative Mentzer affirms that he was “working with the school district to officially deputize them to collect the school taxes.” Representative Mentzer further exemplified his support for the school district by urging the tax collector to meet with the school district to resolve the lawsuit, “so as not to create unnecessary costs to the taxpayers of Manheim Township.” We would like to publicly thank Representative Mentzer for the favorable and constructive communication and for reaching out to Mrs. Kabel regarding his positive experiences in working with the school district. While we have not yet received a response from Mrs. Kabel agreeing to meet with the school district, we are extremely optimistic that we will hear from her in the near future.
Update February 9, 2018
Dear Manheim Township Community:
In recent weeks, the school district has received many emails and phone calls from our residents and other individuals seeking information about the lawsuit filed by our local tax collector, and expressing their concerns about Mrs. Kabel’s decision to initiate her lawsuit. Our community members have also offered support to the district through written correspondence to the Lancaster Newspapers and postings on various social media in order to express outrage at the lawsuit whose purpose appears only to be to increase the cost of collecting their taxes. We share your anger. We thank you for taking the time to learn more about the lawsuit, the process for collecting taxes, and most importantly, offering your support of the school district. It is amazing to see how quickly our community comes together!
In order to better understand the situation surrounding the financial impact of having Mrs. Kabel collect our district real estate taxes, it is necessary to understand how she will be making money from the collection of our taxes. Our efficient and capable collection of our own taxes has been the reason that the district has collected the taxes over three decades.
The Manheim Township Board of School Directors set the tax collector compensation at 0.15 cents per tax bill in January 1997. The school district has not had any reason to modify this rate since there have been no tax collectors collecting, or expressing any interest in collecting school district taxes. In the past, the district has also offered $1,000/year to tax collectors who have agreed to deputize the school district to collect its own taxes. Deputizing the district provides the most efficient, cost effective and competent collection of taxes by utilizing existing staff and an automatic deposit process through Fulton Bank. This exact process is what Manheim Township School District has been doing for the last thirty years.
Since our last update (posted below on January 5, 2018), the district made yet another attempt to communicate with Mrs. Kabel. The district sent her a letter on January 19, 2018 offering the two options as explained above (0.15 cents a bill or deputizing the school district). Mrs. Kabel chose to respond through her counsel, who stated that she will not allow the district to continue to collect its own taxes and that she will continue to challenge the compensation of 0.15 cents per tax bill. In short, Mrs. Kabel simply wants to be paid more for tasks she never sought to perform prior to her reelection.
So how does this affect you, our taxpayer? The district strongly opposes Mrs. Kabel’s effort to increase her compensation through her litigation. The residents of the Manheim Township School District deserve a tax collection system that provides both an efficient and effective process and customer service. Many times, taxpayers come to the school district’s office for tax payment assistance and questions. The district has several individuals on staff that assist with these matters. As mentioned in our previous community letter (posted below), the Manheim Township taxpayers will have to pay significantly more to collect the same dollars while also destroying a well-organized, effective, longstanding practice.
How much more will the taxes be if Mrs. Kabel collects them? The answer to this question will be determined after a potentially lengthy and costly legal process.
We are meeting in the near future with a local Senator to address potential legislation.
In summary, it is regrettable that Mrs. Kabel pursued her lawsuit against the district to increase her own compensation. The district will continue to insist upon competent and cost effective collection of its taxes for the benefit of our taxpayers. We will continue to keep you updated on the status of Mrs. Kabel’s lawsuit.
January 5, 2018
Given inquiries about the public law suit initiated by the Manheim Township tax collector in November 2017, the Manheim Township School District (MTSD) offers the following response in order to keep our community informed and knowledgeable about the facts.
The District imposes a real estate tax pursuant to the Pennsylvania Public School Code (published in 1949), and is a taxing district for the purposes of the Local Tax Collection Law. Under this law, the elected tax collector is authorized to collect real estate taxes on behalf of the school district. The locally elected tax collector is compensated at a rate that is established by the School Board. Tax collector terms for most municipalities run for four years effective the first Monday in January following the election. Most recently, municipal elections in Manheim Township were held in 2013 and 2017.
With the cooperation of the elected tax collector(s), many school districts in Pennsylvania collect their own taxes in lieu of an elected collector due to more modern and less costly collection methods. This cooperation of allowing school districts to collect their own taxes involves an agreement between both parties known as “deputizing.” Therefore, those school districts, along with MTSD, have traditionally collaborated with the elected tax collector(s) to identify agreeable methods for collecting taxes that do not impose additional costs to the taxpayers. The MTSD has been fortunate to have worked collaboratively for many years with past MT tax collectors in order to save money for our district and avoid a negative financial impact on our taxpayers.
Beginning with the first term in office on January 1, 2014 and continuing until the filing of the lawsuit, the current tax collector took no steps, or showed any interest, to collect school district taxes. Unfortunately, this collaborative working relationship with the local elected tax collector has ended without any notice since the collector is now suing the school district in order to hold the sole power of tax collection. By removing the school district from its longstanding centralized real estate collection process, which was designed to protect our taxpayers from wasted monies, we would need to use taxpayer dollars to compensate the tax collector, and to establish a new tax collection process. At the same time, the district would lose revenue that we currently collect with the current process. The school district for many years has used existing staff and an automated deposit method through a local bank to collect taxes, which offers a cost-effective, efficient, and safe method of tax collection that does not pose an unfair financial burden on our taxpayers. At MTSD, the savings to our taxpayers is significant when the school district collects taxes instead of the tax collector. The district estimates that it could spend at least $40,000 or more a year to have this function performed by the elected tax collector.
This example of wasted money exemplifies why the school district has partnered with the local tax collector over the past 20 years or more to protect taxpayers (and the MTSD) from this undue burden. Because the tax collector has refused to speak with district staff this past summer when two separate attempts were made to continue the partnership between the MTSD and the tax collection office, we are unable to determine the rationale for the lawsuit. It would be extremely unfortunate if the primary reason for the suit was to end the longstanding partnership between both parties and force the district to spend additional taxpayer dollars. The district has already paid over $1,500 in legal fees surrounding this lawsuit, and we anticipate additional funds being spent as the tax collector continues to pursue the lawsuit.
It is known that the collaborative relationship of many past years has been a significant cost-savings to our taxpayers. At a time when the school district is striving to save dollars and balance our growing budget, it is unfortunate that an unnecessary lawsuit is the chosen method to dialogue, and end the well-established and cost-effective process that is already in place, especially at the expense of our taxpayers.