This news organization’s review also identified instances in which taxpayer dollars were put at risk when the department failed to require some applicants to submit and maintain the minimum escrow fees outlined in the township’s subdivision and land development ordinance.
The reasons for these actions are unknown. No documents in the zoning project files reviewed by this news organization included explanations for the changes. Supervisors can vote to reduce or waive fees, but our review of zoning files and township minutes found no mention of such votes.
Officials at nearly a dozen other Bucks County municipalities interviewed by this organization said they rarely, if ever, reduce those fees or minimum escrow amounts, citing the potential loss of revenue.
This news organization spent five months reviewing documents associated with 134 projects submitted to Lower Southampton by 114 applicants between 2012 and last year. Among the findings:
- Twenty-seven applicants paid less in filing fees on 40 projects than what was outlined in the township fee schedule, an official document that details what townships charge for services in a given year including land development and zoning.
- Four applicants did not pay any filing fees for six projects, a loss of more than $15,000 in revenue, records show.
- 10 of 42 commercial zoning applicants and 16 of 34 subdivision and land development applicants did not meet minimum escrow requirements outlined in fee schedules or township regulations.
The findings raise new questions as state and county investigations into the township zoning department’s past are underway. Those investigations began earlier this year after a consultant’s review of two dozen zoning project records found an unusually large number of common administrative “irregularities,” including “numerous” projects improperly issued permits without going through the land development approval process. The June report reviewed departmental operations and did not look at project application fees or escrows.
In an emailed response in September to this news organization’s findings on the uncollected revenue, Supervisors Chairman Keith Wesley said the board requested the Bucks County District Attorney’s office conduct an investigation into the zoning department’s past practices, and the board is waiting for that report to be completed. In a text message Saturday morning, Wesley said, “It will take some time to go through each case individually and find out what the circumstances behind each one were.”
Bucks County District Attorney Matt Weintraub this month confirmed the investigation is ongoing but declined to comment further. A Pennsylvania Department of Labor and Industry spokeswoman also confirmed its Bureau of Occupational and Industrial Safety investigation is ongoing.
Supervisor Kim Koutsouradis called the news organization’s findings “very disturbing.” He is the only other Lower Southampton board member who responded to multiple emails to their township or personal email addresses for comment in September and December.
“It makes me wonder why the checks and balances that are in place in this township were overlooked or not performed at all,” Koutsouradis said.
No explanations
This news organization sent applicant names and project numbers to Township Manager John McMenamin prior to his retirement on Sept. 21, as well as to acting Township Manager Joseph Galdo and Wesley to determine if supervisors approved the reductions.
McMenamin responded in an email he would look into it, but did not provide answers. Galdo said that it would be time consuming to research and suggested reviewing township meeting minutes. This news organization did not find any mention of fee or escrow reduction approvals or waivers in minutes that were reviewed.
Wesley, a supervisor for the last 10 years, said that he believed “some” escrow fee reductions were “agreed to between lawyers,” and may involve the law firm that currently represents the township.
Township Solicitor Francis Dillon, who was also township solicitor in 2012 and 2013, said he was “unaware of what or if any waivers were granted.”
Five applicants who responded to this news organization’s requests for comment said they had no knowledge they were paying less than the fee schedule outlined.
Unsigned, handwritten notes found in three project files from last year listed fee or escrow changes as “per CD” or “per Carol.” Current Zoning Officer William Oettinger identified the notes as referring to former Zoning Officer Carol Drioli.
Drioli, who retired earlier this year after overseeing the zoning department for 17 years, declined an interview request.
Discrepancies vary
Like other Pennsylvania municipalities, Lower Southampton charges a filing fee when a property owner submits a plan seeking permission to make a change to their property. Those fees generate revenue for the township and pay for zoning department operations. Application fees generally are not refunded, according to Oettinger and Dillon.
The fee schedule outlines what an applicant should be charged, if anything; with zoning and land development applications, filing fees vary based on whether the property is commercial or residential, and the type and size of the project.
An estimated $60,450 in those filing fees should have been collected but wasn’t over the five years reviewed by this news organization. The discrepancies were as little as $20, and as much as $7,000 for a single project submission.
Warminster developer County Builders and its subsidiaries, for instance, paid at least an estimated $15,700 less in application fees than what the township fee schedules required for four of six proposals submitted between 2013 and 2015, records show.
Records also indicate the developer was charged less than the fee schedule required for its Emerald Walk development, but how much less is unclear.
County Builders originally submitted an application for a 101-townhouse development in the 500 block of Old Street Road in 2012. Records show the developer was charged $34,800 in 2012, instead of $38,650 as outlined in the fee schedule.
At some point that year, the plans were “withdrawn,” according to a note in the computer records, Oettinger said.
No documents in the project’s zoning file suggest the plans were formally withdrawn. But a copy of the project’s original 2012 land development application was changed to reflect a new application filing date of Feb. 8, 2013, and it was given a new project number.
The application also was changed to reflect an additional 30 proposed townhouse and a new commercial zoning classification.
County Builders paid an additional $10,500 to reflect the added homes in 2013. But, according to Oettinger and the fee schedule, the builder should have paid a second full application fee of $49,150 for the residential development portion of the project.
Since application filing fees are non-refundable, Oettinger said, fees paid for a project that is withdrawn should not be applied to a resubmission of the project.
In April 2013, County Builders received preliminary and final plan supervisor approval for the townhouse development and preliminary approval for a commercial mixed use development plan for a property, “which immediately fronts Street Road located in the C-2 commercial district,” according to board minutes.
In an email, County Builders Vice President Kevin Reilly said neither he nor “anyone in my company” was aware of any discrepancies with the fees.
“If it is determined that, in fact, County Builders was undercharged any fee at all, then we will be happy to send a check to Lower Southampton Township for the same immediately,” Reilly said.
County Builders is only one example of the discrepancies found by the records review. Others include:
- Three out of six businesses applying for zoning variances in 2014 paid a $2,200 filing fee, while the others paid $2,400, which was the amount outlined in the fee schedule for that year.
- St. George Georgian Orthodox Church was charged $420 for a variance request in 2014, the rate charged homeowners. But it should have been charged $2,200, the commercial property rate, since churches are considered community buildings under the Pennsylvania Uniform Construction Code.
- Last year, eight applicants paid the $2,700 zoning variance application fee outlined in the fee schedule. Yet Gator Feasterville Partners, which is developing the former K-Mart property on Street Road, paid $2,600, and a local garage owner paid $1,000.
- Of five homeowners who applied for zoning variances in 2017, only one was charged the $475 filing fee listed in the fee schedule for residential variances. Three others paid $450, and one resident paid nothing at all.
- Two applicants were charged $2,500 for an application in 2016 and 2017 to change a lot line, but lot line changes were not included in the fee schedule. Applicants should not be charged for items not listed in the fee schedule, Oettinger said.
- Toner Homes of Huntingdon Valley was not charged the additional per-unit fee for major subdivision applications, an additional $5,600, as part of its application for its 16-townhome development in 2017.
- Citadel Federal Credit Union was charged $6,900 in application fees in 2017 when it submitted plans to subdivide and build a bank and retail business on property bordered by Philmont Avenue, Old Street, and Brownsville roads. According to the fee schedule, it should have been charged $500 more.
On top of the uncollected filing fees, the township lost another $5,000 when it refunded application fees for two homeowners and a business in 2012 and 2013, according to records.
“Left holding the bag”
In addition to paying filing fees, some zoning and land development applicants are required to open escrow accounts to ensure that expenses related to zoning and land development applications come out of the developer’s pocket and not the municipality.
Like filing fees, the minimum escrow amount varies, but it is outlined in the fee schedule. Unlike filing fees, once a project is completed, any leftover escrow is returned to an applicant.
Lowering or waiving escrow amounts carries potential financial risks for municipalities. If an escrow is too low or depleted, the bills associated with a project, such as fees for professional reviews by township consultants, still have to be paid.
″(A municipality) is leaving itself wide open to pay bills if the developer defaults,” said Herman Slaybaugh, co-chairman of the Pennsylvania Municipal Planning Education Institute and a former zoning officer and planner for State College. “If the applicant fails to pay the consultant, the municipality is left holding the bag.”
The Lower Southampton Subdivision and Land Development Ordinance requires applicants to maintain the original escrow amount. Applicants are required to post additional escrow if the fund falls below 20 percent of the original deposit.
The ordinance also requires the additional escrow amount be paid within 10 days of a township request. It also states that applicants understand that further review and approval of plans “may be withheld” pending the replenishment of escrow.
The ordinance also specifies that occupancy permits “shall be withheld until all fees and costs have been paid to the township in connection with the processing of any plans.”
But the township doesn’t penalize applicants who don’t promptly replenish escrow accounts when it falls below the minimum threshold, Oettinger confirmed. No documents in zoning files reviewed threatened penalties described in the ordinance for failure to replenish escrows.
Instead, records show, the township has used taxpayer dollars to cover the bills for those applicants with depleted or non-existent escrow accounts, then sent them notices requesting repayment. There is no deadline for the money to be repaid, Oettinger confirmed.
The township waited three years to be repaid $411.40 for an engineering bill that it paid for Lightageart LLC. The Northampton construction company is owned by Robert Irving Jr. and his son, former Lower Southampton Supervisor Patrick Irving.
The bill was related to an engineering plan review for one of two, two-lot subdivision applications Lightageart LLC sought for a property in the 600 block of Avenue A in 2015. Supervisors approved both minor subdivisions that year.
The outstanding bill was paid in June, records show.
In an phone interview, Patrick Irving, who resigned from the board last year, said he didn’t know why the bill wasn’t paid earlier and there was “plenty of money” in the escrow account.
But that isn’t true.
Lightageart did not post the $5,500 in escrow required for the project in the 2015 fee schedule, zoning records show. The same year, it posted just $3,000 for a second subdivision application.
Township policy forbids using escrow from one project to pay bills for a different project, Oettinger said.
Lightageart isn’t the only applicant whose project expenses the township covered. Others include:
- Business owner Frank DiSandro Jr., posted $2,000 in escrow, instead of the $10,000 the fee schedule required for a three-lot subdivision application. The township has repeatedly sought reimbursement for project costs, which reached as high as more than $5,500, before DiSandro repaid the township. Records also show DiSandro repeatedly failed to maintain the minimum $2,000 escrow amount despite township demands. Reached by phone for comment recently, DiSandro said, “I’m not answering your questions,” he said. “Just keep me out of it.”
- Bussinger Auto posted only $1,000 in escrow, not the $5,000 required in the 2014 fee schedule, when it submitted a sketch plan to expand the businesses. The business also did not pay a required $3,000 application fee, records show. In an email seeking comment, Steve Bussinger said the business paid all the fees “they were told to pay.” He added, “We actually paid over $15,000 in different fees. I am not aware of any discounts or waivers of fees.”
Not standard practice
Under Oettinger, Lower Southampton recently started requiring subdivision and land development applicants sign professional service agreements when plans are submitted to legally ensure payment.
But at least 11 other Bucks County municipalities have required those agreements for years to ensure that they are not stuck covering costs for project-related expenses even temporarily.
Officials in those towns also said they don’t waive or reduce escrow amounts under any circumstances and application filing fees are rarely discounted or waived, and only for public service, government or nonprofit agencies.
“In my tenure here, I do not recall the board ever even receiving a request from an applicant to waive fees for a zoning and land development application,” Newtown Township Manager Micah Lewis said.
Some townships go so far as to suspend project activity and professional reviews if an escrow fund falls below thresholds until it is replenished and fees paid.
Warminster was among the minority of municipalities that will pay township professional review fees “in some cases” for a developer when an escrow account goes below the required threshold, depending on the amount and the developer’s past history, Township Manager Gregg Schuster said.
“However, we will not cover a large amount and will instruct our professionals to stop work,” he added.
Upper Southampton Township Manager Joseph Golden said he couldn’t recall an instance where an escrow or application fee was discounted or waived.
“When solicitors and engineers expect to get paid, waiving is not really an option,” Golden added.
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