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Chester County Press

Avon Grove School District could be impacted by pending hospital sale

06/27/2017 03:57PM ● By Steven Hoffman

Jennersville Regional Hospital is being sold by the for-profit Community Health System to the not-for-profit Reading Health System. While local officials are optimistic that the long-term health of the hospital will benefit as a result of the transaction, the sale could potentially impact the Avon Grove School District financially.

Reading Health System could seek tax-exempt status for Jennersville Regional Hospital, and the four other hospitals it is planning to purchase from Community Health System—the Brandywine Hospital, Chestnut Hill Hospital, the Phoenixville Hospital, and the Pottstown Memorial Medical Center—and that could translate to lost revenues for school districts.

According to Daniel Carsley, the director of business administration and chief financial officer for the Avon Grove School District, there could be $500,000 or more in lost revenues for schools if Jennersville Regional Hospital, one of the largest taxpayers in the district, earned tax-exempt status.

Before Jennersville Regional Hospital was owned by Community Health System, it had been operated as a tax-exempt facility. The purchase by a for-profit owner created significant new revenues for the school district.

Most of the details about the pending hospital transaction, which was announced on May 30, remain undisclosed at this point. Carsley pointed out that in the case of Jennersville Regional Hospital, it's not even known whether Reading Health System is purchasing just the hospital or the hospital and the land that the facility is situated on in Penn Township.

Curtis Mason, the chairman of the township's board of supervisors, said that he thinks the potential sale includes the hospital and all its holdings—including 25 acres of land in Penn Township—but he is not certain at this point.

It will take six months or more to finalize the transaction, so it may be some time before more details about the sale emerge. Once the transaction is completed, the new owner would need to seek tax-exempt status.

Mason said that if there is a hearing regarding the tax-exempt status of the hospital, the township and the school district will likely have legal representation there, and they could negotiate an arrangement between the hospital and the township and school district.

Carsley noted that Reading Health System has an agreement in place with the Wyomissing School District to provide health services to the district, and there could be the potential for a similar arrangement in Avon Grove.

Depending on how long it takes Reading Health System to complete its purchase of Jennersville Regional Hospital, Carsley said that it's possible that the school district budget for 2018-2019 could be impacted. The district will finalize that budget in May or June of 2018.

Mason, the longtime township supervisor, said that the potential impact on the township's revenues will be minimal because the township's municipal millage rate is just 0.5300 mills.