Saturday, June 09, 2007

Theives Tend to Be Indigent When They Are About to be Revealed

Today's CDT has a story which places a bit of Graham's indigent testimony on Monday in a new light. Here is what Graham told the State Senate,

Senate Bill 1 will severely limit the University's opportunity to enter into contracts with outside entities that do not permit the terms of their agreements to become public due to competitive concerns (examples include our lucrative partnerships with Nike, Highmark, Pepsi, Barnes and Noble, and others).

Read this carefully. He is not concerned about the public finding out how much Penn State gets from these contracts or what they give in return should a new Right-To-Know law cover the University. He is concerned that Penn State won't be able to be able honor secrecy agreements with corporations should it be covered by a new Right-To-Know law. It about honoring agreements. The CDT story put the lie to this.

Penn State has an in lieu of real estate tax agreement with Centre County. Today Mike Joesph reports in the CDT that,

After months of being "polite," Centre County's government has formally notified a top Penn State administrator that the university has breached a financial agreement for payments in lieu of real estate taxes.

In a May 3letter from county solicitor Louis Glantz to Gary Schultz, Penn State senior vice president for finance and business, the county gives the university 60 days to pay almost $270,000 in payments in lieu of taxes on a visitors center, a book store and a restaurant or face "all available legal and equitable remedies.


The letter advises Schultz of a "a "serious breach" in the "amended settlement agreement," an agreement between Penn State, State College and the townships of Patton, Ferguson and Harris for Penn State payments to taxing authorities in amounts equal to real estate taxes but called "in-lieu-of tax payments.

"In order to determine the amount of payment, the agreement says, Penn State "shall provide the county a copy of the description of real estate contained in a lease within 30 days of the execution of the lease and shall submit to the county the information required by law for the establishment of the assessed value of the leased real estate ... ."


Boyde said the "amended settlement agreement" calls for the university to provide lease information to the county so that the county, not the university, can determine whether what has been leased is taxable.

Exarchos and Boyde said Glantz has been discussing the issue with Penn State officials since February, but the talks have gotten nowhere.

Boyde said the Board of Commissioners took the step to formally notify the Penn State administration because "it finally got to the point where we were tired of asking."

"We tried the polite ways and it doesn't seem to be working," Exarchos said. "How many other leases that they have not turned over are there that we are not aware of?... It dawned on me and us that there are monetary consequences here by their not living up to the settlement agreement."Glantz said Friday that in discussions Penn State has sought to defend its decision not to provide lease information by making a distinction between leases and "operating agreements."Asked what's the difference, Glantz said: "You tell me."

Penn State was required by the in lieu of tax agreement to turn over all lease agreements to the County. It then violated this requirement with a semantic game. It started to classify the lease agreements as "operating agreements" and then didn't turn them over to the County. This could happen because there is currently no legal requirement for Penn State to make these agreements public regardless of what Penn State decides to call them.

The specific lesson to take away from this is the need for new stronger Right-To-Know which covers Penn State and other state-related universities. The broader lesson is that Old Main cannot be trusted.

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