Grave Burden

A GRAVE BURDEN

A GRAVE BURDEN

An aerial view of Sewickley Cemetery. (Andrew Rush/Post-Gazette)
People burying loved ones in Pennsylvania sign agreements that promise they are buying something most businesses wouldn’t offer — a guarantee that a grave will be taken care of forever.

But will it?
June 10, 2019

It came as a surprise to retired Judge Frank Lucchino that private individuals could own cemeteries and operate them as businesses.

That revelation hit him while presiding over a case in Orphans’ Court shortly before retiring two years ago. The case involved an aging woman who owned Woodlawn Cemetery in Wilkinsburg.

She wanted to sell to a 30-year-old man who was leaving the military. She had run out of money. She had set aside only about $80,000 in a state-mandated fund to pay for the 56-acre cemetery’s perpetual care. It was questionable whether she had paid taxes.

“It never dawned on me that a man or woman could own a cemetery,” said Judge Lucchino, who was more familiar with graveyards operated by religious organizations.

PNC Bank had made a formal request to withdraw as trustee. The judge scheduled depositions and requested documents related to state law on cemeteries, the cemetery trust account and the operation of the cemetery itself.

He eventually approved the bank’s request. But the case led him on an educational journey that left a lasting impression.

From left, Todd Viola, groundskeeper, and Ted Stevens, superintendent, tamp down dirt over a burial plot at Sewickley Cemetery. (Andrew Rush/Post-Gazette)
From left, Todd Viola, groundskeeper, and Ted Stevens, superintendent, cover a burial plot at Sewickley Cemetery. (Andrew Rush/Post-Gazette)

“I was more concerned with the perpetual care side of things,” Judge Lucchino said. “There was one person at the Department of State that oversees cemeteries. But they didn’t cooperate with me on the case. My concern is that the government is not doing enough to make sure that promise [of perpetual care] is fulfilled. Cemeteries are one of those things people don’t pay a lot of attention to.”

A false sense of security

Cemeteries exist in the darkest corners of a bureaucratic system that keeps an eye on every regulated trade in Pennsylvania from car dealers to massage therapists.

People burying loved ones in the Keystone State write checks for thousands of dollars and sign agreements that promise they are buying something most businesses wouldn’t offer — a guarantee that a grave will be taken care of forever.

“Every cemetery company shall set aside annually and deposit into a permanent lot care fund a sum equal to at least 15% of the gross amount of the funds ... .”
— Pennsylvania statute Title 9, Chapter 3, Section 303

But cemeteries regularly fail and owners walk away, facing few apparent consequences while the burden of that perpetual care may end up falling on taxpayers and the communities where acres of land can become an eyesore.

Pennsylvania has a patchwork of laws that may give a false sense of security to consumers. There are no state workers directly assigned to monitor the financial health of cemeteries or to identify operators not obeying the rules for setting aside a perpetual care fund.

State statutes requiring cemeteries to set aside 15% of the sales of each grave plot for perpetual care don’t even apply to the majority of cemeteries — those owned by churches, religious organizations, fraternal organizations and families.

State officials don’t know exactly how many graveyards exist, although the Allegheny County Funeral Director’s Association estimates there are about 1,000 privately owned and religious cemeteries in the 11-county region around Pittsburgh.

Funeral director Frank Perman, a member of the organization and owner of Perman Funeral Home and Cremation Services in Shaler, estimates there could be as many as 6,000 graveyards across the state.

The best guess is that 80% to 85% of all cemeteries are exempt from state oversight, with the remaining 15% to 20% falling under any Pennsylvania review.

For the most part, these silent cities of the dead have fallen through the cracks, buried and forgotten.

Need help cutting the grass — and more

The borough of Munhall never planned on getting into the cemetery business.

Now this small community of about 11,000 people on the west bank of the Monongahela River is stuck with managing a graveyard whether it wants to or not.

A memorial to Civil War veterans stands at the Homestead Cemetery. (Andrew Rush/Post-Gazette)

Homestead Cemetery was thrust on Munhall residents about four years ago when members of the nonprofit board responsible for the 34-acre graveyard left no assets to pay creditors and no savings account.

The 140-year-old cemetery contains thousands of graves, including several dozen Civil War soldiers.

The previous board didn’t file taxes in the past decade. No one in the local government knows who allowed a cell phone company to build a tower. Nor do they know who receives revenue from the cell tower.

“We don’t know the ins and outs of how the cemetery got to this point,” said Mayor Rick Brennan, who appointed a new board of directors when he took office in January 2018. “This mismanagement occurred over a long period of time. That cemetery should have been set up for forever.”

It’s likely that Munhall will be stuck maintaining it for the foreseeable future.

Weeds are beginnning to overtake James S. Roberts’ grave marker at the Homestead Cemetery. (Andrew Rush/Post-Gazette)

A volunteer group that used to spend weekends trimming the jungle of weeds and debris grew so overwhelmed that its members called it quits in August 2017.

There is no use asking the state to help pay the costs.

According to the state’s Burial Grounds, Municipal Control Act of May 10, 1923, courts have the authority to designate local governments as caretakers of neglected burial sites. The local government must then finance maintenance, and the grounds must be open to the public.

Furthermore, a petition signed by at least 25 people residing within a five-mile radius of the municipality-owned and -maintained burial ground may be used by a court as a means to order the municipality to rid a graveyard of overgrown brush.

There are several instances around the state in which cemeteries have become problems. Oak Ridge cemetery in Altoona has become a trash dump, according to news reports. Suburban Memorial Gardens in Conewago Township, Dauphin County, fell into disrepair while its owners were in prison. Mount Moriah Cemetery, which sits on 380 acres in southwest Philadelphia, closed in 2011 with no notice to the city and has needed volunteers to do maintenance.

For now, Mr. Brennan said Munhall, with a tax rate of 10.75 mills and a 2019 budget of $9.1 million, has relied on young adults in the juvenile court system to provide labor in the cemetery.

The borough also has asked the Internal Revenue Service to reinstate the cemetery’s tax-exempt status — lost after not filing taxes for three years — so the community can start soliciting donations.

“Once we have the tax-exempt status, I will go to the municipalities of Munhall, Homestead, West Homestead, Whitaker and West Mifflin,” the mayor said. “I will approach them and ask for help in cutting the grass. I’ll ask them to contribute $1,000 or $2,000 each. I don’t know for sure. But I estimate it will cost $40,000 to $50,000 a year to cover maintenance.”

‘The problem is cremations’

“My advice is don’t buy a cemetery,” said Craig Cunningham, board president of the nonprofit Grandview Cemetery Association.

His great-grandfather was one of the founding members of the North Versailles graveyard. There are about 13,000 graves there.

“Back when we first started in the 1930s, we would have 125 to 130 traditional burials a year,” Mr. Cunningham said “Now we are lucky to have 45 to 50 in a year. That’s quite a drop.

“The problem is cremations.”

Cremation urn (Ten Four Social)

Cremation has become a more popular choice. Although there are several reasons for this cultural shift — such as family members moving away from their hometowns and changes in the religious landscape — the price tag has arguably played the biggest role.

A full-blown burial could cost $7,000 to $9,000 versus around $500 for a cremation. The National Funeral Directors Association reported that in 2016, for the first time, more than half of Americans were cremated.

In some cases, cemeteries aren’t even getting the reduced revenue that a cremation burial might bring. Many families choose to either scatter their loved ones’ ashes or to keep them in urns.

In the Pittsburgh region, nonprofit and privately owned cemetery companies also have been losing business to the 292-acre National Cemetery of the Alleghenies, which opened in 2005 in Cecil Township and is only open to veterans and their spouses.

“A veteran can go there and get a free grave for himself and his spouse,” said Ron Deiger, senior vice president at Union Dale Cemetery on Brighton Road. “The government will even provide a free headstone for both of them and there’s no charge for interment. It’s completely free. And it’s hard to compete with free.”

Adding to the list of woes is the fact that cemeteries’ investments in stocks or bonds — a common tool to help insulate against inflation and long-term expenses — may not be producing enough gains to make up for the revenue dips.

Financial conditions at Grandview Cemetery worsened to a point in recent years where the directors felt they had no choice but to dip into its perpetual care fund to pay operating expenses. Although such withdrawals are restricted by state law, withdrawals are allowed for necessary maintenance and upkeep expenses.

The 2018 burial of Sgt. Jason Mitchell McClary, 24, of Export at the National Cemetery of the Alleghenies. Sgt. McClary died of injuries from an improvised explosive device in Afghanistan. He was awarded two Purple Hearts and three Army Commendation Medals. (Steph Chambers/Post-Gazette)

Thanks to cost-cutting measures — such as letting go of Grandview’s full-time staff and hiring contractors to dig graves, cut grass and answer phones — the cemetery turned the corner in 2017, earning a $20,000 profit.

“That may not sound like much, but it sure beats losing money,” Mr. Cunningham said.

Dipping into the funds

Records filed with the Court of Common Pleas show Allegheny Cemetery in Lawrenceville made withdrawals from its perpetual care fund of $193,422 in 2013 and $197,103 in 2014.

The massive cemetery’s perpetual care fund has $4.2 million left, according to David Michener, president and CEO.

Kimberly Ebberts, 38, of the North Side and other volunteers put flags on the graves of military service members buried at Allegheny Cemetery in preparation for Memorial Day. (Nate Guidry/Post-Gazette)

Homewood Cemetery, in Point Breeze, withdrew $80,619 from its Permanent Lot Care Fund in 2007 and made another withdrawal of $90,118 in 2008.

Mr. Michener points out that the withdrawals were legal.

$7,000 - $9,000
Approximate cost of a burial
$500
Approximate cost of a cremation

“State law says the use of the permanent lot care fund shall be used for the perpetual care, maintenance and preservation of the lots and grounds and for the repair and renewal of building and property connected with and forming part of the cemetery,” he said.

He said those two cemeteries have millions in their perpetual care funds, as well as millions in other trust funds.

Perpetual care funds are meant to be used for general maintenance and repair of cemetery grounds. For example, mowing and lawn care during the growing season would fall under perpetual care, as would upkeep of roads, paths, sewer systems, necessary buildings and signage.

Instead of raiding the fund to pay creditors, the owner of Restland Memorial Park in Monroeville, Mark Lehnert, filed Chapter 11 bankruptcy in October to renegotiate his debts.

Mr. Lehnert reported liabilities between $500,000 and $1 million in his bankruptcy filing.

He has an account balance of $258,000 in the cemetery’s perpetual care fund, according to his lawyer.

“A lot of cemeteries are tempted to take that money when they have problems,” said Donald Calaiaro from the Calaiaro Vaselencik law firm, Downtown. “My client has not. I’m glad my client has been careful to protect the trust fund.

‘Acquiring a headache’

Cemeteries are found in small towns and urban communities, along busy highways, hilltops and quiet countrysides surrounded by the beauties of nature.

Many sit abandoned next to church buildings that no longer function as religious institutions. The churches were never required to have a perpetual care fund and the cemeteries have gone into a state of disrepair unless family members and neighbors take care of them.

Some try to find a more permanent solution.

Allegheny County privately owned, for-profit and non-profit cemeteries on file with the state
Excludes cemeteries owned by churches, religious organizations, fraternal organizations and families

Source for map and table data: Pa. Department of State
Excludes cemeteries owned by churches, religious organizations, fraternal organizations and families.

“We have had several small cemeteries over the years ask us to take them over,” said Stuart Nye Hutchison III, a trust and estates lawyer at the K&L Gates law firm, Downtown.

He serves on the nonprofit board of directors for Homewood Cemetery and Allegheny Cemetery. His maternal grandparent is buried in Allegheny Cemetery. His paternal grandparents are in Homewood Cemetery.

He said some cemeteries offered for takeover are family-owned operations. The families don’t want to be in the business anymore.

“We would look at their situation — as far as their perpetual care funds — and we would find they had none, or what funds they had were well below what should be in there,” Mr. Hutchison said.

“We had to say no. We would be acquiring a headache. These cemeteries would have been significant management problems from the start.”

‘We have eight miles of road or more’

State law requires nonprofit and for-profit cemetery operators to file annual reports by Jan. 31 of each odd-numbered year with the Court of Common Pleas of the county in which the cemetery is located.

By Jan. 31 of each even-numbered year, a cemetery company acting as its own trustee must file an interim report with the state Real Estate Commission.

“Cemeteries are self-reporting as to whether they file financial statements with the county,” says a statement provided by the Pennsylvania Department of State. “The department doesn’t have inspection authority over cemetery companies. They are registrants, not licensees.

33.3%
The percentage of cemeteries registered in Allegheny County since 1988 that have any financial reports on record

“Once a potential non-compliant cemetery is identified, the department works with the cemetery to achieve compliance regarding the filing of their financial accounts. If there is theft or misappropriation of funds, the department will pursue prosecution. Otherwise, we work with them to gain compliance.”

The Department of State has disciplined a few cemeteries for failing to register with the state Real Estate Commission. Most cases result in consent agreements. There were two occasions in recent years where charges were filed but were later withdrawn.

One case that resulted in adjudication for operating without being registered was against Charleroi Cemetery Co. in September 2016. The cemetery was ordered to pay a civil fine of $2,000.

Only 12 of the 36 cemeteries registered in Allegheny County since 1988 have any financial reports on record, which suggests more than half have not been audited for decades, Allegheny County court and Real Estate Commission records show.

Even cemetery operators who try to follow the state’s regulations are frustrated.

“There was a point in time when I stood at a clerk’s desk and they did not want to accept our financial report,” said Ernie Peterson, senior vice president at Ameriserv Trust & Financial Service in Johnstown.

Mr. Peterson said the state never provided guidance to courthouse workers on how to accept and record the annual filings.

His company handles financial reporting for 45 cemeteries across the state, including the 360-acre Jefferson Memorial Park cemetery in Pleasant Hills, one of the largest and busiest in the state.

Mike Connors, standing with shovel, and Emil Sujeta of Jefferson Memorial Cemetery in Pleasant Hills prepare the grounds in March for a burial. (Nate Guidry/Post-Gazette)

Jefferson Memorial has a balance of $15 million in its perpetual care fund but is unable to file its annual reports with the county.

That is ironic because the cemetery’s owners were involved in creating Pennsylvania’s regulations on establishing accounts to fund perpetual care.

Jefferson Memorial CEO Harry Neel, 69, said his father and other progressive cemetery owners in the 1960s organized to pass a law requiring all cemeteries to set aside 15% of all funds collected for burials to create a perpetual care fund.

“There is as much infrastructure here as a small community,” Mr. Neel said. “We have eight miles of road or more.”

‘We’re paying the bills’

Pete McQuillin and his wife, Nancy, knew privately owned cemeteries were vulnerable to failing, but that didn’t stop them from investing their retirement savings in 2008 to start Penn Forest Natural Burial Park in Verona.

Theirs is the first and only green cemetery in Pennsylvania certified by the GreenBurial Council as a Natural Burial Ground. The 32-acre site is designed for 1,400 grave plots where people and animals are buried in boxes using no chemicals in order to lessen their environmental impact.

Scott Wendt, chairman of the board of directors at Sewickley Cemetery, stands on the cemetery grounds. (Andrew Rush/Post-Gazette)

“We’re paying the bills. I’ll say that,” said Mr. McQuillin, 74. “The first few years we had more going out than coming in. Now, we have a little surplus and one employee. But I still can’t pay myself.”

It’s not just the niche cemeteries fighting to stay solvent.

“We lose money every year,” said Scott Wendt, chairman of the board at Sewickley Cemetery in Sewickley.

It costs about $500,000 a year to run the cemetery. That includes maintenance as well as paying 100% of health care benefits, a retirement plan, salaries, sick days and vacation days for four employees.

Ten years ago, there were 7.5 employees.

Founded in 1859, Sewickley Cemetery now does between 85 to 110 burials a year, charging between $1,600 to $1,850 per lot. Its annual revenues are around $270,000, which does not cover expenses.

In addition to annual fundraisers, the cemetery operators have been filling the budget gap by soliciting private donations from individuals who have family members buried there.

Mr. Wendt said he has raised about $1 million over the past three years to pay the cemetery’s savings account, which is what it uses to cover budget shortfalls.

Separately, Sewickley Cemetery has about $1.6 million in its perpetual care fund. Mr. Wendt doubts it will be enough to keep the 83-acre graveyard maintained as well as it is now.

“If you look at the costs, 15% doesn’t even begin to cover the expense of maintaining a cemetery,” he said.

Tim Grant: tgrant@post-gazette.com or 412-263-1591.

Cemetery owner doesn’t see bright future for industry

(Tim Grant/Post-Gazette)

Dominic Seman could have done anything when he left the Army three years ago. He considered going to the police academy. He could have gotten a job with a trade union or become an auto mechanic. But he literally chose to build his future in a dying industry.

Mr. Seman decided to buy cemeteries and make a living operating them.

Today, at 34 years old, he owns three graveyards in Allegheny County — Woodlawn Cemetery in Wilkinsburg; William Penn Cemetery in Churchill; and Hollywood Cemetery in Sheraden.

The work isn’t that complicated. He doesn’t mind mowing grass and digging graves. He described himself as an old soul and the job of burying bodies and tending graves is one that suits his personality.

“I don’t think there are too many people who would be interested in doing this.”
— Dominic Seman

“I don’t drink or go to bars or have too many friends,” Mr. Seman said. “I come to work. I’m by myself. No one bothers me. I don’t have problems.

“I wear work clothes all the time. People just think I’m a worker somewhere. When you tell people you own a cemetery, they don’t believe you.”

From a value standpoint, he believes he got a great deal.

Woodlawn Cemetery and William Penn Cemetery were owned by the same woman — Inez Kress. She and her husband purchased them in 1988. He died in 1989.

She didn’t want the cemeteries to begin with, according to Mr. Seman. He has a long history with Woodlawn because his father had been the caretaker since 2003 and he used to help his dad from time to time since the age of 14.

He said Mrs. Kress leaned more toward office work. The cemetery business was not her cup of tea. “She could have walked away,” he said. “Anybody can walk away from a cemetery with no legal problems. If you can’t take care of it, then what are they going to do? They can’t put you in jail.”

He said she felt a moral obligation to keep it operating.

When he offered to buy the two cemeteries, he was ending a four-year commitment in the Army’s infantry division. She had become older and she saw his offer as an opportunity to move on with her life, even though she originally wanted $1 million for both and he was offering only “a few thousand.”

He said that while he was in the service, his father informed him that a man had offered to purchase the Woodlawn cemetery for $200,000. The first person who had ever been interested in buying it, the man spent a few months observing the operation and finally backed out.

“If I were to leave this place, all three of my cemeteries will be abandoned, and no one will take them over. They would turn into forests again.”
— Dominic Seman

Mrs. Kress became discouraged. That is when Mr. Seman offered to take it over and she accepted the offer.

Property records do not indicate exactly how much Mr. Seman paid for either cemetery and he declined to disclose his purchase price. County records reflect only that his name was added as an officer on the cemetery’s board of directors. The previous owners’ names were removed.

Meanwhile, his opportunity to buy the third cemetery came because Mrs. Kress was friends with the owners of Hollywood Cemetery. The husband and wife had moved to North Carolina.

They would come back to handle a burial, but they weren’t taking day-to-day care of the cemetery. When they heard Mr. Seman had purchased Mrs. Kress’ cemeteries, they offered to sell for whatever he would pay.

The owners of the 50-acre cemetery had been asking $1.5 million, but it had been up for sale for the past 50 years. They dropped the price to “a few thousand dollars” when he expressed interest, he said.

“I looked at it as a way to make money,” he said.

Woodlawn Cemetery had three employees, when he was considering the deal, and he thought they spent more time watching TV than handling chores. “That let me know there must be money in this business. I know myself and I knew I could do more work than these people were doing.”

For the most part, he works alone with an occasional helper. Mr. Seman said the three cemeteries produce a total annual gross revenue of about $200,000, which is a far cry from what they used to earn in the 1920s, but still enough to support him.

$500 - $700
Price of a burial plot in one of Mr. Seman’s cemeteries

William Penn is the most profitable. It does between 70 and 100 burials a year. Hollywood Cemetery gets 12 to 13 burials a year. Woodlawn Cemetery gets maybe two or three.

Mr. Seman can sell burial plots for $500 to $700. He also collects a $1,700 fee for opening and closing each grave.

He said the first two cemeteries he bought had roughly $100,000 in each perpetual care fund. Hollywood Cemetery had no money in its fund.

He said that while the Woodlawn Cemetery endowment fund was being managed by a trustee, it was earning about $800 a year, but he’s handling that himself now and claims to be earning about $900 a month.

Mr. Seman has no wife, no children or heirs who would continue the work he is doing to keep the cemetery grounds manicured. He doubts that he will be able to sell the cemeteries, because there was so little interest before.

“If I were to leave this place, all three of my cemeteries will be abandoned, and no one will take them over. They would turn into forests again.

“People don’t want to work today. I like it. I like the idea of owning a cemetery where I can cut grass and make some money. But I don’t think there are too many people who would be interested in doing this.”

Tim Grant: tgrant@post-gazette.com or 412-263-1591.

Credits

Writing and Reporting
Tim Grant

Photography
Andrew Rush
Nate Guidry
Steph Chambers

Design and Development
Laura Malt Schneiderman

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