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City of Powell River CFO explains permissive tax exemptions

48 organizations have applied for $560,118 in municipal exemptions for 2024
OUTLINES PROCESS: City of Powell River chief financial officer Mallory Denniston presented two options for the granting of permissive tax exemptions to nonprofit organizations in the city. Qualifying organizations, under the proposal forwarded by the city’s committee of the whole, would not have to pay 97 per cent of city taxes.

A total of 48 community organizations have applied for $560,118 in municipal tax exemptions for 2024. City of Powell River has a permissive tax exemption cap of $400,000.

At the September 12 committee of the whole meeting, chief financial officer Mallory Denniston outlined 107 applications and the implications of the requests, as defined in her report to council.

“The purpose of this report is to obtain direction for the 2024 permission tax exemption bylaw, to be fully adopted by October 31,” said Denniston.

She said council can permit certain properties, such as nonprofit organizations, to be exempt from municipal taxes. Granting exemptions shifts the tax burden to the rest of the tax base, shifting how taxes are paid, she added.

Denniston said the city is oversubscribed for permissive tax exemptions. The applications have been assessed based on the policy criteria and all of the applicants meet the criteria, according to Denniston, other than the financial needs criteria.

“There is a requirement to demonstrate financial need,” said Denniston.

She said in looking at the requests, she had come to two possible interpretations. The first was a higher exemption to some organizations that meet certain financial need criterion and the second was a lower exemption to all the applicants. According to Denniston’s written report to councillors, the first option applies a 97 per cent exemption to some applicants that meet the financial need criterion. The second option would provide a 70 per cent exemption to all applicants.

Councillor Trina Isakson asked about the notification process for the various organizations applying for permissive tax exemptions. Denniston said the proposed bylaws are published twice after they are proposed, and there is also a recommendation in the first option that letters go to the organizations that don’t meet the criteria so there is a specific connection and an explanation of how the bylaw applies to them.

Councillor Cindy Elliott said some organizations applying for exemptions are nonprofits but are delivering government services by contract.

“It’s not in our criteria but I would like to see it in future,” said Elliott. “If properties that were being used to deliver government services from the provincial government, for example, were not eligible to be in the application in the first place, because the provincial government should be covering taxes when they deliver services, would some of these applications be considerably smaller?”

Denniston said some of those organizations meet the criteria. It just comes down to financial need, she added.

“They are not excluded under the Community Charter because they are nonprofits,” said Denniston. “It is not how they are funded, it’s whether they are a nonprofit.”

Elliott said those organizations’ land taxes should be covered by the government contracting them.

“I’d like our policy to say the provincial government can’t just hire a nonprofit to deliver government services and it be eligible for a permissive tax exemption,” added Elliott.

Denniston said that could be applied in the city’s criteria.

Elliott added that properties of organizations receiving government funding but were delivering programming outside of government funding should still be eligible.

Mayor Ron Woznow said he was supportive of a policy where nonprofits providing services for provincial government agencies do not get a tax exemption.

Councillor George Doubt made a motion for council to direct staff to prepare permissive tax exemption bylaws in accordance with the first option, and that letters be sent to those organizations that do not meet the permissive tax eligibility criteria. This would mean qualifying organizations would have 97 per cent of taxes covered by permissive tax exemptions.

Organizations such as inclusion Powell River, Lift Community Services of qathet Society, Powell River Kiwanis Housing Society, Strive Living Society and Powell River Kiwanis Village Society would be paying full taxes.

The motion carried unanimously.

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