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Staff to break down permissive tax bylaws

Quorum would disappear due to conflict-of-interest ruling

This year’s permissive tax bylaws, combined with a conflict-of-interest ruling last January, created a few challenges for City of Powell River officials recently.

Each year, city council adopts permissive tax bylaws, which allow tax exemptions for not-for-profit organizations. In January, the BC Court of Appeal found that when an elected official serves as a director of a society, he or she may have a pecuniary conflict of interest if the society receives a monetary benefit from the local government, even though the elected official may not benefit personally. When an elected official declares a conflict, he or she may not discuss or vote on the issue.

City staff presented three permissive tax exemption bylaws for 2014 at the September 12 committee-of-the-whole meeting.

While city staff doesn’t advise councillors on potential conflicts, Marie Claxton, city clerk, pointed out that one of the bylaws included a number of organizations on which some councillors serve as directors. Councillor Myrna Leishman is president of both the Senior Citizens Association of BC, Branch 49, Powell River, and the Sunset Homes Society, both of which are included in the bylaw, and Councillor Maggie Hathaway is president of the Source Club Society of Powell River, also included in the bylaw.

As well, two exemptions are for property owned by Dave Formosa Holdings Ltd., and leased to the Powell River Brain Injury Society, of which Councillor Debbie Dee is the executive director. Formosa is the city’s mayor.

Claxton pointed out that if the mayor and three councillors declared a conflict on the bylaw, there would not be a quorum. “Staff will take the direction that we look at Bylaw 2361 and break it down so there will be more bylaws,” she said. “But that way, we won’t lose a quorum when these bylaws come to council for consideration.”

The Community Charter lists two classes of tax exemptions, statutory and permissive. Examples of statutory exemptions, which receive 100 per cent exemption, include public schools and grounds, churches and the land underneath the church, hospitals and public libraries.

Permissive tax exemptions are allowed for a variety of not-for-profit organizations and for some properties that are held by organizations that receive statutory exemptions, such as church halls or land surrounding a church.

Permissive tax exemptions are at the discretion of city council and may range from zero to 100 per cent. For 2014, the city received six new applications. In addition to the brain injury society, the city received applications from: the Nature Trust of British Columbia for property at Cranberry Lake and on Park Avenue; the Powell River Association for Community Living for property on Marine Avenue; and from the British Columbia Society for the Prevention of Cruelty to Animals, for property on Duncan Street.

In 2014, the proposed tax exemptions total $267,171 for the city. In 2013, the bylaws provided $232,526 in tax exemptions, while in 2012 the total was $236,663.

The city must adopt the bylaws by October 31 each year.