The City of Campbell River will be taking a look at how they assess and award Permissive Tax Exemptions.
A Permissive Tax Exemption (PTE) is a way for council to support local organizations by exempting land and/or improvements from municipal property taxation. Essentially, it’s a tax break for churches and charitable, philanthropic or non-profit groups that the city feels provide a valuable community service.
These exemptions can be granted for up to 10 years, but it was decided that the latest round would only be for two years, so that the city can review its scoring criteria for future PTE applications. Currently, the applications go to the city’s Community Partnership Committee for evaluation, but other than whether or not an organization meets the eligibility criteria, there’s no standard for the committee to decide what percentage of the organization’s property, if any, should be exempted from taxation.
“When we were working through it this year, it became apparent that a lot of our decisions were fairly subjective,” says committee chair Poppy Steele.
So the committee has asked council to allow them to look at implementing a weighted scoring system for applications to determine that during future applications, beginning with the 2022 intake of applications.
Coun. Michele Babchuk asked if the committee had looked at what that type of system may look like.
Committee Member Poppy Steele says they “haven’t gone into much detail with that,” and that’s why they were recommending approving the two-year exemptions this time around to give them enough time to look at possibilities, “because we feel like it will be a pretty in-depth process. We don’t feel it would be ready for next year’s intake, and the following year is an election year, so we were advised by staff it wouldn’t be a good idea to have it for that year, either.”
The report from the committee requesting the review says the weighted criteria system may include such factors as the number of citizens served, the level of service provided by the organization in relation to the dollar amount of PTE, the quality of the organization’s financial statements and competency of the organization’s administration in order to determine the percentage of a property granted a PTE.
Coun. Charlie Cornfield says he’s concerned that the criteria developed for weighting the system may become “too rigorous” and “create more work for the charities and non-profit groups to provide the information for you to make the decisions. I’m quite satisfied with the decisions and rationales provided now.”
Steele says the committee would definitely be taking those types of concerns into account during the development of the new system. They would also be looking at how other communities establish their exemptions to see if there are any best practices being used elsewhere that could be incorporated here.
Council gave the go-ahead to the committee to begin the review process, and also gave first and second reading to the Permissive Tax Exemption Bylaw for 2020 and 2021, which is available here for public perusal and feedback before being adopted.