The city is unlikely to exceed its ceiling for non-profit tax exemptions for many years, according to Coun. Garth Frizzell, after Exploration Place had its property re-assessed.
The museum and science centre saw its assessed value drop an astounding 98.9 per cent, which means the tax exemption it will apply for this year will be fraction of what it asked for in the past.
"The numbers we had expected to be requested had been above the cap," Frizzell said. "But in reality what will happen is the amount requested will be quite below the cap this year, that's my expectation."
Until this year local non-profits had been receiving a full property tax exemption from the city, but when the cumulative amount of those exemptions passed a pre-set threshold for 2013 council had voted to reduce the exemption to 97 per cent in the fall. That meant organizations large and small were going to be hit by a surprise tax bill this year.
The city's self-imposed cap is 1.5 per cent of the municipal tax levy, but this year it was expecting more than $1.2 million in exemption requests which would have put it around 1.54 per cent. The re-assessment of Exploration Place changes that picture dramatically.
"When they get their tax bill, it won't be the big tax bill from last year and they won't have to apply for an exemption on that big tax bill, they're going to be given a very small tax bill so they're only going to have to apply for an exemption on the very small tax bill," Frizzell said.
Exploration Place CEO Tracy Calogheros said once they found out there wasn't going to be a full exemption for 2013, the board of directors decided to ask for a second opinion on the building's value in part to mitigate against any future increases.
"When I talked to someone over at assessment, they had a close look at our account and right away they said, 'I think there are some issues here,' " she said. "So we never even had to go to appeal."
First the actual value of the facility was almost cut in half, from $6.2 million down to $3.6 million. Then a provincial exemption for non-profits of $3.5 million was applied. That means for this year the assessed value for which city taxes will be applied is only $96,700. The actual taxes owed will be a fraction of that amount.
In the meantime, the city had already passed the 97 per cent bylaw, so it had to find a way to rebate the taxes it was now obligated to collect. To solve the problem Coun. Dave Wilbur suggested a one-time grant program could be devised and it passed on Wednesday by a 6-2 vote with Mayor Shari Green and Coun. Cameron Stolz opposing.
Green pointed out that since the city passed the 97 per cent bylaw in the fall, it was on the hook not only for the municipal portion of the property taxes but those owed to other organizations like the school board. Since the city couldn't unilaterally force other organizations to pay back their taxes, the grant program was increased from $40,000 to $60,000 to ensure non-profits will be fully exempt this year.
"Our city, when you compare us with other communities, we allocate too much money if you can imagine to non-profits," Green said. "This is a group in our community that do amazing things and we rely on them and we're strong partners with them but we caught ourselves in a bind last fall."