Council restores some tax-exempt statuses

Trio of service groups persuades council to reverse decision that would have forced them to pay property taxes

Steve Kidd

Western News Staff

Council has once again backed away from denying service groups a municipal tax exemption, at least for three groups who appealed their ranking.

The groups — the Salvation Army food bank and thrift stores, the Senior’s Drop-in Centre and the South Okanagan Brain Injury Society — had their tax exemption renewed after making their case at the regular council meeting Monday.

But council didn’t stop at returning the groups to tax-exempt status. They also decided to take another look at the permissive tax exemption policy and the arbitrary cutoff of $100,000 in working capital. Mayor Garry Litke also wanted to see the timeframe extended.

“I wouldn’t mind seeing something about a three-year decision, so we don’t have to do this year after year. Once the exemption is made, if that is part of our policy, then people can relax about it for some period of time,” said Litke.

While the Salvation Army’s church remained exempt, with $600,000 in the bank, their food bank and thrift stores were originally denied the exemption.

“It looks like we have lots of money but we don’t,” said the Salvation Army’s Major Dave Sobool, noting the units are not for profit and provide a valuable source of food, clothing and household items to those needing assistance.

In the past several years, said Sobool, the cost of providing the services is increasing faster than the increase in income from donations and fundraising drives. Most of the income comes at Christmas, with about $400,000 a year going through the food bank.

“When the (fiscal) year end comes, if we don’t have $200,000 left in the bank, we’ve done a really bad job, because we won’t make it to the end of the year,” said Sobool, pointing out the thrift stores also operate at a loss.

Coun. Wes Hopkin wanted to know at what point Sobool thought service organizations should start paying taxes, with an eye to revisiting the city policy.

“There are costs to running the city that need to be borne by everyone. If non-profits don’t pay for some of the services they consume, then the rest of the city has to take up the slack,” said Hopkin.

“I am hoping we are putting a lot more in than we are taking out,” said Sobool, pointing out that if the operation were small enough to run out of their church, the city wouldn’t be asking for the tax. It’s a matter of the scale of the operation, he explained.

“We are only bigger than that because the demand is bigger. We don’t want the demand to be bigger, you don’t want the demand to be bigger, but there is a reality in life that food banks are a growing need in our community,” said Sobool.

Don Wilson, representing the South Main Drop-In Centre, pointed out that many cities fund and run their own seniors’ centres, while in Penticton their non-profit group handles that, in a building built on city-owned land leased to them for $1 a year.

“If we weren’t providing these services, the cost to the community would probably be significantly more than the taxes,” said Patti MacAhonic executive director of SOSBIS. Her sentiments were echoed by James Palanio, a past president of the organization.

“This exemption affects all of the citizens of the city of Penticton. By taking the money away, it takes programs away. It puts people back out on the street,” said Palanio. “It’s not us that is benefiting, it is the entire community that is benefitting.”

Council voted unanimously to return all three groups to tax-exempt status. They also were unanimous in support of a motion from Hopkin, who suggested a review of the permissive tax exemption policy and the creation of a working group with not only council and staff, but representatives from affected organizations.