Every year, Penticton city council faces a decision over granting property tax exemptions. File photo

Penticton delays decision on tax exemptions

City council divided on which organizations should get property tax breaks.

Penticton city council couldn’t come to a decision on permissive property tax exemptions at their meeting this week, deferring it to Oct. 18.

“We will deal with this then, hopefully with more clarity in our discussion,” said Mayor Andrew Jakubeit.

Year after year, council ends up in a contentious discussion of the property tax exemptions granted to societies, service groups and other organizations.

“Every year it puts the council in a difficult predicament in terms of having to make decisions on community groups doing good community work,” said Jakubeit, noting that when city council has tried to reduce the exemptions, there has been a backlash from the groups and the community.

Of the 95 applications received for property tax exemptions, almost 20 per cent were turned down for 2018. The total property tax lost for the city is $229,000, with another 30 applications, pre-approved for church and school properties, add another $112,889.

Including the properties not meeting city criteria would add another $141,896.

Related: Penticton eases up on tax exemptions

The primary reason for turning down the 12 groups, representing 17 of the properties, was that they were not in hardship, based on exceeded a limit of having $100,000 in working capital.

Jakubeit points out that the usual sequence of events is for council to go with the staff recommendation on which applications to approve and deny, only to have “pretty much every service group that didn’t get their exemption coming here saying how much good work they do” at the next meeting.

“If you look at the list here, it has everything from the Brain Injury society to Hospice House to Anavets and a lot of community organizations,” said Jakubeit, referring to the list of applications not meeting criteria.

“The golf club (Penticton Golf and Country Club) is the only grey one there and not having any financial information there, that probably warrants having something from them before deciding,” he continued. “All the other ones are geared to youth or providing social assistance to the community.”

Much of the conversation centred around the Golf and Country Club along with the BMX Society, neither of which supplied financial information to support their application.

Coun. Campbell Watt was in favour of denying the applicants over the $100,000 limit, but giving the golf club and box people a final chance to submit their financial information.

“I think if you have working capital in excess of $100,000, perhaps there is a way you can afford your $2,000 to $3,000 taxes,” said Watt.

In the case of the golf club, Watt pointed out that the $23,989 tax exemption added up to an employee for the society.

“That is one full-time staff member that we are providing in our community,” said Watt. “The difference to a non-profit of $25,000 is significant.”

Coun. Andre Martin agreed with Martin, saying that the amount of working capital the organizations showed they were doing a good job of funding themselves.

“If we are going to put them in, and there is no point in having this (tax exemption) policy in place,” said Martin.

Jakubeit pointed out that the groups in question may be saving their working capital to accomplish a major project, and may now be penalized because they have saved more than $100,000.

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