Report for Executive Committee August 22, 2007 meeting.

Non-Profit Community Organizations Exemption – Edmonton Inner City Housing Society

Non-Profit Community Organizations ExemptionEdmonton Inner City Housing Society

Motion on the Floor:

MOVED S. Mandel (Made at the June 27, 2007, Executive Committee meeting):

That Executive Committee recommend to City Council:

That Bylaw 14619 be given the appropriate readings.

Recommendation:

1. That the Motion on the Floor be withdrawn or defeated.

2.That Executive Committee recommend to City Council:

a. That the municipal portion of taxes on Tax Roll 10030681 (11223 -87 Street) for 2006 and 2007 tax years and on Tax Roll 10030259 (11905 – 77 Street) for 2007 tax year be refunded under the authority of section 347(1)(b) of the Municipal Government Act, R.S.A. 2000, c.M-26 (MGA).

b. That Administration develop, for City Council’s consideration, criteria for establishing which organizations would be eligible for a property tax exemption in 2008 and address the financial impact of granting tax exempt status to these organizations.

c. That the Mayor request the Minister of Alberta Municipal Affairs and Housing consider

additional municipal grants to offset property tax exemption for non-profit housing operations and/or provide local jurisdictions with the ability to exempt non-profit housing entities from both municipal and provincial education taxes.

Report Summary

This report responds to two Executive Committee motions related to two separate reports that were before Executive Committee on June 27, 2007. The two responses are made in this one report. On review, Administration would like to deal on an ad hoc basis with the tax relief to Edmonton Inner City Housing Society for 2006 and 2007 and develop a plan to deal with tax relief for housing societies in the long term.

Previous Council/Committee Action

· At the June 27, 2007, Executive Committee meeting, the following motion was passed (with regards to report 2007PDA012 - Request from the Edmonton Inner City Housing Society for Tax Exemption)

That the June 12, 2007, Planning and Development Department report 2007PDA012 be referred back to Administration to provide further information.

· At the June 27, 2007, Executive Committee meeting, the following motion was passed (with regards to report 2007PDA014 - Bylaw 14619 - Non-Profit Community Organizations Exemption Bylaw Amendment No. 1)

That the following Motion on the Floor and the June 12, 2007, Planning and Development Department report 2007PDA014 be referred back to Administration to provide further information:

MOVED S. Mandel (Made at the June 27, 2007, Executive Committee meeting):

That Executive Committee recommend to City Council:

That Bylaw 14619 be given the appropriate readings.

Report

Background Information

In report 2007PDA012, Request from the Edmonton Inner City Housing Society (Attachment 1), Administration recommended that the 2006 municipal taxes on Tax Roll 10030681 be refunded and that the 2007 municipal taxes on Tax Roll 10030681 and 10030259 be exempt by bylaw.

Recommended Changes

· Administration now recommends that City Council refund both the 2006 and 2007 municipal taxes for Tax Roll 10030681 and 10030259 (pursuant to section 347(1)(b) of the MGA) instead of refunding the 2006 municipal taxes and exempting the 2007 municipal taxes by bylaw (pursuant to section 364(1) of the MGA).

· This recommendation change will allow Administration an opportunity to review property taxes levied and/or currently not levied to other non-profit housing organizations without setting a precedence of exempting taxes by bylaw to only one housing entity.

· The Edmonton Inner City Housing Society has several properties that are currently exempt from taxation; therefore, they were of the opinion that the subject properties would be treated in a similar manner from a taxation perspective. Cancelling municipal taxes payable for 2006 and 2007 provides relief without setting precedence.

· Regardless of how tax relief is granted to the Society, relief from municipal taxation does not alter the province’s right to receive school levies for the properties which do not pay municipal tax. In addition, refunding municipal taxes to any entity results in this shortfall to be spread amongst other taxable properties. Administration is therefore recommending that the Mayor and City Council approach the Minister of Alberta Municipal Affairs and Housing to request changes to its grant program providing municipalities with funding to offset lost tax revenues due to exemptions and/or exempt school levies on properties which do not pay municipal taxes.

· That the Motion on the Floor, regarding Bylaw 14619, be withdrawn or defeated.

Additional Information

It is important to note that the following information was very difficult to research and compile. As a result, please use this data as a guide rather than an absolute.

· There are approximately 1,100 housing properties owned by government agencies or non-profit groups currently paying all or some property taxes.

· Approximately 800 of these properties pay both the municipal and provincial education taxes, of which about 70 pay just the education portion and the remaining 230 pay only the municipal portion.

· The total property tax levied to the 1,100 properties is approximately $5.3 million of which about $4.0 million is municipal, and $1.3 million is provincial education.

Budget / Financial Implications

· If approved by City Council, the Edmonton Inner City Housing Society property located at 11223 -87 Street had a 2006 tax bill of $6,462.73 of which $4,148.21 is municipal. Taxes for 2007 are $7,087.81 of which $4,653.84 is municipal.

· The Edmonton Inner City Housing Society property located at 11905 -77 Street has a 2007 tax bill of $5,926.24 of which $3,891.16 is municipal.

Legal Implications

City Council has the authority (under section 347(1)(b) of the MGA to cancel or refund all or part of the tax payable for these two tax rolls for 2006 and 2007 if City Council finds that it is equitable to do so.

Justification of Recommendation

1. Withdrawing or defeating the Motion on the Floor will enable a less precedent setting option for refunding the Edmonton Inner City Housing Society’s 2006 and 2007 taxes.

2.a. Cornerstones, Edmonton’s Plan for Affordable Housing 2006-20011, calls for a review of City policies, processes, standards and bylaws that could be changed to assist in the development and/or reduction of costs of affordable housing.

b. The development of criteria to establish those organizations that would be eligible for an exemption and/or tax cancellation for City Council’s consideration will ensure that future requests for tax exemptions are treated equitably.

c. Subsidized housing is a Provincial responsibility. Therefore, lobbying Alberta Municipal Affairs and Housing for changes to grants and/or legislation to exempt non-profit housing facilities from paying education tax will assist these organizations in providing housing.

Attachments

1. Report 2007PDA012, Request from the Edmonton Inner City Housing Society

2. Report 2007PDA014, Bylaw 14619 Non-Profit Community Organizations Exemption Bylaw Amendment No. 1

Others Approving this Report

· W. D. Burn, General Manager, Asset Management and Public Works Department

· L. Cochrane, General Manager, Community Services Department

· J. Tustian, General Manager, Corporate Services Department

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ROUTING – Executive Committee, City Council | DELEGATION – M. Garrett/R. Risling

WRITTEN BY – A. Larner | July 31, 2007 – Planning and Development Department 2007PDA016

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