Finances of tax-exempt organizations to be more closely examined by Port Moody

Port Moody will be taking a closer look at the finances of organizations granted property tax exemptions by the city.

During a review of the permissive tax-exemption guidelines on June 20, staff admitted that beyond the initial applications, the organization’s financial statements are not reviewed or verified for eligibility.

Coun. Kyla Knowles said she’s been wanting to discuss reviewing these financials since coming into office, describing her stance as “trust, but verify.”

“It would be interesting to take a look at the financial statements, for all, to determine whether or not a permissive exemption is really necessary at this time,” Knowles said. “This is something that we should be reviewing a little more closely, given (the city’s) financial constraints.”

Port Moody hands out close to $185,000 to 13 organizations which use their properties for public services, or provide some form of public benefit.Other property owners across the city subsidize these organizations.

Council voted unanimously to review their financial statements and applications every four years.

While the city does not grant tax exemptions through a means test – a determination based on financial need – it does have certain guidelines for eligibility.

These include use of the property to fulfill a public recreational, cultural, religious or charitable need, inclusive of the entire community, and not using the space primarily for profit motives.

Staff said exceptions are made, however; for instance, if a church is generating revenue, but also providing a daycare facility for which the city has determined a need.

Knowles said she would prefer if the organizations were means tested.

“Just because, you know, the government is giving out X number of dollars, doesn’t mean that you should take it if you don’t need it,” Knowles said.

There are four churches, four societies, four societies, and five non-profit organziations including two affordable housing organizations.

They offer a range of services on their properties including day care, parking space, food banks, community gardens, and educational workshops and programs.

Staff said while they do try and verify some information included in annual reports, “they are not doing site visits.”

These processes include checking with the Canada Revenue Agency to ensure the organization is in regulatory compliance.

But Paul Rockwood, general manager of finance and technology, said that periodically reviewing the organization’s financial statements could be beneficial, noting there are revenue streams, such as daycares, that could be backed up with data.

However, Rockwood did add that staff very carefully examine initial applications before any exemptions are granted.

“We had an application a number of years ago from a church,” Rockwood said. “We’re very careful to scrutinize that the place of worship is open to all of the public. And this place was not, so the application was denied.”

Coun. Diana Dilworth was supportive of Knowles’ motion, stating the city needs to have a policy to outline how often these applications are confirmed.

“We prepare our bylaws and our policies for worst or best-case scenarios” Dilworth said.

Mayor Meghan Lahti was not against a more thorough review, but said she did not want to overburden the organizations.