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Will City Fees Cripple Nonprofits?

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Local nonprofits are banding together to fight the city's recent move to begin collecting fees in lieu of taxes from charitable organizations.

“It's unreasonable,” says Deborah Williamson, executive director of the Virginia Network of Nonprofit Organizations.

A 1993 city ordinance calls for charging tax-exempt nonprofits — with the exception of churches — a percentage of their property value as reimbursement for city services, such as picking up trash and providing fire and police protection. The ordinance, however, has not been acted on until now.

Maurice Rice, fiscal officer for Richmond Residential Services, says his nonprofit agency will have to fork over about $10,000 on its 13 group homes for developmentally disabled adults.

He says the fees will force the residential group to cut costs elsewhere, such as “staff or the groceries and supplies we provide.”

The fees are due to the city June 15.

Jim Hester, the city's real estate assessor, says there are 210 parcels in the city that fall into the nonprofit category, with a total assessed value of $328 million. The service fees could yield about $800,000 in new revenue.

City Council President Kathy Graziano doesn't relish the idea of acting on a city ordinance for the first time 16 years after it was passed.

“Nobody had a heads up so they could put it in their budgets for this year,” she says. “Now on the flip side, all those nonprofits that are now tax-exempt use all our services, so that's something we're going to look at in the future.”

Suzette Denslow, chief of staff to Mayor Dwight C. Jones, echoes Graziano's sentiment, hinting that the fees could be scaled back.

“We are working with City Council to find a solution that doesn't unduly charge not-for-profits a newly enforced service charge, in the middle of a fiscal year,” she says.

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