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City Considers Billing Nonprofits for Public Services

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With the city's looming budget crisis all options seem to be on the table. City Assessor James Hester has identified a potential new funding stream, although it may prove politically unpopular.

A neglected ordinance from 1993 gives the city the ability to collect a service fee from nonprofit organizations otherwise exempt from property taxes as a reimbursement for basic city services such as police and trash pickup. Under the ordinance places of worship would not be charged.

Nonprofits are not pleased.

“I'll fight that tooth and nail,” says Melba Gibbs, executive director of the Freedom House homeless shelter. “We can't afford it. We're already providing the city with a service.”

The 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 fee allows the city to assess a portion of the property tax rate and could yield about $800,000 in new revenue.

“At this time the mayor has not made any changes to current procedure,” mayoral spokeswoman Tammy Hawley says, “but he is reviewing the matter with City Council.”

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