The Kamloops Film Society (KFS) will face added financial pressure next year without a property tax exemption from city hall, despite the city having plenty of room in its funding cap to approve the request.
“It puts pressure on the rest of our operations,” executive director Dusan Magdolen told KTW. “Hopefully, it won’t be the straw that broke the camel’s back. It puts more pressure on getting attendance and on us getting sponsorships.”
On Tuesday, staff recommended the society be denied a permissive tax exemption — an exemption from property taxes granted to non-profits, hospitals, independent schools and places of worship — because it missed the May 31 application deadline and potentially competes with the Cineplex Odeon in Aberdeen.
Magdolen was at council to defend the society’s application, explaining it missed the deadline because it only took over operation of the downtown Paramount Theatre in May. The theatre is not in direct competition with the Cineplex, Magdolen argued, noting it offers different programming and screens movies passed on by the larger theatre.
The Paramount’s property taxes in 2019 were more than $15,000.
“With trying to make this a viable venture. This is a huge amount of money for us as a society, in trying to keep the Paramount Theatre running,” Magdolen told council.
Council voted 6-1 against staff’s recommendation to deny the KFS the exemption, with Mayor Ken Christian and councillors Sadie Hunter, Dale Bass, Kathy Sinclair, Dieter Dudy and Bill Sarai voting against. Citing the application deadline, Mike O’Reilly voted in favour of staff’s rejection recommendation.
Coun. Denis Walsh declared a conflict of interest and Coun. Arjun Singh was absent, due to Union of BC Municipalities matters.
Staff clarified to council after the vote, however, that the KFS was not then automatically exempt from paying property taxes. In addition to voting against staff’s rejection recommendation, council needed to approve a tax exemption for the film society by way of a motion.
However, no motion was presented.
City corporate services director Kathy Humphrey said council’s vote and lack of motion ended with the same result as staff’s rejection recommendation — with the KFS paying property taxes in 2020.
“Basically, they [council] didn’t consider their application and, therefore, it was not approved,” Humphrey said. “They didn’t approve it. Permissive tax exemptions need approval.”
Sinclair said she spoke out “on principle” against staff’s recommendation.
Asked why she did not then introduce a notice of motion to give the film society the tax break, Sinclair separated the two decisions, citing the need for review in the future, but telling KTW she didn’t feel it was fair to give an exemption to KFS after it missed the application deadline. She said she understands both the city and non-profit perspectives, having worked as executive director for the Kamloops Arts Council.
“No. 1 is the missed deadline,” Sinclair said.
Bass said as a newcomer to council, she thought voting against staff’s rejection recommendation meant the KFS would receive the tax exemption. However, when asked if she would have made a motion had she known otherwise, Bass would not go that far, also citing deadlines.
Instead, O’Reilly suggested reviewing council’s policy at the committee level, a motion unanimously supported by council.
The city had plenty of room to approve the request, under its funding cap. The city’s cap for non-profit property tax exemptions is $701,800 for 2020. Currently approved for next year: $460,652.
Magdolen said the property taxes were included in the society’s $500,000 budget, but noted the budget is an estimate. With a slower summer and lower revenues than budgeted, the society is now hoping its expansion of offering this fall will make up the difference.
“It shouldn’t end the company, this amount. But because things are so tight, there’s a chance that that amount could become very significant,” he said. “Hopefully, things take off in the fall and none of that will be an issue. But, obviously, it would have been a nice thing to get. We’re going to cross our T’s and dot our I’s and get it done for the spring.”
Earlier this year, the Kelson Group purchased the Paramount Theatre, at Victoria Street and Fifth Avenue, from Landmark Cinemas. Kelson is leasing the theatre to the KFS, with the lease agreement stating the film society is responsible for paying property taxes.
Could council change its mind?
Asked if council could still make a notice of motion to provide a tax exemption to KFS, the city’s corporate officer said she is unsure.
“We’d have to look at the timelines because bylaws need to be in place by Oct. 31 and there needs to be a gap of at least one meeting between them,” Maria Mazzotta told KTW, noting two weeks without council meetings in October. “Conceivably, someone could introduce a notice of motion and, if it were to pass, we may or may not have time to prepare the necessary bylaws for consideration.”
Two others denied permissive tax exemption
The United Way Thompson Nicola Cariboo was also denied a property tax exemption, as it is in the process of moving into a new space.
Some of its new space in The Station building on Tranquille Road in North Kamloops will be used or revenue-generating purposes. KTW recently reported on the financial hurdles faced by United Way, as a result of pledges falling through, and the trickle effect it has had on non-profits in the community. Two city councillors — Sinclair and Bass — voted against staff’s rejection recommendation, while Christian and councillors Hunter, O’Reilly, Dudy, and Sarai voted in favour of staff’s recommendation to deny the United Way an exemption.
Council also voted unanimously to deny Brocklehurst’s Generation Victory Centre Ministries an exemption as it is not deemed statutorily exempt by BC Assessment.