LOWELL — The city manager plans to ask the city’s largest nonprofits face-to-face why they won’t make voluntary payments in lieu of property taxes.
The new, more aggressive initiative comes after the city administration and city councilors were stung by news that UMass Lowell plans to acquire the Perkins Park residential mill development, which will eventually take several hundred thousand dollars in property taxes out of the city’s coffers.
A report from the city’s chief financial officer also recently pointed out that Lowell, the state’s fourth-largest city, is only 23rd in the state in terms of how much money it gets in so-called payments-in-lieu-of-taxes.
The city administration will now look beyond UMass Lowell to include nonprofits like Lowell General Hospital, Community Teamwork, Inc., the Boys & Girls Club and others. As nonprofits, they aren’t required to pay property taxes, but many communities try compelling such entities to make voluntary payments.
“I would like to sit down with them and find out why they don’t feel like they should contribute,” City Manager Kevin Murphy said at last week’s City Council meeting.
Murphy called it “amazing” how many police calls the city receives to nonprofit properties, particularly Lowell General’s Varnum Avenue and Saints campuses.
Several city councilors have also pushed for the city to become more aggressive in collecting voluntary payments from larger nonprofits — agreeing they wouldn’t go after smaller ones such as houses of worship. The council backed Murphy’s plan to sit down with nonprofits.
“I think that dialogue will go a way to explain to them where we are financially, the services we do provide that don’t cost them anything, and how we can find common ground,” said Councilor Rodney Elliott, who chairs the council’s finance subcommittee.
Elliott said he hopes nonprofits will agree to share responsibilities in emergency-service and other costs. “I would like to think they’d understand,” he said.
Councilors have also spoken about forming a task force that could propose a voluntary payment structure for nonprofits. Councilor Jim Leary said creating such a task force could be done if Murphy’s planned meeting with nonprofits is not successful.
Councilor Bill Samaras also supported pressing the city’s largest nonprofits, those that he said “are a major force” in the city.
“The idea of forming a task force, I think, would help the city manger and his staff address this problem,” he said. “It’s an important next step.”
The city recently compiled a list of how much each of dozens of nonprofits would owe the city if they were to be taxed as other property owners are.
UMass Lowell, for example, would have paid the city nearly $1.9 million. Lowell General Hospital would have paid the city just over $1 million.
In all, Lowell nonprofits would have paid the city just under $3.9 million if they were nonexempt taxpayers.
The city sent each of those nonprofits letters detailing what they would have paid the city in fiscal 2015, with a suggestion that they make a contribution. Only just under $17,000 was given, less than 1 percent of what would hypothetically been owed, according to the city.
Only three small nonprofits made such payments to the city last budget year: Mechanics Hall on Dutton Street, and a condominium building on Merrimack Street, and a home on Viola Street that are both classified as “charitable housing.”
City Hall is also continuing to look at what other communities have done to draw better results from nonprofits.
Two bills have also been introduced in the Statehouse, one in the House and one in the Senate, related to payment-in-lieu-of-taxes, or PILOT payments. Both would require nonprofits to pay 25 percent of what their property-tax bills would otherwise be.
Follow Grant Welker on Twitter and Tout @SunGrantWelker.
