Policy Order O-4

WHEREAS: All nonprofit organizations are legally exempt from real estate tax for the property they own and use for exempt purposes; and

WHEREAS: This can set up a situation in which a municipality has a large quantity of land area exempt from tax revenue; and

WHEREAS: A land area equal to 43% of the total land area of the City of Cambridge is tax-exempt; and

WHEREAS: The costs of essential services provided by the municipality, such as police, fire, street maintenance, and snow plowing cannot be collected on these properties; and

WHEREAS: Some municipalities ask nonprofits to pay money or services to help cover the cost of the services that they receive from the municipalities; and

WHEREAS: The City of Cambridge sends out a letter to nonprofit organizations requesting a donation to the city based on 26 cents per square foot of land area; and

WHEREAS: Four nonprofit organizations, Harvard University, MIT, Cambridge Housing Authority and the Broad Institute provide the bulk of the city's Payments In Lieu of Taxes (PILOT) payments via agreements with the City; and

WHEREAS: Other municipalities have initiated ambitious campaigns to encourage, enlist and make agreements with

WHEREAS: For example, Boston seeks to enlist into their PILOT program all non-profits owning property worth at least $15 million by requesting payments equal to 25 percent of what the organizations' tax bill would be if they had no exemption; and

WHEREAS: Under Boston's new PILOT program, in the first half of 2012 almost $10 million were received, which is more than 90 percent of the total that Boston officials requested; and

WHEREAS: The residents and business people of Cambridge are paying their fair share in property taxes and certain nonprofits may be in a position to contribute more funding for city services; now therefore be it

ORDERED: That a Task Force be formed to review Cambridge's current program to creatively encourage and maximize participation in PILOT agreements with the city, and to evaluate the possibilities of implementing SILOT (Services In Lieu of Payment) and/or GILOT (Grants In Lieu of Payment) programs; and be it further

ORDERED: That the City Manager be and hereby is requested to report back to the City Council with a report on the strategies and action plans relating to this endeavor.