PILOT Fees and Museums continued...

image: katerawlings.com

You've heard me write three on the value of sustainability practices in defending against PILOT fees (payment in lieu of taxes) threatened by municipalities.  Here is some great writing by Dan Yaeger of NEMA - the New England Museum Association.

His piece adds much-needed balance to my green-only comments. Dan's bigger-picture comment on sustainability can help balance your private and public discussions about PILOT fees and your institution's response. He writes that "If we construe the relationship between museums and their communities as merely a dollars and cents proposition, we are all impoverished."

It has made me think that my argument of calculating a monetary value of sustainability practices is narrow-minded. My thought was that by putting a costs-saved price on your reduced demands on your municipality by documenting reductions in waste removal, water consumption and municipal power, you can demonstrate a value, a credit, against the PILOTs. But reading Dan's piece I realize that I've just being drawn into their single-bottom-line approach.

Sustainability is about the Quadruple Bottom Line. If museums could just get a bit better at describing - in words, pictures and numbers, their value to People, Planet, and Profit through their Programs for our cities, then we won't have to worry so much about dreaded PILOTs. At least sustainability approaches can contribute to all four of those bottom lines.

More on PILOT Fees...

Massachusetts is at it again.  Now the town of Belmont is joining the cities of Cambridge and Boston in requesting that some nonprofits pay fees in lieu of taxes, PILOT fees. These payments will ease municipal budgets by paying some portion of the costs of public works and safety services. I'm just sayin', if museums could quantify the reduced demand on public works achieved by stormwater management, on site chemical reduction, and reduced energy consumption and increased energy production, they can defend their resistance to, or reduction in, PILOT fee payments.

There was more on this here in this blog.  PLEASE let me know if you're preparing for this eventuality in your area, and if you're using, or have used, sustainable practices to avoid costs and make your case to your municipality. 

Public Rating of Energy Use in Museums?

What will your public think when your energy consumption is posted online as if a tax record, added to an energy consumption black list, or branded on the side of your building?  Will they be proud, disappointed, or so annoyed they don't write that Annual Appeal check?

In the United Kingdom, all buildings housing a 'public authority' or providing regular service to the public, and of a certain size, must post a Display Energy Certificate annually. It ranks your energy efficiency from A - G, lists your carbon emissions, and identifies your energy sources - including renewables. It's quite colorful and must be prominently displayed. Can you imagine one in your museum?   

Well, Seth Godin's blog post Will Energy Consumption Stay Private? talks about a similar possibility: connectedness and measurements lead to information in the public domain.

Just like Pilot Fees, expect to see Energy Carbon Certificates on a museum near you soon. Why not pre-empt it with an Energy Star label or LEED plaque instead?

Revisit - The PILOTs are Coming!

This article in MassNonprofit discusses the Payment in Lieu of Taxes (PILOT) fees being paid by nonprofits in Boston, MA. 

Scroll down to the end of the article and the note about the Museum of Science and New England Aquarium declining to pay the voluntary fee based on their provision of services to the City.

Darned right they provide services!  And I bet they can quantify the green steps they've taken as part of those services.  Think of the value of managing stormwater runoff on behalf of Boston's Harbor, reducing water consumption on behalf of Boston's municipal water system, and reducing electricity consumption in support of the grid shared with the City.

I worried about these troubles for museums in my May 10, 2010 blog post on PILOTS. 

So, to reiterate - what avoided costs and important benefits do your green practices offer your community?  Can you quantify them, value them monitarily and avoid the PILOT fees coming your way? 

Are you ready?

The PILOTs are Coming: Use Sustainable Practices to Pay your Payments in Lieu of Taxes

The PILOTs are coming; the PILOTs are coming – even to little Concord, Massachusetts.

As more financially-stressed municipalities turn to PILOTs – Payments in Lieu of Taxes – and other nonprofit fees to build revenue, wary nonprofits are exploring ways to respond. ‘Right’ or ‘wrong’ is no longer the discussion; mitigation is.

I believe that by using sustainable practices to reduce demands on municipal utilities and services, museums could challenge their costs to the city: measure the reduced demands you make on city services through your green practices, and use that to stave of requests for PILOT fees.

Municipalities including Boston, Pittsburgh, Philadelphia, Baltimore, Indianapolis and even Concord, Massachusetts, are beginning discussions about PILOTs and asking mostly large, but even small nonprofits like Concord’s Emerson House to make payments to the municipality. What’s a museum to do? No, it’s currently against the law to tax a nonprofit, but these requests are in lieu of taxes; they are pressure points, not tax bills.

Now I’m all in favor of responsibility, but I’ve been preaching the green practice is a museum’s responsibility and that green practice reduces museums’ costs to the municipality. I think it’s our responsibility to reduce those costs, but I also think that museums should get credit for those savings in lieu of Payments in Lieu of Taxes!

Since PILOTs are about money, the negotiations between the museum and the city will require quantification: the value of your services, the cost of your demands on the municipality, and fair compensation on both sides of the equation. Measuring the benefits of environmentally-sustainable practice is your ace in the hole:

- how much has waste-reduction reduced your museum’s demand on municipal disposal services?
- how much has water-use reduction and stormwater management reduced water flow from your site?
- how much have energy-saving measures reduced your demand on public utilities?
- how have your museum’s transportation policies and practices reduced demand on transportation infrastructure?

If you’re using this tactic now, or if you do decide to use it, please let me know. I’d love to work with you on this!

A few links for the curious:
Concord and the Ralph Waldo Emerson House
http://www.massnonprofit.org/news.php?artid=1925&catid=13

Boston’s Task Force and plans for
- creating “a consolidation program and payment negotiation system, which will allow the City and its tax-exempt institutions to structure longer term, sustainable partnerships focused on improving services for Boston's residents”;
- clarifying “the costs associated with providing City services to tax-exempt institutions” and - developing “a methodology for valuing community partnerships made by tax-exempt institutions.” http://www.cityofboston.gov/assessing/PILOT.asp

Overview of Cities asking for PILOTs: Boston, Cleveland, Pittsburgh, British Columbia
http://lawprofessors.typepad.com/nonprofit/2009/11/local-tax-exemptions-at-risk-boston-cleveland-pittsburgh-and-british-columbia.html

Hawaii, Kansas, Pennsylvania, etc., etc.
http://www.nytimes.com/2010/02/28/us/28charity.html

The Situation in St. Louis.
http://www.stltoday.com/stltoday/news/stories.nsf/stlouiscitycounty/story/9F3DB4701FB3A495862576FE000A93D1?OpenDocument

A Blog Post suggesting students might help measure the value for Penn:
http://temple-news.com/2010/03/29/sans-estimates-city-nonprofits-have-no-landing-strip-for-pilot/

Call for Nonprofits Participation in Policy Discussions
http://www.blueavocado.org/content/attack-tax-exemption-killers

The National Council of Nonprofits report “State Budget Crises: Ripping the Safety Net of Nonprofits” http://www.councilofnonprofits.org/sites/default/files/Special-Report-State-Budget-Crises-Ripping-the-Safety-Net-Held-by-Nonprofits.pdf