Ordinance 2465 Passed With Promise To Include All 501(c)(3) Non-Profits

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Published: August 13, 2016 @ 6:00 AM EST

An ordinance that updated the fees associated with construction permits and had included in it a section that exempted churches was passed by council with a promise that the exemption would be expanded to include all federally designated non-profits. Ordinance 2465 was discussed, voted on, and passed at the July 21st Mayor & Council meeting.

The section – 6(c) – originally stirred discussion among the governing body when it was first introduced in June. At that time, Councilwoman-At-Large Charlene Storey and Fifth Ward Councilman Thomas ‘Thos’ Shipley objected to having religious institutions exempted from paying permit fees.

During the discussion on the ordinance First Ward Councilman Eugene Meola said about the section regarding exemptions, “Having it [apply to all ] 501 will help out the people in the community who felt that the religious aspect of it was too much. They feel that a 501(c)(3) was the way to go and this is the compromise I think would best serve everyone involved.”

Councilman Shipley inquired to the governing body, “I guess I just have the one question. Why is this in there in the first place? Why the exemption?”

Mayor Carl Hokanson responded, “It was one of the things that was brought up with us.”

“By?”, asked Councilman Shipley.

“Between the two churches,” stated Mayor Hokanson, “Between the Methodist Church and the Assumption Church. That’s when I brought it to council.”

“I give money to charity, my husband and I, every year and we choose what charities we give that money to and we’re careful,” stated Councilwoman Storey, “I don’t want government deciding what charities or what non-profits my money goes to. That’s not the government’s job, it’s my job. It’s my money and I do not see why my money should go . . . I don’t think that the government has the right to choose – and I don’t think that this government has the right to choose – where all our citizens’ money goes to and that’s what it is. This is what we are doing. We are saying by not charging a fee, even though it’s a negative thing, we are saying that this money that we are saying where your money goes to and to me that’s picking my pocket.”

After the meeting Councilwoman Storey clarified that she was referring to having a government pick and choose where a citizen’s charitable money is given.

“I concur,” commented Councilman Shipley, “I don’t think it’s fair, especially in light of the increase in taxes and everything that’s going on right now. We as a citizen, not a 501(c)(3) or not a church, when we go in to do some construction we’re going to pay the fee and to say that somebody else doesn’t based upon their tax status or being a house of worship. That’s saying that I’m supporting that or my funds are going to offset what they’re not putting in and just by virtue of being that, I can’t, I guess I can say I can’t cotton that.”

Councilman Meola added, “I got a few phone calls on it. They were negative on the religious thing. The 501 seemed to be what kept everybody happy.”

“I get that but I just can’t see doing it for anybody,” said Councilman Shipley, “If somebody wants to do a fundraiser for [it]. Basically a 501(c)(3) or a church, whatever, you’re still – as a resident who is not part of that – you’re supporting an organization or your funds are going to, basically, offset those fees that they’re not getting for an organization you know nothing about, may not support, may not have anything to do with, and the list goes on and I don’t think that’s fair or a very smart thing to do.”

Meola remarked, “Well, it’s a compromise.”

Councilman Shipley said, “I understand the urgency in terms of like needing to get this done because as the construction goes and I get that but this needs to be addressed and I think it needs to be addressed the first time because it’s one of those things where there is a possibility that it will not be addressed and there’s going to be a problem with it.”

Mayor Hokanson interjected into the discussion, “I want to make sure that we clarify that we’re going to pass it the way it is. That we do the amendment at the next meeting.”

Borough Attorney Richard Huxford answered, “You’re passing it as is. The amendment . . . is not contingent. That’s a basically agreement between council that someone’s going to bring that up. It’s not part of this.”

Councilwoman Storey stated, “Theoretically, an amendment will be introduced at the next meeting. Can’t say there will be an amendment.”

Councilman Meola said, “I will introduce it.”

“You can introduce it but that’s not saying it’ll pass,” remarked the councilwoman.

Councilman Meola replied, “Okay, I will introduce it and I don’t know if it will get passed but I will introduce it.”

Mayor Hokanson reiterated that the vote was to pass it as is tonight with the next meeting to amend.

“Which leaves us tonight voting for something that is unconstitutional,” said the councilwoman.

Third Ward Councilman Ryan Kelly inquired of Mr. Huxford, “From a legal requirement, everything with this ordinance . . . we are within our right as a borough top move forward with this?”

“The research looked into, contacting other individuals, I would say yes,” responded the Borough Attorney, adding, “Now I would say one thing, the issue as to separation of church and state which the councilman brought up. It’s a fact-sensitive issue. No one can guarantee what would happen if it gets challenged and goes up to the courts, obviously.”

Councilwoman commented, “I don’t think this is a delicate question . . . This is unconstitutional. We watched people tonight swear to uphold the Constitution. Most of the people up here I think swore to uphold the Constitution. This is what the Constitution says. It doesn’t matter if you like it or you don’t like it. You want to live in a theocracy? Move to Saudi Arabia.”

Councilman Kelly retorted, “Just semantics, but for the swearing in portion, their hand was on the Bible and right hand was to God. I know it’s semantics but the grey area between church and state.”

“When I was [sworn in] my hand was on the Constitution of the United States,” the councilwoman responded, “And I am not the only person whose hand has been on the Constitution of the United States. Councilwoman Chen [-Hoerning] used [it] and I’m sure there have been others.”

The vote was called and the ordinance was passed 4-2 with councilmembers Elmarassy, Kelly, Meola, and Petrosky voting yes and councilmembers Shipley and Storey casting dissenting votes.

A major issue that was not fully discussed, if the exemption is applied to all federally designated non=profits, would be the loss in construction fees.

Relating to a brief discussion earlier in the meeting when Mr. Huxford clarified a point about construction fees being seen by some as a revenue stream, the Borough Attorney stated, “It’s not a revenue processing scheme. It’s not to raise revenue. It’s to offset the cost of running the department which – according to Mr. Belluscio – given the increase in the fees are appropriate given the financing of the Construction office . . . And even before that, the day-to-day operations, my understanding, he said that it is appropriate to raise the fees to make sure that the office is running at a zero net sum.”

If such is the case, then non-profits and, currently, houses of worship, would not pay to offset the costs of running the Construction Department. As one example, if or when senior housing is ever realized in the borough at the current Department of Public Works (DPW) site, the Domus Corporation – a 501(c)(3) – would still require all permits and inspections but would be exempt from related fees. Just taking Certificates of Occupancy, commonly known as COs, the municipality would lose out on $30,000 in fees for a 60-unit senior development. Other fees for sprinklers, plumbing fixtures, smoke detectors, would also be lost.

Another somewhat extreme example would be if IKEA were to purchase land in Roselle Park and open something like a storage warehouse for its furniture, all associated construction fees would be exempt since it is a 501(c)(3).

An ordinance, numbered 2472, will expand the exemption of construction-related fees to all non-profits. It will have its first reading and introduction at the August 18th Mayor & Council meeting.