AUBURN – Although the city hasn’t been collecting them, the Androscoggin Valley Council of Governments isn’t exempt from paying property taxes.

Richard Paul Faucher, a property tax specialist for Maine Revenue Services, researched the tax status of the state’s councils of government in response to an inquiry from City Councilor Bob Mennealy.

“I have discussed your question with my supervisor,” Faucher wrote to Mennealy, “and we are both in complete agreement: COGs are subject to property taxation.”

AVCOG has a 9,397-square-foot building on Manley Road. Assessor Joe Downey has been calculating the property’s worth and determining what the council should be charged in taxes for real and personal property since 1997. For this past fiscal cycle, AVCOG was assessed $24,536 in property taxes.

The agency doesn’t pay the bill, though. Rather, said Diane Freve, the city’s tax collector, Auburn has been regularly forgiving the taxes after they’ve been assessed.

Bob Thompson, AVCOG’s executive director, has maintained until now that as a nonprofit entity, that’s the way it should be. Thompson didn’t immediately respond to a call seeking comment on Monday.

Faucher said that while state law exempts COGs from sales and income taxes, property taxes aren’t included in the list of exemptions.

“In my 26 years with the property tax division, I do not recall ever seeing any provision that would allow for a property tax exemption for property which is owned by a COG,” Faucher wrote in an e-mail to Mennealy, which Mennealy made public.

“A basic rule of property taxation is that everything is taxable unless it is specifically exempted; taxation is the rule, and exemption is an exception to the rule,” he added. “Consequently, barring the existence of any provision to the contrary, real estate which is owned by a regional council of governments would be subject to property taxation by the municipality where the real estate is located.”

The council provides economic development, and environmental and transportation planning services to 43 cities and towns and three counties in central and western Maine. Its members pay for the services through assessments levied on them by AVCOG.

In 2003, Auburn paid the council $19,445 in addition to forgiving its taxes. Lewiston, the largest member of AVCOG, paid $25,000 to the council.

On Monday, Mennealy said, “There was never a doubt in my mind that I was correct regarding Avcog and taxes. I knew the law.”

He questioned, though, why the city manager, Patricia Finnigan, directed that AVCOG’s taxes be forgiven.

“The scary part about this whole thing,” Mennealy said, “is that Pat Finnigan on her own told staff members, despite a ruling from (lawyer) Curt Webber to the city and a relayed message to her from the tax assessor that Avcog should be paying taxes, to not send avcog a tax bill.”

He asked, “What right does she have to decide who obeys the law?”

Mennealy said his pursuit of the issue isn’t vengeful. He’s looking, he said, “just (for) an admittance that an error was made and to have Avcog start paying taxes as of now.”

He said, “Avcog performs valuable services, but it is not above the law, (and) neither is the city of Auburn or Pat Finnigan.”

Finnigan didn’t immediately return a call seeking comment.



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