REPORT TO

MAYOR AND COUNCIL

PRESENTED: JUNE 22, 2009 - SPECIAL MEETING REPORT: 09-90

FROM: FINANCE DIVISION FILE: 1970-04
SUBJECT: LANGLEY MEMORIAL HOSPITAL FOUNDATION REQUEST FOR TAX RELIEF

RECOMMENDATION(S):
That Council receive this report for information regarding a letter received from Langley
Memorial Hospital Foundation (LMHF) requesting property tax relief on a lot they own located
near the Langley Memorial Hospital.

EXECUTIVE SUMMARY:
The Township received a letter from the Langley Memorial Hospital Foundation dated February
19, 2009,(copy attached), in which they requested property tax relief for the year 2008 and
property tax exemption for future years on Lot 4 which is owned by the Langley Memorial
Hospital Foundation. Lot 4 is located near the Langley Memorial Hospital and is currently being
used as a staff parking lot for Langley Memorial Hospital employees. LMHF has stated that the
net revenue over expenses from the parking fees is used for the purpose of providing essential
equipment for the Langley Memorial Hospital.

Prior to the 2008 property tax year, British Columbia Assessment provided a statutory property
tax exemption for Lot 4 under the Community Charter section 220. In June of 2007 British
Columbia Assessment removed Lot 4 from the statutory exemption list because the lot is not
owned by Fraser Health Authority and the lot needed to be “Designated” for future hospital
purposes by the Minister of Health.

The Community Charter does not allow municipalities to refund property taxes duly levied. In
2008 the LMHF received about $95,544 in parking fee revenue with expenses of $25,862
resulting in a profit/surplus of $69,682 as per the 2010 permissive exemption application
received. Council has the following options which can be funded from the 2009 surplus:

• Provide a grant for the 2009 property taxes amounting to $54,279,

• Provide a grant for both the 2008 and the 2009 property taxes amounting to $106,370,
• Do not provide any grant for 2008 or 2009 property taxes.

The Township has now received a permissive exemption application from LMHF and will
process this application along with all other 2010 applications to be presented to Council in
September/ October of 2009.

PURPOSE:
The purpose of this report is provide Council with information regarding a letter received from
Langley Memorial Hospital Foundation requesting property tax relief on a lot they own located
near the Langley Memorial Hospital.
Langley Memorial Hospital Foundation
Page 2 . . .

BACKGROUND:
The Township received a letter from the Langley Memorial Hospital Foundation dated
February 19, 2009, copy attached, in which they requested property tax relief for the year 2008
and property tax exemption for future years on Lot 4 which is owned by the Langley Memorial
Hospital Foundation.

Langley Memorial Hospital Foundation was incorporated, in 1985, as a non-profit organization

under the Society Act of British Columbia. The purposes of the LMHF are to as follows:
a) To facilitate, support, enhance, increase and improve the provision of medical care and
services to those who live in the area of Langley, British Columbia, whether such care
and services are provided by or through the direct or indirect medical services and
facilities of the Langley Memorial Hospital, or through medical research which enhances
those services and facilities.
b) To receive, invest and administer bequests, endowments, trusts and other financial
programs and investments, the purposes of which are to fund the activities of the
Langley Memorial Hospital’s work, or other charitable or community organizations
operating in conjunction with, or with a view to benefiting, the work of the Langley
Memorial Hospital, in the Langley community;
c) To gift funds to the Langley Memorial Hospital, or other registered charities or
organizations that are otherwise qualified donees as defined in subsection 149.1(l) of
the Income Tax Act;
d) To contribute to and support charitable organizations which carry out programs, projects
or activities that, in the opinion of the directors of the Society, meet the purpose
described in subparagraph (a);
e) To do all such things as are incidental or ancillary to the attainment of the above
objects.

LMHF owns Lot 4 which is located near the Langley Memorial Hospital and is currently being
used as a staff parking lot for Langley Memorial Hospital employees. Langley Memorial
Hospital Foundation has stated that the net revenue over expenses from the parking fees is
used for the purpose of providing essential equipment for the Langley Memorial Hospital.

DISCUSSION/ANALYSIS:
Prior to the 2008 property tax year, British Columbia Assessment provided a statutory property
tax exemption for Lot 4 under the Community Charter section 220. In June of 2007, British
Columbia Assessment removed Lot 4 from the statutory exemption list because the lot is not
owned by Fraser Health Authority and the lot needed to be “Designated” for future hospital
purposes by the Minister of Health.

In June of 2008 LMHF inquired why Lot 4 had become taxable for the 2008 tax year. British
Columbia Assessment communicated the reasons to them and advised that they could apply for
a permissive exemption from the Township. LMHF paid their 2008 property taxes in the amount
of $52,091 and the Township did not receive any application for permissive exemption.

In February of 2009 the Township received the letter attached, requesting property tax relief for
the year 2008 in the amount of $52,091 and exemption for future years; 2009 property taxes are
$54,279.
Langley Memorial Hospital Foundation
Page 3 . . .

In May of 2009 the LHMF inquired again to British Columbia Assessment as to why the Lot 4
had become taxable for the years 2008 and 2009. BCA advised LMHF of the reasons and also
advised that they could apply for a property tax exemption from the Township for the year 2010.
The Community Charter does not allow municipalities to refund property taxes duly levied
unless there was a mistake made. In this case, the Township levied property taxes based on
the assessment value determined by British Columbia Assessment, therefore, there was no
mistake made as per Community Charter legislation.

In 2008 the LMHF received about $95,544 in parking fee revenue with expenses of $25,862
resulting in a profit/surplus of $ 69,682 as per the 2010 permissive exemption application
received. Council has the following options which can be funded from the 2009 surplus:
• Provide a grant for the 2009 property taxes amounting to $54,279
• Provide a grant for both the 2008 and the 2009 property taxes amounting to $106,370
• Do not provide any grant for 2008 or 2009 property taxes.

The Township has since forwarded LMHF an application form for the 2010 property tax
exemption and we have received the completed application. The Township will process this
2010 permissive exemption application along with all other 2010 applications for presentation to
Council in September/October of 2009.

Legislation & Applicable Policies:

The Township has authority to grant permissive property tax exemptions under section 224 of
the Community Charter. The Township also has a permissive exemption policy. In accordance
with this policy, each year applications are received by June 30, processed, and presented to
Council sometime in September or October. The permissive exemption bylaw must be adopted
by Council by October 31 of each year for permissive exemptions relating to the following year.

Community Implications and Financial Implications

The revenue forgone for each permissive exemption granted is raised from the rest of the
Township’s taxpayers.

Respectfully submitted,

Hilary Tsikayi
DIRECTOR OF FINANCE
for
FINANCE DIVISION

This report has been prepared in consultation with the following listed departments.

CONCURRENCES
Division Name
FINANCE DIVISION Darlene Foxgord

ATTACHMENT “A” Letter from Langley Memorial Hospital Foundation dated February 19, 2009
ATTACHMENT A