ADMINISTRATIVE REPORT Dated: June 11, 1996 TO: Vancouver City Council FROM: Director of Finance SUBJECT: 1996 Permissive Tax Exemptions - Community Care Facilities RECOMMENDATION A. THAT Council approve the amendment to Bylaw No.7524 authorizing the extension of a property tax exemption to the Calling Foundation for 1996. B. THAT Council approve the grants-in-lieu of general purposes taxes to Community Care Facilities as detailed in Appendix A and amounting to $196,779.24; source of funds to be Contingency Reserve. GENERAL MANAGER COMMENTS The General Manager of Corporate Services RECOMMENDS approval of A and B. COUNCIL POLICY The Vancouver Charter, Section 396, provides Council the authority to approve limited permissive tax exemptions. In February 23, 1995, Council approved the following tax exemption policy for senior s housing and community care facilities: - senior s housing completed before March 31, 1974 continues to receive tax exemption; - permissive tax exemptions to certain Community Care Facilities to be phased out in 1996 and 1997; and - all other facilities to be fully taxable. PURPOSE The purpose of this report is to submit for Council action a grant in lieu of general purposes taxes for Community Care Facilities. Also, there is a recommendation for an amendment to a bylaw recently approved by Council which exempts certain senior s housing properties from taxation in 1996. BACKGROUND Prior to 1974, senior s housing projects that received any form of government assistance were exempted from taxation under Section 396 (1)(c) of the Vancouver Charter, provided they otherwise qualified for tax exemption. In 1974, the Provincial Government amended the Vancouver Charter by adding section 396(1)(g), requiring new senior s housing projects in receipt of provincial subsidies after March 31, 1974 to either: - pay property taxes in the normal manner; or, - obtain a permissive property tax exemption from City Council. A number of seniors housing projects receiving assistance before April 1, 1974, remained tax exempt under a 'grandfather' provision. In 1987, the Provincial Government amended section 396(1)(g), expanding on the types of properties that require annual approval of a permissive tax exemption, with the following results: - the 'grandfather provision for seniors housing projects receiving assistance before April 1, 1974 was eliminated; - the forms of provincial and federal assistance which made projects eligible for exemptions were expanded; - the outright exemption for community care facilities in receipt of senior government assistance was removed. On a number of occasions since the Charter changes discussed above, Council has been asked to approve permissive exemptions on senior s housing projects. To date, Council has maintained a policy of not approving these requests, but has continued the exempt status of the 'grandfathered seniors housing projects. A similar policy has been applied to Community Care Facilities in receipt of tax exemptions before the 1987 Charter change. On February 23, 1995, Council considered recommendations of the Director of Finance related to exemptions for senior s housing and community care facilities. At that time, Council agreed to continue the tax exempt status of the 'grandfathered seniors housing (those facilities completed before March 31, 1974). However, Council decided to phase-out the permissive tax exemption for Community Care Facilities that had previously received this exemption and to not approve permissive exemptions for senior s housing which had not been 'grandfathered'. DISCUSSION Exemption for Seniors Housing On February 27, 1996, Council approved By-law No. 7524 providing an exemption for the 'grandfathered senior s housing projects for 1996. Those properties are listed on that Appendix I. There is one additional property omitted from the bylaw for which the tax exemption should apply. This property had been improperly removed from the list. Legal Services has been asked to prepare and submit a bylaw that will amend Council s original approval by adding this property to the bylaw. Community Care Facilities When considering the report of the Director of Finance on February 23, 1995, Council also approved the following recom-mendations related to Community Care Facilities: B. THAT Council approve 1995 permissive property tax exemptions for the 'Community Care Facilities' properties (shown in Appendix II of that report.) C. THAT Council approve a phase-out of the permissive tax exemptions on the 'Community Care Facilities' properties (shown in Appendix II of that report ) commencing in the 1996 taxation year . . . and instruct staff to give the affected property owners appropriate notice of this change in policy. On March 7, 1995 By-law No. 7395 was passed exempting these properties from municipal taxation for the 1995 tax year. For the 1996 taxation year, it was proposed that these Community Care Facilities (listed in Appendix A) would not receive a property tax exemption but would receive a phase-out grant equal to the municipal portion of their tax bill. Administratively, this would be handled by refunding the City's portion of the property taxes to the property owners in the form of a grant under Section 206 of the Vancouver Charter. Approval of these grants would reduce the property owner s 1996 property tax bill by approximately 50%. If this grant request is approved, the funds will be applied against the 1996 Property Taxes due on July 17, 1996( extended due date ) or, if already paid by the date of receipt, refunded to the taxpayer. The 1996 Property Tax statements for these properties were mailed the week of June 17th, 1996 together with a letter stating that this report requesting the grant would be heard at this June 25, 1996 Council meeting. FINANCIAL IMPLICATIONS The grants to community care facilities are put for Council consideration in Recommendation B and will require eight votes to pass. Should Council approve the grants, the cost will be $196,779.24 with funding to be provided from Contingency Reserve. * * * * *