Kneehill County council passed third reading of a tax exemption bylaw, which would exempt family medical clinics from municipal property taxes during the regular Tuesday, April 25 council meeting.
Council were first presented with the proposed bylaw during the March 28 council meeting after it was discovered the Kneehill Medical Clinic, which leases a portion of the Kneehill County administrative building for its operations, was not exempt from municipal property taxes under the Municipal Governance Act (MGA) and would need to begin paying some $91,000 in 2024.
“On January 28, 2015, Kneehill County and Trochu Family Medical Association with Three Hills Medical Clinic entered into a Memorandum of Understanding (MoU) with the goal of providing enhanced medical services to the Kneehill region,” explained director of Community Services Kevin Gannon during the March 28 meeting.
Kneehill County administration met with clinic representatives in August 2022 to negotiate the lease agreement, which expired in November 2022; clinic representatives had, at the time, agreed in principle to a negotiated rental rate of $9 per square foot per annum, or 75 cents per square foot per month.
At the time of negotiations, administration was unaware the medical clinic was not eligible for a tax exemption as it is not a non-profit organization.
Once it was discovered the clinic did not qualify, it was determined the negotiated rate would result in a shortfall of approximately $1,623 to cover the tax amount which was estimated at $91,623. This amount is set to commence in 2024.
Mr. Gannon noted the rental rate would need to increase to $9.24 per square foot per annum, or 77 cents per square foot per month, to cover this cost. As the cost of $9 per square foot per annum had already been agreed to in principle, council was presented with the option to pass a tax exemption for family medical clinics which meet criteria outlined in the MGA, such as having one full-time family medical physician, licensed by the College of Physicians and Surgeons of Alberta working at the clinic. This would be a county-wide bylaw and could have potential future impacts if another medical clinic were to open within the county which also met the criteria.
Council gave first reading to the proposed Medical Clinic Tax Exemption Bylaw and also directed administration to arrange a meeting with Kneehill Medical Clinic representatives in order to engage in further discussions.
The item came back for second and third reading considerations during the April 25 council meeting. During this meeting, it was noted a meeting between the county and medical clinic representatives had not yet taken place.
Council unanimously approved second and third reading of the bylaw.