Township of Langley civic facility. (Langley Advance Times files)

Township of Langley civic facility. (Langley Advance Times files)

$48 million drop in revenue forecast for Langley Township in 2020

Council could face 25 per cent of property owners not paying tax this year

Langley Township can remain solvent even if it loses $48 million to non-payment of property taxes this year, according to a report to be presented to council Monday, May 11.

The report, prepared by the Township’s finance division, notes that it is difficult now to predict how many property owners may not be able to pay their taxes or utilities at the same level due to the economic impacts of the coronavirus pandemic.

Right now, the Township is using a model that assumes a collection rate of 75 per cent compared to last year – which would mean $48 million in lost tax and utility revenue.

“Ever 10 per cent variation in the collection rate equals $10 million,” the report notes.

“We really don’t know what’s going to happen,” Mayor Jack Froese said of the coming year.

The Township council is expected to discuss the report in its meeting, starting at 1 p.m. via livestream and accessible via the Township’s website.

READ MORE: Langley mayors worried about financial impact of COVID-19

The Langley School District has helped by deferring the requirement that the Township pass along the annual school tax payment, usually due in July, to December.

Without that deferral, the Township’s cash flow would dip into negative levels by August, the report says.

Froese said there are some people making payments through their mortgages or via monthly payments, so the Township has collected some revenue already. But some property owners stopped their monthly payments.

He’s encouraging those who can’t pay but can make use of provincial deferral programs to do so.

“That’s a good way to go, because the province pays the taxes,” he said.

The homeowner will still owe the taxes to the province. Those over 55, surviving spouses, and people with disabilities qualify for the proram as homeowners.

POLL: Will you be able to pay your property taxes this year?

The Township has also saved by shutting down all its recreational facilities. But staying in the black would mean the rec centres stay closed to the end of 2020.

“If the Township fully staffs and opens facilities prior to the end of the year, there is no guarantee patrons will return at levels high enough to provide revenue to fund increased costs,” the report says. “This is a budget risk.”

The report notes that while it’s expected that tax revenue will come in eventually – even if late – some money is “gone for good.”

Closing down rec facilities means a loss of $8.1 million in revenue. That’s offset by the $8.2 million in savings to payroll from shutting down facilities and laying off workers.

There will also be savings in facility maintenance, electricity and natural gas.

On the roads side, TransLink is putting off some of the road maintenance funding it shares with municipalities, which could be a loss of up to $3.7 million to the Township.

One bright spot – development revenue is expected to increase this year, as developers rushed to pay for development applications and building permits before increases in development cost charges fees were to be introduced. However, revenue will likely drop in 2021 after the changes.

Last year, the Township collected 93 per cent of property tax on time by the July 2 deadline, and 96 per cent by the end of the year.

A late-payment penalty, usually 10 per cent due if payment didn’t come by July 2, has now been reduced to 1.75 per cent, with the remaining 8.25 per cent deferred until mid-November as a relief measure.

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