Sunday, January 9, 2011

Should the entire Wincheste Medical Center campus be tax exempt?

If you agree that the entire Winchester Medical Center campus should not be tax exempt, then contact and/or forward this Open Forum written by Paul Hampton onto your respective council representative.

Forward this e-mail onto your friends and neighbors who are residents within the City limits.

City Council is voting on an ordinance to deny or approve the entire WMC campus tax exempt Tuesday night, Jan. 11th at 7pm.

City Council members:

Tuesday night's agenda ... reference Pages 27-30: 


Open Forum: VH's 'community benefit'
October 23, 2010
By Paul Hampton

City pays entire exemption, but does it get entire 'benefit'?

Valley Health has become a large corporation and expanded beyond its WMC "not-for-profit" hospital business.

News reports and Valley Health executives paint a picture of a $1 billion corporation with six hospitals and 5,500 employees serving 18 counties in three states. It is a health-care corporation that has also expanded into services already offered by numerous small businesses, including dentistry, physician offices, Quick Care storefronts, eye surgery, home care, ambulance service, and wellness centers.

For more than a year Valley Health executives seem to be fixated on keeping its ever expanding health-care businesses at its WMC campus under a tax-exempt umbrella. City government officials have commendably been trying to limit the potential expansion of tax exemption for Valley Health's business expansion on the WMC campus and off. It is clearly a concern of local government to seek a fair balance, under the law, between the interests of its citizens and local businesses.

When only 12 percent of WMC campus patrons are Winchester residents, does it occur to Valley Health that the issue of fairness bears consideration since they pay 100 percent of its $2 million tax exemption? What percentage of WMC's 2,900 employees are Winchester residents? Were Valley Health acquired by a larger corporation, what percentage of the billion(s) or so proceeds would go toward Winchester's "benefit"?

By comparison, its $2 million tax exemption represents about 3 percent of Winchesters annual budget, versus .2 of 1 percent of a $1 billion corporation. It costs each of Winchester's 25,000 residents $80 a year to make up the difference. It's only equal to the total salaries and benefits of the top three Valley Health executives, according to a 2008 report.

Why is Valley Health taking on Winchester and its residents? Why should a year-old dispute over the $57,000 payment in lieu of taxes for the Wellness Center balloon into a $2 million dispute? Would it be fair for Valley Health to seek tax exemption for all future expansions? Isn't there a better way than seemingly trying to squeeze everything it wants out of Winchester residents?

Why not use its heft to help find us relief? With lobbying talent in its employ and its courting of elected officials, couldn't Valley Health enlist officials like Del. Sherwood or Sen. Vogel to work on a way to find relief for Winchester residents? It's just this kind of David vs. Goliath situation that seems to be a proper role for state government to help localities achieve a fair result.

It would seem like in the meantime that Valley Health would see it in its interests to help Winchester provide services and infrastructure that help sustain and protect its campus. It would also seem to be in Valley Health's interest to help Winchester maintain services that keep this an attractive place for Valley Health's prospective professionals and employees to live.

Paul Hampton is a resident of Winchester.




Hospital request for tax exemption also on docket

January 8, 2011
By Vic Bradshaw


More background info on Winchester City Council's upcoming vote for an ordinance to deny or approve the entire Winchester Medical Center campus as tax exempt this Tuesday night, January 11 at 7pm in Rouss City Hall.


WMC ruled not tax-exempt
City Council votes 7-0 to authorize first-half real estate tax bill of more than $1 million

September 29, 2010
By Vic Bradshaw





58.1-3603 Exemptions not applicable when building is source of revenue

58.1-3605 Triennial application for exemption; removal by local governing body

58.1-3606 Property exempt from taxation by classification

58.1-3650 Post-1971 property exempt from taxation by designation

58.1-3651 Property exempt from taxation by classification or designation by ordinance adopted by local govern...




Burkholder: No 'qualifying exemption' met by WMC
September 30, 2010
By Ann T. Burkholder
    
Tax questions regarding Valley Health and/or Winchester Medical Center have comprised a significant portion of my workload over the past lively nine months as Commissioner of the Revenue.

On Jan. 27, 2010, (City Attorney) Tony Williams, staff member Tina Butler, and I visited the Wellness Center in response to Valley Health's protest of the personal property tax and business license taxes of that site. At the time, Todd Way of Valley Health also asked about the questionnaires regarding the initial triennial review of tax-exempt properties, any need to apply for exemption of the new Diagnostic Center, and options for minimizing tax discussions regarding future construction and usage charges.

Consequently, Valley Health submitted an application for real estate tax exemption for the WMC campus in February 2010, which was scheduled for review at the March 23 City Council work session. Upon seeing the recommendation of the Assessor and Commissioner of the Revenue that Valley Health be denied a blanket exemption, Valley Health then withdrew its application. By filing and subsequently withdrawing this application, Valley Health clearly demonstrated its own awareness that no clear and irrefutable tax exemption exists for the WMC campus.

Since then, the city and Valley Health have gone back and forth on the matter, accelerated by recent meetings between the two parties. In a letter dated Sept. 2, James Daniel, attorney for Valley Health, wrote, "We understand that it is not in dispute that charitable, nonprofit, Virginia hospitals are exempt by classification from local real estate and personal property tax."

I do not agree with this statement; rather, whether Valley Health/Winchester Medical Center qualifies for exemption under that section of the Code of Virginia is specifically what is in question. It is the position of this office that the entity is subject to taxation unless City Council enacts a classification or designation otherwise.

It is likely that the City of Winchester considered the original Winchester Memorial Hospital, on the Stewart Street site, and the naissent Winchester Medical Center to be tax-exempt under liberal interpretation of the language of the 1902 Virginia Constitution. While post-1971 updates to the Code of Virginia include stricter guidelines, nothing has been found which clearly establishes WMC's entitlement to tax exemption under either the current or earlier version of the Constitution.

While correspondence from prior administrations suggests that the issue was examined, by all parties' accounts, the mission and business of today's Winchester Medical Center have substantially evolved from the hospital of yore. As a result, the commissioner has little basis on which to conclude that ownership, use of the property, and, in fact, the property itself, are the same as when the exemption initially came into use.

On Sept. 23, Valley Health officials held a press conference at the Wellness Center to discuss their 2009 Community Benefit Report. As stated by the Valley Health Board Chair, the point was to show what Valley Health gives to the community in lieu of paying taxes. Of the $71.3 million in benefits claimed, over 63 percent consists of bad debt expense and Medicare Reimbursement Shortfall, both of which more accurately fall under the cost of doing business.

Valley Health avers its not-for-profit status and charitable contributions undermine any claim of ineligibility for exemption, yet neither point is relevant to the matter at hand. Not-for-profit does not automatically equate to non-taxable. Moreover, while the City of Winchester is very appreciative of the generosity and community benefits provided by Valley Health, these are not a substitute for the benefits provided by tax revenue. Here in the city, we are blessed with many citizens and businesses that willingly donate goods, money, and services to designated charities, yet also pay their fair share of local taxes for the common good.

Assisted by the City Attorney, City Assessor, and my staff, I have reviewed applicable state and local code, local records of council action, numerous legal opinions and proceedings, and information provided by Valley Health. Considerations in evaluating tax-exempt status have included:

Categories of taxation, to include real estate, gross receipts business license and personal property taxes.

Usage of real property, including undeveloped land, property leased to outside entities, and property used for personal and professional services.

Variety of business units operating under Valley Health, including traditional hospital functions, as well as those in direct competition with fully taxable entities, such as the Wellness Center and physician office practices under Valley Physician Enterprise.

Fair and equitable distribution of local taxpaying responsibility, recognizing that Valley Health will continue to expand its vision, mission, and revenue stream.

The role of Valley Health as a valuable community partner.

At this point, my findings indicate the property and activities of the WMC Campus do not meet any qualifying exemption by classification or by designation and thus are taxable. Within the next two weeks, absent compelling evidence to the contrary, my office will begin preparing the current year real estate tax bills for the WMC Campus and will proceed with other applicable billings.

Ann T. Burkholder is commissioner of the revenue for the City of Winchester.


WMC had a profit total of $311.7 million for years 2000-2008
This website: http://www.faqs.org/tax-exempt/VA/Winchester-Medical-Center.html# has profit figures that were documented for years 2000-2004 as the Winchester Medical Center had a 9yr profit total of $311.7 million during years 2000-2008.


VHS serves 18 counties to be exact in VA, MD and WV. 
Is it fair to the citizens of Winchester for Valley Health System to take millions and millions of dollars made locally tax free to reinvest across state lines?  

VHS is basically constructing on average $30 million dollar mini hub hospitals in Berkeley Springs WV, Romney WV and Page County.

Valley Health's statement on the regional communities that it serves:

WMC provides a range of services for its communities which includes clinics and support programs.

All of these items give patients access to leading edge technology and state of the art service, and to experience high quality patient care that is close to where they live.

These activities are overseen by WMC's BOD's, comprised mainly of independent community members.

The population has increased from the previous year from 951,209 to 959,447 in 2008.

The female population for 2007 was 479,624 and the male population was 471,585 in 2007.

The population numbers for 2008 show that females increased to 483,523 and the male population increased to 475,924 for 2008.

The regional community that VH serves is widely diverse.  The regional community racial ethnic breakdown in the communities served by VH is as follows: 84.2% White, 4.8% Black, 1.7% Asian, 1.5% Multiracial, 1.2% other, 0.2% Native American and 3.3% Hispanic for 2008.

The total population per race or ethnicity increased significantly from 2007.  Give the general location of facilities, WMC serves several migrant worker communities during harvesting of crops for the local farmers.

There is also an aging population that WMC serves with several of its communities.  As the baby boomers grow older, more and more medical care will be needed and provided by WMC.

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