Buffalo Point Cottage Owners
Minutes of AGM May 19, 2013 at 10:00 a.m.
1. Lee Delorme welcomed everyone to the meeting and gave thanks to the directors and the members of the sub-committees for all their dedicated and hard work. Lee went over the agenda and a few amendments were made and approved.
2. Lee then introduced Linda Brown, who gave a brief presentation on the annual picnic. The picnic has been changed to July 6, 2013. Linda asked for volunteers for the picnic and for a co-ordinator as she is stepping down from that position. She also asked for donation of prizes for the silent auction. Linda will receive these donations.
Lee then introduced Paul Edwards.
3. Paul Edwards, our association legal representative, gave the group an update on the legal proceedings. Please refer to pages 6 and 7 of this document for a written summary of the litigation update. Paul outlined that the court proceedings should continue to ensure that the democratic rights and interests of cottage owners is preserved within or without a property tax regime. Since 1976 when the Buffalo Point resort got its start from Doug Struthers and his colleagues from the Lake of the Woods Investment Company, cottage owners have had joint participation with the BPFN/BPDC in the annual budgeting process and the approval of capital projects which benefited cottage owners. Any disputes always maintained a binding arbitration option which was evidenced in the 1999 year’s disagreements over annual maintenance fees, so our current litigation process is not new to the BP resort. Disagreements also arose in the 2007 year stemming from disagreements over the lagoon upgrade and subsequent assessments. This latter disagreement lead to the negotiation of the 2008 agreement which was designed to be a long term cooperation arrangement and it is this very same agreement that the BPFN/BPDC is attempting to nullify via the property tax regime.
Paul outlined the next steps going forward and gave the group anticipated target dates for court hearings. The next court hearing is set for May 31, 2013 wherein we oppose the BPFN/BPDC’s injunction against the association’s arbitration rights under the 2008 agreement. Details are as follows:
Law Courts Building
408 York Ave
Paul fielded many questions regarding the various litigation processes and the property tax regime.
4. Lee Delorme, association president, made an additional presentation regarding the litigation processes and the most recent propaganda mail out by the BPFN.
a). Lee emphasized that much like we recommended in the July 2012 town hall meeting, it is essential that the association membership remain united and follow the recommendation of legal counsel as well as the advise our our political representatives. In this regard, Lee passed along regrets from Senator Don Plett who was originally scheduled to speak at the AGM on behalf of Minister Vic Toews and himself however, he was in attendance this weekend at the funeral for long time associate Senator Findlay.
b). Lee advised the group that two court decisions were recently posted on the association website, buffalopoint.org and encouraged cottage owners to read them. One case relates to our federal court case wherein the BPFN challenged the BPCOA right to represent the cottage owners in a judicial review, so if the tax system is so fair and equitable why is the BPFN challenging this basic right.
c). Lee also reminded that group that at the beginning of the tax regime we were given three basic conditions for the property tax regime.
1. There would be no school tax and we essentially received an unofficial school tax with the first year mill rate of 30.97
2. A no discrimination clause, i.e. all owners and residents would be subject to tax. Last month the FNTC approved the BPFN’s right to exempt all properties owned by the BPFN and the BPDC including the marina, golf course, convention centre, etc. This effectively leaves the cottage owners as the sole taxpaying base which includes small number of First Nations cottage owner.
3. A Taxpayer Representation Law (TRL) that would not only rival our rights and benefits as outlined in our 2008 agreement but enhance them. We have no TRL and the BPFN has filed an injunction against our request for arbitration under the 2008 agreement.
Lee also reminded the group that Mr. Thunder signed the 2008 agreement on behalf of the BPFN as well as the BPDC. He also paid 50% of the legal costs to draft the agreement. He nominated his representatives to our Community Committee. Furthermore, he agreed to the two year freeze on the annual assessment fees using the 2008 agreement and adhered to the agreement albeit for the first year only. The 2008 agreement was also worded to have it apply to the determination of annual maintenance fees or taxes.
d). Lee briefly addressed the most recent propaganda mail out that cottagers received this week. The BPFN is advocating the broad range of government services provided by the new tax regime. lee did a comparison of the budgets negotiated with the BPDC in the recent two year freeze with the budgets approved for the BPFN under the tax regime. The categories of services remain the same and the dollar amounts are comparable the only differences are as follows:
1. in the 2008, agreement cottage owners pay 55% of government services and the BPDC/BPFN pay the remaining 45%. It is now apparent that cottage owners are being expected to pay 100% of the government service costs.
2. added administration costs and executive salaries relating to the tax system
3. official contingency capital reserves versus the unofficial reserves as provided for in the 2008 agreement
It is also worth noting that Aboriginal affairs pay the BPFN $200,000 to $300,000 in community infrastructure monies every year as well.
e). Lee also outlined reasons for continuing our litigation efforts:
1. preservation of our democratic rights as provided for in the 2008 agreement
2. correction of all property tax errors and excess taxation. For example, Bob Brown the assessor testified at the appeals tribunal that a revised and all inclusive assessment roll was being issued to the BPFN to include all unsold lots and omitted BPFN properties so that revised tax billings could be made. We have still not seen the revised tax assessment roll nor have we been advised of any tax reassessments for the 2012 year.
3. reverse the collateral damage done to property values since the introduction of the tax regime which is by all accounts in the 20% range
4. taxation without representation decreases property values
5. the 2012 mill rate of 30.97 and the 2013 mill rate of 17 are still not comparable to mill rates in the RM of Piney at 13.12 and 13.6 respectively
6. no dispute resolution options. Lee reminded the group how upset cottage owners were at the 2007 lagoon assessment for $2000. The paving of roads, city water, city sewer systems are possible infrastructure projects under a property tax regime and the corresponding lot assessments would far exceed the lagoon assessment.
7. the mill rate will not in all likelihood stay at the 17 range because for the following reasons:
-gross revenues generated from cottage owners using the 2008 agreement = $290,000
-gross revenues generated from cottage owners using a mill rate of 13.12 = $305,000
-gross revenues generated from cottage owners using a mill rate of 17 = $414,000
Consider the costs of administering a property tax regime, i.e. costs for executive and tax administrator positions, property tax assessors, appeal tribunal, audit and accounting and other administrative costs. In other words, the net cash benefit to the property tax regime with the sole tax base being cottage owners is questionable?
8. Pay lawyers $1000 today versus paying excess taxes for 70 years under a sub-lease
5. Cottagers were asked to vote on the following recommendation from the lawyer and the association executive by a show of hands using one vote one cottage basis:
- A vote to continue the litigation processes as outlined by Paul Edwards along with a further financial contribution of $400 per cottager for the litigation fund?
BY A SHOW OF HANDS THE MEMBERSHIP IN ATTENDANCE OF WELL OVER 200 PEOPLE UNANIMOUSLY ENDORSED THE RECOMMENDATION.
In view of the fact that the 2013 tax bills is due by month end and coupled with the fact that the majority of our court actions will take place in August/September/October, members were provided with the following payment options:
- one current cheque for $400
- four monthly post-dated cheques for $100 each starting June 1st
- eight monthly post-dated cheques for $50 each starting June 1st
Cheques can be mailed to the BPCOA at PO Box #1082
6. Secretary Report by Gloria Jackson, motion to accept the minutes of 2012 AGM as posted on the Buffalo Point Cottage Owner’s Website. Motion was seconded and carried.
Gloria, also, asked for email addresses of cottage owners as this is a very quick and efficient means of communicating.
7. Financial Report by Veronica Johnson, motion to accept the Financial Report as read. Motion seconded and carried.
8. There were two vacancies of officers on the board. Motions to nominate Mike Millner and Tim Picken were made. These nominations were seconded and carried.
9. Tim Picken talked about the Manitoba Association of Cottage owners and the advantages of joining. Vote was taken as to whether to join this association. The outcome of this vote was to join the Manitoba Association of Cottage Owners. Tim Picken was going to look after this.
10. New Business
a. Media contact and public demonstrations
Lee advised the group that under advice of counsel, we have rejected requests from the media for interviews and news releases thus far because our resolution will be in a court of law and not in the public arena. Similarly, the same principle applies to various forms of public demonstrations and displays of civil disobedience. After some brief discussions, a vote was taken and it was basically unanimous that the status quo should be maintained.
b. Jim Strandlie spoke of how things have played out in history, when there are taxes with no representation and maybe what a few of our options are going forth.
11. Announcements –
Gloria Jackson spoke of the Ladies Golf starting on May 21 depending on the weather, and all ladies are welcome to join.
She also spoke of the upcoming CancerCare Tournament that the Ladies Golf league puts on every year. This year the date is August 9, 2013 and for the ladies to get their paid entries in soonest as it fills up very quickly. We, also, would welcome any sponsorships or donations of support and prizes.
Lee asked for a volunteer to organize the Cottage Owners golf tournament.
12. Lee thanked everyone for coming and the meeting was adjourned.
BUFFALO POINT COTTAGE OWNERS ASSOCIATION ANNUAL GENERAL MEETING – MAY 19, 2013
UPDATE ON BPFN PROPERTY TAXATION LITIGATION
In June of 2012, the BPFN in conjunction with the First Nations Taxation Commission (“FNTC”) imposed a system of property taxation on the members of the BPCOA. Despite various explicit public promises that were made by both the BPFN and the FNTC, the new laws imposed an unacceptably high tax rate and purportedly nullified or restricted all previous legal agreements between the BPFN and/or the BPDC on the one hand and the BPCOA and/or the individual cottage owners on the other. According to the BPFN, under the new laws the BPCOA and/or its members are not entitled to any meaningful participation or real influence within the taxation system, or with regard to how much they would be made to pay. Therefore, it was decided that the BPCOA would use all of the legal tools at its disposal to force the BPFN and BPDC to adhere to the legal agreements and promises they made respecting the cottagers and the BPCOA. The 2012 property taxes were paid under protest and various legal proceedings were initiated. They are:
1) Arbitration under the Individual Sub-Leases (Manitoba Court of Queen’s Bench)
Each cottager was asked to sign a “Referral to Arbitration” form and submit it to the BPDC, their landlord. By doing so, each cottager was asserting their rights under their lease to have an independent panel of three arbitrators determine if the imposition of the new tax laws was a breach of the terms of their lease. Each individual form submitted by the cottagers nominated the same arbitrator to the panel of three that will hear the case, the intent being that only one arbitration proceeding would be needed to decide the issue.
The BPDC responded to this by beginning a Court action to halt the arbitration before it began. The BPDC argued that the arbitration proceedings were invalid, because it was the BPFN that was charging the tax and not the BPDC; further, the BPDC said that it was permitted to choose to stop charging the cottagers annual fees as it had in years past, instead allowing the BPFN to start charging property tax.
This Court action resulted in two appearances in Court, on the 22nd of August and on the 24th of September, 2012. By decision dated December 20, 2012, the Court decided that the arbitrations could go ahead. The full decision of Mr. Justice Martin, which is very supportive of the BPCOA, is available here: http://canlii.org/en/mb/mbqb/doc/2012/2012mbqb341/2012mbqb341.html
The BPCOA was awarded costs in this action, although they have yet to be paid. The arbitration has been held off until a result in the Court action that was initiated under the 2008 Agreement has been determined (see below).
2) Arbitration under the 2008 Agreement (Manitoba Court of Queen’s Bench)
On August 21, 2012, the BPCOA initiated a Court case to force the BPFN and BPDC to go to arbitration under the 2008 Agreement, which is the agreement in place designed to govern the relationship between the BPFN, BPDC, and the cottagers. A key component of the 2008 Agreement is the cooperative setting of amounts charged to the cottagers, with recourse to an independent arbitrator in the case of disagreement. The BPFN and BPDC are now refusing to recognize the validity of the 2008 Agreement. This matter went in front of a judge on February 7, 2013, at which time the judge strongly recommended that the parties make an attempt to negotiate a solution rather than proceed with litigation; it was therefore agreed that a “Judicially Assisted Dispute Resolution” or “JADR” would be tried. (See below for a brief summary of the JADR.)
Following the failure of the JADR, the hearing was rescheduled to Friday, May 31, 2013, at 10:00 a.m. at the Winnipeg Courthouse for the judge to hear arguments. A decision is typically released 4 to 6 weeks after a hearing, although this can be longer in the summer. The decision will be uploaded to the BPCOA website when it is released. The judge will only be deciding if arbitration can proceed under the 2008 Agreement, not the larger issue of whether or not the BPFN’s tax laws breach the 2008 Agreement.
3) Judicially Assisted Dispute Resolution
Due to the confidential nature of settlement negotiations, we cannot provide specifics of the negotiations. Both sides met with a Queen’s Bench judge, once with the BPCOA and BPFN representatives present (April 15, 2013) and once with just the lawyers present (April 22, 2013). The parties were unable to reach an agreement, and therefore the JADR was terminated in favour of proceeding with the hearing now scheduled for May 31st.
4) Statement of Claim (Manitoba Court of Queen’s Bench)
On the 9th of January, 2013, the BPCOA filed a Statement of Claim in the Court of Queen’s Bench on behalf of all of the members of the BPCOA. This was done for the sole reason that the new BPFN tax laws contain a section that states that all taxes paid, even though they may have been paid under protest, are deemed to have been paid voluntarily and will not be refunded if within 6 months of payment the taxpayer doesn’t file a claim to get the taxes back. Therefore, in order to preserve the right to claim back the taxes that were paid under protest, a claim was filed. This claim is not being pursued at this time, because if the cottagers are successful in the arbitrations or in Federal Court, there will be no need to do so. This claim may never be needed and can be discontinued easily.
5) Judicial Review of the FNTC’s approval of the tax laws (Federal Court of Canada)
The Federal Court provides a process where a person who disagrees with the decision of a Federal decision maker (the FNTC in this case) can ask to have that decision reviewed by a judge, who can undo things that were done incorrectly or unfairly. In late July of 2012, the BPCOA initiated such a review, asking the Court to declare the decision of the FNTC to approve the BPFN tax laws invalid.
The main issues for the Court to consider are the repeated and well documented representations that the FNTC (and the BPFN) made to the BPCOA and the cottagers about how any new tax laws would apply to the cottagers, as well as the FNTC’s failure to adequately review and assess the BPFN’s laws prior to approving them.
The BPFN has employed procedural tactics to delay having this case heard. First, it challenged the ability of the BPCOA to represent the interests of the individual cottagers by bringing a motion to dismiss the case for lack of proper standing (this was Sept/Oct, 2012); second, it brought another motion asking to be permitted to file evidence related to actions that the BPFN had taken since the time when the Judicial Review was filed (this was March/April 2013). The BPFN was completely unsuccessful in both of these motions and costs were ordered against them, however they have still resulted in delay and additional cost. The BPCOA has just recently come into a position to have the Judicial Review set for a hearing, which we hope will take place at the end of the summer or in early fall.