Estevan property owners are going to have to dig deep when they pay their taxes this year.
City council passed the 2013 mill rate at Monday's regular meeting and announced that property taxes for both commercial and residential property in Estevan will rise by two mills, or roughly 10 per cent. The increase is expected to bring in an additional $1.7 million in tax revenue.
Mayor Roy Ludwig said the increase, which is the largest single hike in years, was due to the major rehabilitation project on the north section of Highway 47 through Estevan. As The Mercury has reported previously, the City and province have reached a cost-sharing agreement to repave the dilapidated sections of the road. The project is now estimated to cost around $4 million.
Ludwig said council did not arrive at the decision lightly but felt they did not have a choice with such a big project on their hands.
"We did a lot of soul-searching and countless meetings. We have been talking about this since last year actually," Ludwig said following Monday's meeting. "At the end of the day we needed the money to do the job, we knew we had to do the job, and although the province is coming to the table to help us, we have to have the monies in place."
Although the City has been fighting to keep up with their infrastructure work over the past decade, council has largely frowned on the idea of a large tax hike in one year. Ludwig said with so many needs on the infrastructure side it was felt a large increase was the only way they could begin to get control of the situation.
"It's not something that anybody likes and it's not something, believe me, that we took lightly but at the end of the day, to start to get ahead of the game, it's something that was necessary.
"Looking forward, we can set aside some money and unless something unforeseen comes up, we will be looking at not only paying our debt down but also putting serious monies aside for doing our infrastructure work. We are hoping that moving forward we can go back to incremental increases, I would say half a mill a year is what I would like to see, but it will depend on where we are at when that time comes. But after this sizable increase to get control of our infrastructure deficit, we do see things calming down."
Ludwig added that if the Highway 47 project wasn't on their plate this year council could have raised taxes by half a mill but would have been limited as to how much work they could complete this year. He said that wasn't palatable to council or to residents who have expressed a desire to see tangible progress on road repairs.
Still, it remains to be seen how residents and business owners will react to such a large increase in a year in which a number of people saw their property assessments increase sharply. Asked if he felt it was fair to force such a big hit upon taxpayers in one year, Ludwig reiterated the increase was the only way to start making progress.
"We have to start getting serious with this, we honestly do," he said. "As unsavoury as this is to all of us, this council does not see any other choice."
Ludwig said the need to rehabilitate Highway 47 also forced council to make tough decisions in other areas. He noted the scheduled work on the south portion of Milne Crescent was pushed until 2014, which saves them $600,000. As well, they will only do one lift of pavement in the parking lot of the Estevan Leisure Centre in 2013, which should them save them $400,000. The money allocated for both jobs will now go towards the Highway 47 project.
The 2013 budget was also presented at the meeting and the City is projecting a surplus of $459,857.
Ludwig said council put a great deal of work into the budget, going through it four different times to get to the final document.
"We did a lot of cutting on the budget, capital especially. Operations, you can only cut so much. We went over the numbers and saw what we needed for highway improvement and the money just wasn't there."
