Estevan city councillors expressed a split opinion when a request for a tax reallocation surfaced for another year.
The Estevan Daycare Co-operative filed a request with the City to have their municipal property tax rate reduced from a commercial rate to a residential one, a request the City has approved over the past several years. As a non-profit organization aimed at providing childcare to more than 50 families in the Estevan area, Patrick Sullivan, who made submissions for the Daycare Co-op during the Aug. 11 regular meeting of council, said the tax reduction helps them maintain their service without increasing costs to their users.
It's a debate heard at all levels of government throughout the year for all services: what ratio should the taxpayer share with the service's users?
In the Estevan Daycare's case, paying a residential mill rate instead of a corporate one would save them $5,721.12, or about 1.5 per cent of their total operating budget. If the request is denied, the organization would have to pass that cost onto its users, and Sullivan noted they have had to put more stress on their users already through increased fees, and they continue to operate at a loss each month.
He told council they experienced a staff crisis in 2012 that nearly closed their doors. The increase in fees for their users since that time has already been significant, he said.
When council did vote on a motion to grant the request in 2014, the result was a tie and the motion was lost. The motion included a provision to not provide the tax reduction in 2015. With Coun. Trevor Knibbs absent from the meeting and only six eligible voters at the table, Councillors, Brian Johnson, Greg Hoffort and Mayor Roy Ludwig provided the yeas, while Councillors Lori Carr, Kevin Smith and Dennis Moore provided the nays.
A second motion to deny the request was met with an equal but opposite response, and a final vote on the request will be held at a later council meeting.
In his support of the tax reduction, Hoffort said the group should receive more notice prior to their budget process, noting the organization had good reason to expect the reduction they had in previous years.
Hoffort suggested granting the reduction this year and reviewing the request for the following year, providing enough notification is given for the group to create a budget with the tax rate they know they will be paying.
In the report to council prepared by City treasurer Jeff Ward and City manager Amber Smale, it was noted that the City has denied numerous other tax abatement requests this year given the City's financial position.
Carr said she sympathizes with the day care and noted it would have been better to have the request when the City was completing its budget earlier this year, but added that user fees are going up across the board, even at the public level.
"We are raising rates for all of our citizens to use services within the City of Estevan, and on the other hand, we have an organization that provides a great service to the City of Estevan, but it's not run by us," she said. "I probably won't be supporting (the request) based on the fact that we have a big business to run and we're increasing fees to offset some of our expenses. While I do sympathize, that's my opinion."
Hoffort agreed with Carr's statements but said his biggest issue with denying the reduction is the lack of notification.
In an interview after the council vote on both motions had failed, Ludwig seconded Hoffort's sentiments saying, "It's fair to give them notice. Anytime we have consequences as far as increases, we should try to give fair notice whenever we can."
