Estevan city council has moved one step closer to reducing the so-called property tax gap that exists between residential and commercial properties.
Council gave first reading to the mill rate factors bylaw at their meeting on Monday night. The bylaw governs the rates of taxation for residential, commercial and industrial buildings in the city.
The mill rate factors for residential buildings are scheduled to increase from .71 to .73, while the commercial mill rate factors will decline from 1.61 to 1.58.
The move comes about six months after a report from the Canadian Federation of Independent Business (CFIB), which calculates the property tax gap.
Estevan had the second-highest gap in the province at 3.29, with residential property taxes of $1,109 for a property assessed at $200,000, and commercial property taxes of $3,652 for every $200,000 in assessment.
Jeff Ward, who is the city manager and the acting city treasurer, said they want to encourage business growth in the community.
“Obviously we want to narrow that gap and make it fair for all residents of the city,” said Ward.
Council approved a mill rate increase during the budget discussions in January, but they can’t finalize the mill rate factors until the spring. Residential property owners will incur a five per cent increase on their municipal property tax bills. Ward said there will be an increase of $162 in property taxes for a house worth $350,000.
The overall taxable levy for the city this year is $14.67 million.
Council also gave first reading for the health levy bylaw. The levy was introduced several years ago to help with Estevan’s physician recruitment and retention efforts, but is now used to pay for the city’s $1.3 million contribution to the new regional nursing home in Estevan.
The levy will generate about $290,000 this year, with $240,000 going towards the new nursing home commitment.
“Once we meet the obligation of $1.3 million (to the new nursing home), we should be able either reduce that health levy, or see what the council of that day wants to do with it,” said Ward.
The remaining $50,000 will be directed to the St. Joseph’s Hospital Foundation.
Second and third readings are scheduled for council’s next meeting on May 30.
Council gave three readings to a bylaw that will authorize $1.6 million in borrowing, which will cover the cost of repairs on Kensington Avenue North and Milne Crescent, and new culverts on Souris Avenue North.
“To keep continuing to get works done such as Milne Crescent and Kensington Avenue, you still need to borrow term loans out,” said Ward.
The city will also pay back $4.1 million in debt, meaning their net debt repayment will be $2.5 million. Ward is hopeful the debt load will be around $30 million this year.
“I’m putting together a debt repayment plan over the next 10 to 15 years, so that we can keep doing major important projects that require $1.5 million to $2 million (in borrowing), but still reduce our debt and make our city more viable for the future.”
