Two weeks after Estevan city council failed to reach a majority decision on whether or not to grant the Estevan Daycare Co-operative a tax reallocation, council voted in favour of approving the local nonprofit's request.
For years, the day care co-op has requested and a received a change in how they are taxed at the municipal level. Operating in a commercial zone, the organization has in the past been taxed at the residential mill rate.
In the last five years, this has saved the day care about $12,646, and this year it will save them $5,721 or about 1.5 per cent of their operating budget.
With one councillor absent from the Aug. 11 council meeting when this matter first came up and motions were voted on, the result was a tie.
At a regular meeting of council on Monday evening, Coun. Greg Hoffort made a motion to grant the request, and he, along with Mayor Roy Ludwig and fellow councillors Trevor Knibbs and Brian Johnson, voted to grant the reduction in tax for the day care.
Councillors Kevin Smith, Lori Carr and Dennis Moore voted against the motion, as the submissions from the City's administrators recommended.
While council approved the tax reduction for this year, it was made with the intention that the City was giving notice to the day care that it should not expect to receive the same reduction next year.
Providing appropriate notice was of primary concern for the councillors who chose to grant the request this year.
In making his motion Hoffort said, "Due to the fact that in previous years they had received the lower tax rate and would have expected to see the same for this year, I move that we provide them with the residential tax assessment."
After the matter came up for the first time and council was unable to come to a decision, Ludwig agreed that giving notice is important for the City to do when changes are coming.
"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."
The recommendation from the City manager and treasurer cautioned council on implementing "one-off" tax policy decisions as they may have a "long-term impact on the taxation structure without proper reviews of those impacts and costs to all ratepayers."
At the Aug. 11 meeting, Carr noted there is a growing discussion at City Hall about the share of costs users and taxpayers are expected to cover and that the City is raising its rates for services in order to keep up.
"We have a big business to run, and we're increasing fees to offset some of our expenses," she noted.
The recommendation noted the City has denied several other tax abatements this year due to the City's current financial position.
