Three Melville hotels and motels received a nasty tax surprise this summer and they want the city to correct what they see as a mistake.
Representatives of the Waverley Hotel, Melsask Motel and Classic Inn told council during its meeting last Monday their establishments received tax hikes several times higher than the 20-per-cent cap they thought was in place. The trio was part of a larger delegation of almost all Melville hotel and motel owners, which complained to council last summer that the 2009 reassessment had caused their tax bills to jump as high as 200 per cent that year. That realization caused council to create a special mill rate sub class for hotels and motels. After receiving similar complaints from the owners of some of Melville's most expensive homes their taxes jumped a similar amount, councilors capped tax hikes at 20 per cent.
At last Monday's meeting, Waverley Hotel owner Brian Hicke told council all three owners were under the impression the 20-per-cent tax hike cap was also in effect this year.
However, he says, after receiving their tax notices earlier this summer the owners realized they were wrong. And Hicke says if their taxes have jumped that much while the rest of city has not, the hotels and motels are being unfairly targeted. "If there's no more 20 per cent (cap) for that sector someone is getting a huge reduction. We were under the impression after last year you had capped increases at 20 per cent but the reality is much, much more than that."
The Waverley's taxes jumped from $5,470.22 in 2009 to $14,078.26 this year. The Melsask had a hike from $2,742.12 to $6,644.29 and the Classic's taxes jumped from $13,836.86 to $24,428.72.
The Saskatchewan Assessment Management Agency (SAMA) does a reassessment every four years to account for property improvements and changes in market value. However, the assessments rarely change during other years.
Coun. Ken Karius agreed the hikes seemed unusual and asked Hicke if he knew of any reason that happened this year. Hicke told Karius his business was the only one of the three to see an assessment hike this year.
SAMA ruled the Waverley had made equipment improvements and hiked the value of his property. Hicke says he would have challenged that ruling but past experience with SAMA appeals have revealed the practice to be frustrating and a waste of time.
"They said I have more VLTs than last year, which is not true. But I didn't bother challenging it. None of us did any significant work to increase the value of our businesses."
Meanwhile, assistant city treasurer Shannon Bell warned council any drastic decreases in city taxes would cause considerable red ink for this year's budget, unless planned project spending was chopped.
During an in-camera meeting council agreed to hold a special meeting to discover the impact these and other revenue changes might have for planned projects.
