The City of Estevan has decided to give the St. Joseph's Hospital Foundation a break on its taxes.
Although the City did not make the decision public, it was noted in a letter to council from foundation director Roxy Blackmore, that the organization would not be forced to pay taxes on the Primary Health Care Centre at St. Joseph's Hospital in 2010. In her letter, which was included in the Feb. 28 council package, Blackmore thanked council for its decision
"I would like to extend my gratitude for your generous gesture in relieving St. Joseph Hospital Foundation of their 2010 tax burden," Blackmore said in her letter.
The issue came to light at the Oct. 18 regular meeting of council when a delegation from the foundation appeared before council to ask the City to forgive the $37,720 in taxes for the health centre.
Chairman John Billesberger and vice-chairwoman Bridget Bittman said the City's decision to tax the facility was unfair and created an unnecessary financial burden on the foundation whose primary focus is to purchase equipment for the hospital.
"With $37,000 in property taxes, we have $37,000 less in income to buy medical equipment," Billesberger told council in October. "We have to sell an awful lot of raffle tickets to make up $37,000 in taxes. We need money and $37,000 is a lot of money, but to us it's a real big sum of money. The property tax you charge means we have to raise that much more to buy medical equipment."
The facility, which opened roughly three years ago, was initially intended to be a centre for local doctors and as a tool to keep more physicians in Estevan.
At present, Dr. Khalid Sheikh is the only doctor using the clinic, a fact that has forced the foundation to rent out two spaces to local businesses to help pay the $1.6 million loan they are carrying on the clinic.
Those two businesses were apparently the issue for the City as they felt the foundation had gone outside the clinic's initial mandate by renting space to the businesses. Mayor Gary St. Onge also noted there was an issue of fairness as the operators of the other medical clinics in the city pay taxes on their operations.
Following the October meeting St. Onge told the media that council would revisit the decision and that he wouldn't be surprised if they had a change of heart.
Apparently that change of heart occurred sometime between October and February. St. Onge said council decided to show mercy to the foundation since they have not been charging the businesses that operate out of the clinic for taxes and would have been forced to come up with the money themselves.
"When they went into their leases with the people in there, I guess they didn't realize there were no taxes for the first two years because of the CANDO program (which gives tax relief to new construction) and so they didn't write (taxes) into their leases," said St. Onge.
"Council looked very carefully at it and the problem is that we are trying to recruit doctors so it was decided by council that we should bite the bullet (for 2010 and 2011) and then we will look at it again at the end of 2011. We have already said to them any new people coming in, they will have to pay taxes in the future and they have to include that in the leases.
"They do a lot of good work but they didn't realize that. We could have been tough about it but we decided this is not the time to be tough with them but I think they understand where they need to go in the future."
