ST. PAUL - Town of St. Paul council was split in making a decision regarding the mill rate being charged to some commercial properties that had been annexed by the Town of St. Paul in the past 10 years.
Earlier this year, council considered a request where some property owners on the east and west ends of St. Paul wanted to be charged the Town of St. Paul mill rate, rather than the County of St. Paul’s mill rate. Despite a close vote during the Sept. 28 council meeting, those property owners will be granted their request.
As per an agreement that was signed when the land was annexed in 2010, the properties in question would be charged the County of St. Paul mill rate for the next 10 years, since it was the lower mill rate at the time of the annexation. Now, the commercial mill rate with the County of St. Paul is higher than the Town’s mill rate.
“This is usually done in an annexation where there is disparity between the two associated municipalities involved in an annexation. It is done to protect the properties that are being annexed from a significant jump in taxes,” said CAO Kim Heyman.
In this case, the agreements were signed over a two-year period, so some are expiring after this year and some next year. The residential properties in question are still being sheltered as the County residential mill rate is quite a bit lower than the town's mill rate.
“The problem lies with the commercial properties in that for several years, the County mill rate has been higher than ours,” explained Heyman. The properties in question are therefore being taxed considerably more than other commercial properties in the town.
“We are asking that council agree to rescind these agreements for the last one or two years, depending on the agreements, in order for these properties to be charged the same as other commercial properties in our Town,” said Heyman.
Since June, when the issue originally came before Council, administration has had several conversations with the Municipal Government Board and their legal team, as have the affected property owners.
“They have concluded that Section of the MGA allows Council to rescind this agreement by either cancellation, reduction, refund or deferral of taxes.”
If the agreement is cancelled, it would reduce the town’s tax revenue by $10,862.
“It’s up to council. It’s your choice,” said Heyman.
When discussing the issue, Coun. Nathan Taylor said he felt it would set a precedent if council agreed to cancel the agreement that had been put in place.
“I still believe we should follow that agreement,” said Taylor. He noted that a better agreement may be needed next time land is annexed, but “we set an agreement. Let’s finish it out.”
Coun. Ron Boisvert said he felt the intent of the agreement was that people would pay the lowest tax rate. While it may not have been in writing, the intent was said, verbally, he noted.
Taylor noted that the businesses aren’t in a worse position by the town annexing them 10 years ago. If the town had not annexed the land in question, the landowners would be paying the higher taxes for years to come, rather than just the remainder of the 10-year term.
A motion was made that reads: “that Council approve reissuing the 2020 Tax Notice for Tax Roll #'s 2676 (Lot 1; Block 1; Plan 092994), Tax Roll #2675 (Lot A; Plan 2687RS), Tax Roll #2674 (Lot 2; Block 1; Plan 0928994) using the Town non-residential mill rate of 16.201. This annexation agreement ends on December 31, 2020.” The motion was carried by a vote of 4-3.