"Maybe I shouldn't say this, but residents in my area could get a tax decrease," said Flamborough councillor Robert Pasuta.

Glanbrook councillor Dave Mitchell, who represents both urban and rural residents in his large Ward 11 area, agreed his rural homeowners could benefit from a revised area-rating policy.

But Mitchell was emphatic that a recommendation council agreed to last week does not mean the eventual elimination of area-rated services. "It is not about getting rid of area rating," he said. "Area rating is not going anywhere."

In a surprise reversal after a night of frantic phone calls and prolonged arm-twisting, councillors agreed on August 7 to implement a possibly new policy on January 1, 2011, following a series of public meetings.

In the meantime, politicians agreed to maintain the current policy through 2009 and 2010, while conducting public consultations to impose a different model. The options include maintaining the status quo, establishing a different level of services based upon an urban/rural split, or eliminating area-rating altogether.

The motion was approved by both urban and rural councillors, including one of the most vocal opponents of eliminating area-rating, Flamborough councillor Margaret McCarthy, who even thanked councillors for their efforts over the previous few days.

"Today is a turning point," said Mountain councillor Tom Jackson.

A few days earlier, in a 8-7 vote that had urban representatives lining up against their suburban counterparts, councillors approved keeping the current tax policy in place. Absent from the vote was Brian McHattie.

But after a number of evening phone calls, Mountain councillors Scott Duvall and Terry Whitehead said the urban councillors finally agreed to support the revised motion.

"Everybody wants to work this thing out," said Duvall, who has been opposed to continuing the area rating service policy.

Duvall believes the suburban councillors "see the writing on the wall" for the eventual end to area-rating, and are willing to discuss how to reform the tax policy.

Whitehead, who this spring engaged in a heated battle with McCarthy over council's decision to eliminate Flamborough's slots revenue from the area-rating policy, said it's time to revise the tax policy to provide a fairer, more objective system for residents.

The decision by councillors to remove the slots revenues from area-rating meant the rest of Hamilton received $3 million in revenue and decreased homeowners' taxes, while Flamborough residents endured an average tax increase of about 10 per cent - about half of which was due to the loss of the slots money.

A city report this month recommended reviewing area-rating because it does not reflect how services are determined under the new city structure. "It has become evident that the current method of area rating needs to be reviewed to ensure it accurately reflects how the service is delivered and/or the cost of providing these services," it stated.

Last September, prior to the 2008 budget negotiations, councillors put off deciding on the future of area rating until June 2008. But after the angry and emotional tug-of-war that was created over eliminating the slot revenues, councillors decided to hold off on the future of area-rating again and instead ask that city staff craft a report on the issue.

Currently, culture and recreation, fire and transportation services are area-rated. In 2001, under the City of Hamilton Act (Bill C25), council approved area-rating for a number of municipal services including transit, fire, culture and recreation, storm sewer, seniors' tax credit, slot revenues and financial adjustments.

But over the years, councillors have systematically removed services from being area-rated. Once a service is taken out of the policy, it cannot be reinserted.

Suburban politicians have opposed the elimination of area-rating, fearing the effect of potential high property taxes in areas where constituents receive limited services.

The city report points out scrapping area-rating will "result in significant tax shifts from the former city of Hamilton onto the remaining former municipalities."

If area-rating had been eliminated this year, Glanbrook residents would have paid on average an increase of about 14.5 per cent, Ancaster residents would have received a hike of about a 11.3 per cent, and Dundas residents, 9.5 per cent. Hamilton residents would have received a cut of about 11 per cent.

Urban councillors argue that, since Hamilton is one city, everybody should be paying the same amount of taxes for the services that are available.

Whitehead said Hamilton should have adopted a fairer tax policy based on an urban/rural split, such as the one introduced years ago in Ottawa and Sudbury, which are also amalgamated municipalities.

"We know we have to make this work," said Duvall.

But rural councillors say the motion they agreed to does not mean they have pre-agreed to change the city's tax policy. "I am not giving up anything," said Pasuta. "If they wanted to, (the urban councillors) could have taken area rating from us yesterday. I think they want to work with us."