A Nanaimo council watchdog group says it is irresponsible for council to borrow $48.5 million to build a new operations centre when residents are already feeling the financial pinch.
The city announced plans to build the first phase of the facility back in September with the hopes of gaining public support to replace the current structure on Labieux Road.
The city said in a media release, the current building fails to meet existing operational needs, environmental regulations, as well as building code or gender equality considerations which is why the city needs to look at a new facility.
Noni Bartlett of the Nanaimo City Council Accountability and Oversight Hub says, this is a good project, but council is rushing the agenda without considering the impacts it will have on the community as a whole.
“Our property taxes have increased by 7 per cent last year, and people are struggling to stand on their feet,” she says. “This would be another debt we weren’t expecting, and all the accumulation has put us in a position to ask council to consider another avenue of funding instead of borrowing.”
According to the city’s website property tax increases were set at 7.2 per cent to 6.2 per cent of the operating costs and one per cent for the Asset Management Reserve for 2023, but Bartlett says despite the increase applying for such a big loan comes with too many unknowns and fears council hasn’t considered them.
“The city wants to borrow $48.5 million for the first phase, but that is the only number they know for sure,” she says. “They don’t have numbers for the other phases, and we don’t know how much interest and what the terms will be.
“We don’t know what the costs are, council is estimating $160 million but everything is going up, so we don’t know what will happen in the future,”
According to the Municipal Finance Authority of BC loans with a 20-year term would receive a rate of 5.25 per cent but those could be reassessed every 10 years and reset based on the market price.
Mayor Leonard Krog says he understands the financial hardship, but the Operations Centre is a necessity and the cost of building a new building far outweighs the cost of retrofitting the existing one.
“Based on a 20-year amortization, and the best estimate of where interest costs are going to go over time this would amount to nine dollars per $1,000 of assessed value,” he says. “This means for the average Nanaimo home it would be an extra $76 a year, each year for 20 years.”
Krog says the current facility is aging and is in dire need of updates not just from an environmental point of view but also because the city has grown since it was built in 1960.
“These buildings are constructed in such a way that they can’t accommodate the equipment that needs to be worked on,” he says. “Ask any contractor, there is a point where it makes no sense economically to retrofit buildings at a certain age.”
Krog maintains this is a smart decision to build a new facility and urges everyone to have their say through the Alternate Approval Process by downloading them and having them submitted to city hall by 4:30 p.m. this Friday.
