Nanaimo city council was divided on approving the motion to hold a second alternative approval process to borrow $48.5 million because of what they are calling a lack of information.
A review of the first AAP was sparked after the city received a letter from Sandford Bartlett questioning the validity of the notice provided to the citizens of Nanaimo. According to a staff report, it was found an administrative error was made by the city when the notices were sent out and that it didn’t conform to the legislative requirements.
Sandford Bartlett, a lawyer in Nanaimo, addressed council to outline why the AAP is not feasible in the city and says he feels residents in the city deserve a better, more economical, way to fund this capital project.
“The process doesn’t reach the citizens of Nanaimo,” Bartlett says. “Why can’t they send us a notice and tell us what it is they are doing, and why they are borrowing our money?
“There was no talk about interest payments on a large loan, and how much would have to be paid back monthly. It must come out of the city’s pockets as well.”
In Bartlett’s address to council, he asked them to consider the possibility of holding a referendum, or borrowing all the money upfront so residents would have a clear indication of what is happening. But he says he would prefer not to borrow money at all and absorb a potential 3.6 per cent tax increase.
“I would prefer not giving my money to the banks,” he says. “I think anybody who could afford to pay money rather than on your credit card will pay the money. We are going to end up paying more in the long run, because interest rates can’t be predicted in 20 years.
“We could end up paying $100 million for the $50 million loan.”
According to the city’s 2023 State of the Economy report, in 2022 the average per capita income was $40,598 and with municipal taxes on the rise and the added cost of living Sandford says adding additional municipal loans will burden an already financially strapped community.
“The city will have to make monthly payments on that $50 million at six per cent meaning it will be $300,00 a month in interest,” he says. “Where are they going to get that money? It is going to be in your next tax.”
Sandford says all he wants from council is information, and transparency in the operations centre project and how much it will cost because right now there is no clear indication of the direction for what he calls a massive undertaking.
Councilor Ben Geselbracht originally was in favor of supporting AAP when it first came to council but says after reviewing material and talking to several people in the city it has become clear to him the city dropped the ball to provide specifics.
“I think this is an essential project,” he says. “I think the community needs to know that, and I think we could afford a little more time to put it out there and review the AAP process.
“We could look at the potential of a referendum, but ultimately any choice we make is just going to slow down the inevitable. Which is we need this thing.”
Geselbracht says the building is needed to improve the city and any time spent delaying the construction adds more expense to the total figure.
“Every month we wait adds an additional one million dollars to this project,” he says.
Mayor Leonard Krog spoke by advocating council deal with this matter now before costs spike by saying the project has been a long time coming, and the determination to hold the AAP is based on advice given by staff and council should consider that.
“When you are elected, the smart thing to do is listen to the staff who are hired,” Krog says. “We are expected to make decisions to absorb information and listen to expert advice then decide.
“Not to defer, not to hide from public criticism and not be moved by the biggest crowd that comes in.”
Council decided to go ahead with the second AAP process by a vote of 7 to 9 and Krog says it is the right choice for the scope of the project.
“This is the right process for this type of capital project,” he says. “This is a need, or a must-have, public works yard to ensure we can deliver services appropriately, repair equipment and keep our workers safe is a priority.”
The motion was approved by all councilors except for Tyler Brown and Geselbracht.
According to a staff report the second AAP is set to have a deadline of Feb. 20, 2024, for the Nanaimo Operation Centre for residents to have their say on borrowing $48.5 million.
The building will replace the current structure on Prideaux St. and is estimated to cost a total of $163.5 million.