A special Council meeting tonight to determine if the City of Nanaimo will borrow $90 million, through another AAP, for a new public works yard.
Last year Council convened to consider a report that would have the city borrow $48.5 million for the same facility which would include a fleet maintenance facility, stormwater management facilities, fire training apparatus and a multi-use pathway.
However, after two attempts at gathering the funds for the building through the Alternative Approval Process city staff looked to Council for the go-ahead after two recommendations were adopted earlier this month.
“That Council direct staff to proceed with the ‘Highest Needs in a Single Phase’ option and prepare a borrowing bylaw in support of the project,” the first recommendation reads.
“Also, that Council direct staff to proceed with the Nanaimo Operations Centre project with a funding of $90 million from external borrowing with debt servicing funding by property taxation.”
According to a staff report, the city would be consulting with the Municipal Finance Authority for the long-term loan over the next 20 years, with property taxes being assessed in the upcoming 2025-2029 budget.
“Borrowing will be undertaken through the Municipal Finance Authority of BC (MFA BC) based off a 20-year term and the MFA BC 20-year indictive lending rate of 4.58 per cent at Jun. 4, 2024, annual servicing costs are estimated at $7.3 million,” the report says. “Impacts to the city’s property taxes will be incorporated into the 2025-2029 Financial Plan upon electoral approval of the borrowing.”
During a Governance and Priorities committee meeting Council was presented with three options to build the new facility, including the original option of borrowing $48.5 million to construct the fleet building.
General manager of public works and engineering Bill Sims said in an earlier interview he understands cost impacts on people during this period of financial hardship, which is why the city is looking to save where they can.
“We proposed keeping the same options, but cutting out some of the other elements,” Sims said. “It was recommended to have Council waive their bylaw requirement to build works and services.
“This would allow us to not do part of the Beban Park trailway, and it would also fund the fire training centre from another funding source.”
Sims said the math of the final option presented to Council would incorporate the fleet maintenance yard and the administration building which would carry a heavy price tag but would also save $10 million in the process.
“It would be building the two highest priority items into a single project at $90 million,” he said. “The other components would be funded in the future but wouldn’t utilize borrowing.”
Two attempts at an AAP were conducted in the past but were not successful after the city admitted they had administrative errors in a press release.
“Due to this administrative error and to ensure an open and transparent process, staff will be recommending a second AAP take place in January 2024,” the release said. “A report will be presented to Council with options for their consideration.”
Council is expected to vote on passing the borrowing bylaw tonight [July 29] , and according to a staff report, the deadline for electoral response to the Alternative Approval Process would be Thursday, Oct. 31 at 4:30 p.m.
