The city is now poised to release a new policy on reserves this May, which will show a philosophy on debt and funding strategies for reserves. (NEWS BULLETIN FILE)

Expectations high with city finances

The multiplex financing plan also raised expectations about the resources the city has available

Financing for the event centre has raised the bar on public expectations.

A month after a referendum on borrowing $80 million to build an event centre – a project residents were told would not increase taxes or sacrifice programs and services – the city announced it would increase taxes from the projected 1.5 per cent to 2.3 per cent because of severe winter weather.

Nanaimo budgeted $512,000 for snow and ice removal, but spent more than $1 million and anticipates it’ll spend another $400,000 between October to December this year. The roads repair budget has also increased $288,000.

Some residents’ reaction to the tax hike news, before council discussed the issue, was to point to the financing of the proposed event centre. Charlotte Bridden asked on the News Bulletin website, “where’s that annual payment for the event centre loan? Maybe that long-awaited reduction in taxes is due,” and Tom Rokeby said “hold the phone … we can build an $80 million dollar arena with no tax increases but we can’t plow our roads without a tax increase…?”

Victor Mema, the city’s chief financial officer, has heard people question the tax increase, when the city said it had $5.4 million to service the debt on an event centre, and he pointed to sources of funding, like a strategic infrastructure reserve, gas tax and hotel tax, which are capital sources of funding.

“I’ve seen people say, well, we deserve a 5.4-per cent tax decrease, that’s not how it works,” he said. “With the event centre, we are talking about an asset, we’re talking about capital sources of funding. What we’re talking about today, we’re talking about recurring expenditures for some one-time stuff we need to do to fix our roads and for snow and ice.”

The city might not be able to use the money it was going to put toward financing the event centre to reduce taxes, or reallocate the money to services, but that doesn’t change the optics.

Not only does that initial reach for taxpayer dollars do nothing to help inspire public confidence that the city would have been able to build a multiplex without increasing taxes, but the financing plan also has raised expectations about the resources the city has available to limit the impact on taxpayers’ pocketbooks.

How can the city propose an $80-million project, with $5.4-million annual financing without having to increase taxes or cut programs and services on one hand and on the other, be prepared to tax because of a need for $881,000 to cover costs of an unexpected winter? City staff was able to find the money to make council’s priority project a possibility, so why shouldn’t the public expect the same effort be put into finding the resources to limit their costs for core services?

Nanaimo city council nixed the tax increase, deciding instead to take the money from reserves and to delay a debt stabilization reserve. The city is now poised to release a new policy on reserves this May, which will show a philosophy on debt and funding strategies for reserves. It’s also proposing a new debt stabilization reserve, which will see the city put away savings from interest rate changes to pay for increases in rates in the future so as not to affect taxes.

With the event centre fresh in the public’s mind, these are the kinds of funds and policies people will be paying attention to because it has the potential to affect their wallets, and it’s these kinds of conversations residents should be included in on.

news@nanaimobulletin.com

Just Posted

Nanaimo RCMP warn of NAC and Beban Park pool thefts

Nanaimo RCMP warning of increase in locker room thefts at public pool complexes.

Suspended Snuneymuxw chief issues statement on suspension

John Wesley denies wrongdoing and said suspension is invalid under First Nation council rules.

Nanaimo’s child poverty rate rose to 24.6 per cent in 2016 says report

The 2017 State of the Child report was released Friday

Snuneymuxw chief still in running for leadership

Statement expected today from suspended Snuneymuxw Chief John Wesley

UPDATE: Suspect charged after stabbing at Nanaimo motel

Assault among charges against woman, who sees next day in court Tuesday, Nov. 21.

VIDEO: Rare comic showing Superman’s 1st appearance to be auctioned

The 1938 comic features Superman hoisting a car over his head

Start on time: Canucks looking to shake first-period struggles

Canucks centre Bo Horvat said the formula for getting a leg up is there for everyone to see

COMMUTER ALERT: Snowfall warnings in effect across B.C.

Travelling this weekend? Check the forecasts before hitting the road

Beefs & Bouquets, Nov. 16

To submit a beef or a bouquet to the Nanaimo News Bulletin, e-mail bulletinboard@nanaimobulletin.com

Drones take off to search for missing North Okanagan women

A volunteer search party was supported by professional drone operators

Tips for keeping your personal data safe, from the experts

It’s important to keep your ‘online footprint’ safe

Lights to turn blue ahead of funeral for fallen Abbotsford police officer

Buildings across B.C. are going blue Saturday night in honour of Const. John Davidson

Ride-share pioneer drives up quietly to B.C. battleground

Lyft approaches B.C. without Uber bombast, eyes small towns

Panthers advance; Maroons fall to Dukes

The Vernon Panthers are moving to the B.C. Subway Bowl semifinals, while the Fulton Maroons are done

Most Read