The City of Nanaimo will try to gain citizens' approval to borrow $90 million to rebuild the public works yard all in one go.
City council, at a meeting Monday, July 22, voted unanimously to direct staff to create a bylaw to borrow $90 million for the Nanaimo Operations Centre and plan for an alternative-approval process in the fall.
Councillors, at the committee level, had already indicated a preference for a "one and done" option to build both a fleet maintenance shop and an administration building at the works yard on Labieux Road. Two AAPs related to rebuilding the works yard in phases, starting with a $48.5-million first phase, failed in the fall and winter due to administrative errors.
Coun. Ian Thorpe was the only council member who expressed a preference for sticking with the phased approach. He noted that it was staff's original recommendation, came with better siting of the buildings, and cost less in the short term.
"I want us to still feel in a good position about approving borrowing for things like the south-end community centre, and I think borrowing too much for this project will reduce our comfort level for that," he said.
The majority of councillors, however, preferred the $90-million "highest needs" rebuild, including Coun. Erin Hemmens who said she wished it had been an option from the start.
"I'm also concerned about the escalating costs of capital projects," she said. "If we push this out, chances are we're going to see this go up by tens of millions of dollars."
After councillors voted 8-1 to pursue the $90-million works yard, they considered staff's recommended options on how to try to fund the project. Staff offered four options, including using up to $16.8 million from the general asset management reserve, or using the reserve to pay up to 25 per cent of debt servicing. One of the options would have brought down the estimated annual cost for a typical household to $92, but council wasn't comfortable with dipping into reserves to that extent and instead chose an option to fund the project entirely through borrowing and repaying it entirely with property taxation of approximately $139 per year for a typical household.
"As much as it might be tempting [to use reserves], I think that pain might not be felt by this council, but it sets future councils up in an irresponsible way," said Coun. Tyler Brown.
Coun. Paul Manly said Nanaimo city councillors as far back as 20 years ago knew a public works yard rebuild needed to be done.
"If they had done it then, we would have looked at a much smaller bill to get this thing across the finish line," he said.
City staff intends to have the borrowing bylaw ready for council's approval at a meeting Monday, July 29. Public engagement will start in the summer ahead of an AAP in the fall.
