Nanaimo is looking funding formulas to pay for upgrades to the city’s aging storm drain system under rising pressure from from urbanization and climate change. (File photo)

Nanaimo is looking funding formulas to pay for upgrades to the city’s aging storm drain system under rising pressure from from urbanization and climate change. (File photo)

City of Nanaimo to explore user pay system for stormwater service

City staff, councillors, consultant discuss utility funding formulas used elsewhere in B.C.

Nanaimo is looking at creating a separate utility to pay for upgrading and maintaining the city’s storm drain system.

City engineering staff and Ehren Lee, a water strategy consultant with Urban Systems Ltd., provided a report on funding methods other B.C. municipalities use to pay for storm drain systems at a governance and priorities committee meeting Monday, Nov. 22.

Next to water supply infrastructure, Nanaimo drainage infrastructure is the city’s second-most valuable asset, estimated at between $700 million and $1 billion.

Poul Rosen, city director of engineering, said some of the infrastructure is new, but other sections are old and need upgrade or replacement. Maintenance costs are mainly drawn from general taxation, which means the system is in competition for funding with budget demands for other city projects and programs.

There is also an issue with equitability, staff said. Some of the system’s industrial or commercial users with largely paved properties cause higher storm runoff and greater burden on the system versus, for example, single-family homes with lawns and gardens that absorb or slow the rate of runoff.

Nanaimo, Rosen said, is becoming more urbanized, creating added demand for storm drain expansion while climate change places greater loads on the system and higher risk of damage to the system, property and natural watercourses storm runoff drains into.

“Obviously, in the past week, we’ve all become aware of drainage risk,” Rosen said. “The designs that have been completed, historically, might not be up to the task going forward … it translates into increased risk. The risk is going up faster than the funding available to mitigate it.”

Storm drain infrastructure has become more complex and expensive to maintain than it once was and lack of funding has also prevented opportunities to plan and partner with developers to upgrade city drainage systems alongside storm drainage systems of new developments that connect to city systems.

City staff propose establishing a separate utility for storm drainage based on a user-pay system, similar to water delivery.

Lee presented a spectrum of funding formulas and their complexities, from Campbell River’s basic parcel tax to Victoria’s complex user-pay system that takes into account multiple factors such as zoning, density, location, environmental impact and mitigation actions.

“They’ve gone about mapping and analyzing every property inside the city to get an estimate of the amount of pervious and impervious surface … So a single-family residential home in Victoria pays a much smaller amount compared, all the way up to a more user-pay approach, depending on the property and its impacts on the services there,” Lee said.

Rosen suggested Nanaimo could adopt a simpler model than Victoria’s.

Coun. Ian Thorpe asked if a Nanaimo user pay system system wouldn’t automatically put more onus on commercial properties to pay higher rates.

Rosen and Lee replied that often new commercial property developments include on-site runoff controls and user rates could be set according to land use – commercial versus residential – and take into account runoff mitigation factors.

Nanaimo Mayor Leonard Krog asked how many B.C. municipalities have gone to user-pay funding for storm drainage and expressed concern about administering a complex formula for establishing user pay rates.

Jake Rudolph, Nanaimo chief administrative officer, replied that he’d gone through the process of implementing a user-pay system at a previous job in Pitt Meadows.

“The challenge became the discussion in the community about equity and payment and that’s where the rub came there and it took a lot of heavy lifting to actually find a funding formula that the majority of people could live with … No matter what solution you end up coming to, as a council, in the future there will be probably a fair amount of conversation about the issue of equity,” Rudolph said. “You don’t want to create a system that’s so difficult to administer that it becomes a monster … and so there will be a desire, I think, at some point in time to err on the side of simplicity and just bite the bullet.”

City staff intends to hire a consultant to further study a stormwater utility in 2022 and potentially develop a business case that could be recommended to council in 2023.

READ ALSO: City of Nanaimo waste collection user fees going up 14%



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