Nanaimo plans to target infrastructure underfunding

Nanaimo underfunds infrastructure maintenance by about $15 million.

Nanaimo has a multi-million dollar shortfall in infrastructure funding, but city staff are working to build a rainy day fund to ensure future repairs and replacements can be met.

Council also passed a resolution Monday to ask federal government for continued long-term financial support for infrastructure, nudged by the pending March 2014 expiration of the federal Build Canada Plan.

Ottawa invests about $2 billion annually in municipal infrastructure funding nationwide.

Since 2007, Nanaimo has received about $40 million, including $17.8 million for the water treatment facility and $7.7 million from gas tax revenues for Reservoir No. 1.

But that new infrastructure, along with Nanaimo’s $1.9 billion in existing infrastructure assets, will need to be maintained. And that money will have to come from Nanaimo taxpayers.

“Some people have used the analogy of buying a brand new, high-end expensive car and not servicing it and the thing ends up in the junkyard,” said Nanaimo Mayor John Ruttan, who estimated the city’s infrastructure deficit is at least $15 million.

“A little bit of maintenance would have done a lot, but trying to put that money aside is a bit of a challenge. People keep saying cut this or cut that but man oh man, when it comes to things like infrastructure there are major concerns.”

Combined, Nanaimo owns 521 kilometres of water distribution mains, 2,875 water hydrants and 21,772 water meters for a combined asset value of $298 million. A 2010 report revealed water infrastructure alone is underfunded by $1.5 million annually.

If current investment were to remain unchanged, in about 30 years Nanaimo would suffer a 197-kilometre shortfall in water main replacement, though that doesn’t account for future infrastructure to accommodate a growing population.

“[This plan] could be a difficult thing to sell, but sell we must,” said Ruttan.

Tom Hickey, Nanaimo’s manager of community services, said a new plan is needed to avoid a crisis.

“One of council’s priorities in the strategic plan is asset management,” said Hickey. “In general, the city’s assets are on average less than halfway through their life cycle. This year, we’ll be doing an update on the asset management plan that will also include facilities and land improvements while working hard to verify replacement schedules and update those on even better information.”

Hickey noted, however, that much of the infrastructure built in the mid-1970s shortly after amalgamation is nearing the end of its life and will have to be replaced in the coming years.

“We do have a shortfall and we’re working to pull together an even more accurate number for all of our assets,” said Hickey.

An update is expected to go before city council in late fall. Council will take its new resolution to both the Union of B.C. Municipalities and Federation of Canadian Municipalities conferences later this year to help build support for new funding programs.

A 2007 FCM report indicated that nationwide, Canadian municipalities have a $123-billion infrastructure funding deficit.

The federal government has indicated it will have a new plan in place prior to the expiration of the Building Canada Plan.

In the meantime, FCM has launched a campaign to ensure municipal priorities are reflected in the federal government’s new plan, and that funding access is improved.

Property taxes, the sole source of revenue for municipalities other than senior government grants, comprise only eight per cent of Canadian tax revenues, leaving most municipalities unable to deal with the rising cost of infrastructure maintenance on their own.