By Dominic Abassi

Continuation of asset tax part of plans to cover Nanaimo’s $258M long-term shortfall

Apr 22, 2017 | 2:22 PM

NANAIMO — The City of Nanaimo is working on a solution to cover a more than $250 million funding shortfall to pay for things like roads, sewers and a new water supply dam.

Part of that solution includes extending an automatic one per cent property tax increase for the next five years to contribute to an asset management reserve. That built-in tax increase, originally established in 2013, was set to expire this year.

The continuation of the asset management tax has been approved by council, according to a City release, and is included in the yet to be approved 2017 financial plan.

The revelation of the funding shortfall comes from a recently presented, staff created 20-year plan studying future needs for infrastructure renewal and priority projects. 

The City’s chief financial officer Victor Mema said the gap won’t be felt in the near-term, but has an impact looking to the future.

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“When you do these long-term plans you’re really looking at how life is going to look in 20 years and what infrastructure you would need,” Mema said. “It always ends up with a dollar sign because it costs us money to keep up with the infrastructure that we have.”

Mema said bolstering the asset reserve fund and increasing development cost charges paid by developers will help cover a good portion of the $258 million, but not all.

“We obviously have low debt ratios so we have that option to use,” Mema said.

The 20-year outlook also looked at the current condition of the City’s assets and infrastructure.

Forty-three per cent of Nanaimo’s parks amenities are in poor or very poor condition, according to the report. That includes 13 “destination parks,” 23 sports fields and 140 km of trails.

“Obviously it needs attention and so what the report does it shows us we need to pay attention to that area, we need to increase our funding or the way we do business to bring our standards a little bit up,” Mema noted.

The long-term financial plan does not take into account how the City would pay for any of the priority projects approved last summer by Council. Those include the extension of the waterfront walkway and a sports and entertainment centre.

Among the priciest projects being planned for over the next 20-years is an $88 million water supply dam at Jump Lake to meet future demand.

Road rehab work is pegged at $79 million, while a new Public Works building is predicted to cost $8 million.

Mema said it’s impossible to predict the impact on property taxes beyond the next five years. A staff report showed the projected increase in 2018 is 2.1 per cent, followed by 2.5 in 2019.

You can read the full report here.

dominic.abassi@jpbg.ca

On Twitter: @domabassi