The City of Nanaimo continues examining ways to fund and construct a replacement for its workhorse public works facility. (Ian Holmes/NanaimoNewsNOW)

By Ian Holmes

project update

Nanaimo City Council weighs funding options for planned new public works yard

Jun 25, 2024 | 3:29 PM

NANAIMO — A pair of additional funding options proposed by City of Nanaimo staff aims to give councillors more flexibility in its odyssey to establish a new public works facility on Labieux Rd.

Known as the Nanaimo Operations Centre, councillors delved into the new financing options for the beleaguered project following two electoral approval efforts by the City which failed due to internal errors.

While staff still recommend the original option of borrowing up to $48.5 million to construct a new fleet maintenance building as the lead initial improvement, a similar scaled-down option requiring $4 million less borrowing was proposed.

A third option of building the fleet maintenance and administration buildings at the same time in a newly configured location costs more upfront ($90 million borrowing), but is estimated to save the City $10 million in the long run.

No additional borrowing is expected in option three en route to completing the planned four-phase project with a preliminary price tag north of $160 million.

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‘We’re very, very aware of the challenges that Council faces with budgets, reserves and future tax increases as well. Option one remains the recommended option…,” the City’s general manager of engineering and public works Bill Sims told a Tuesday, June 25 Governance and Priorities Committee meeting.

A summary of all of the proposed options can be found via a City staff report linked here.

A drawback with option three, according to the staff report, is noise from the fleet maintenance building impacting employees in the adjacent office buildings.

Several councillors voiced concerns about the impact paying more now would have on taxpayers and funding other capital projects.

“While that has the downside of bumping up the immediate cost, it also has the positive of getting those two particular sort of more urgent components dealt with,” Sims said.

The City’s finance department was closely consulted in formulating the two new options, all consisting of pros and cons, Sims noted.

Councillors will be tasked with selecting an option at an upcoming council meeting, while City staff still recommend again utilizing the Alternative Approval Process (AAP) mechanism to gain required electoral consent to borrow the required funds for the project.

Coun. Hilary Eastmure represents one of at least four votes on the nine-member council backing the newly presented third option.

“We all heard the same concerns that the phased project, people didn’t understand it, and they really didn’t like the uncertainty and with cost escalations being what they are –- being able to save $10 million with costs being what they are makes a lot of sense to me,” Coun. Eastmure said.

Coun. Sheryl Armstrong was absent from the meeting, while four councillors are publicly behind the first option, including Mayor Leonard Krog.

“Things haven’t gotten any better at the public works yard, they’re only going to deteriorate. This was a logical, sensible first step, it’s not breaking the bank…”

If successful, designs are planned for next year and construction could start as early as 2026, councillors were told.

An estimated 130 to 140 employees work in existing administration buildings at the public works yard featuring a collection of portables stacked together.

About 20 employees work in the outdated fleet maintenance building.

Nanaimo’s public works yard was built in the 1960s.

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Ian.holmes@pattisonmedia.com

On Twitter: @reporterholmes