After 6-year journey, NRE saga not over as City asks for report about unclear financials

By Spencer Sterritt
March 12, 2018 - 11:04pm

A rendering of what the new NRE building could look like, if the City of Nanaimo decides to fund the $6.05 to build it.Nanaimo Recycling Exchange

NANAIMO — With the end of their lease rapidly approaching, the Nanaimo Recycling Exchange still doesn't know if they'll remain open after March 31.

At the heart of the delay is the NRE's financial situation, which has remained unclear throughout the six years the recycler has attempted to build a new facility on Kenworth Rd. For the first time in a public meeting, NRE executive director Jan Hastings told Nanaimo City Council during their meeting Monday night it will cost an estimated $6.05 million for a new building on the site adjacent to their current facility.

In late February, Hastings told NanaimoNewsNOW the NRE needed an additional $200,000 in annual funding from the City or it would be forced to close down, however there was no formal request to that effect on Monday night.

“Three times, three different meetings, I've been asking to see a business plan or financial plan,” coun. Sheryl Armstrong told Hastings. “I want to know what the operating costs are, I want the salary costs. I have yet to see that. Are we ever going to see one?”

Many councillors expressed the same concern throughout the discussion, which lasted nearly two hours.

Explaining why the NRE never presented a business case, Hastings said it was never asked for by either the City of Nanaimo or the Regional District of Nanaimo as the issue was bounced between the two for several years.

A report was drafted by the district about buying the land for the property and providing the cash for construction. According to councillors however, the report created didn't include any business plans from the NRE and was specifically about the cost of the building, separate of larger questions and concerns about the recycling exchange and their operation.

Coun. Bill Bestwick took exception to Hastings' reasoning, saying he'd asked directly for a business plan over the years. “Whether you were asked for it or not to help form the Regional District of Nanaimo report that was done independently, it would be helpful to have that, whether you were asked for it or not.”

Bestwick hinted the actual cost of building a new facility would be more than the NRE was saying, telling Hastings both RDN and City staff said it would be closer to $9 million.

Coun. Armstrong said based on the RDN report she'd seen and taking into account the annual funds given for the NRE's zero waste projects, the City would face between a 10 and 15 per cent property tax hike. Typically, $1 million in added spending equals roughly a one per cent property tax increase.

As the debate unfolded Monday night, many commentators online questioned why a roughly $6 million building would cause such a severe property tax increase, when the City claimed during the event centre debate an annual debt payment of $5 million wouldn't have increased taxes.

As part of her delegation, Hastings said the conversation shouldn't be about money, it should be about diverting as much waste as possible from landfills, which is a goal the City has.

“Would we ignore an oil spill in the Salish Sea if we couldn't make a profit cleaning it up?” she asked. “I don't think everything comes to down money. (We're) cleaning up a waste spill every single day.”

The NRE already received a guarantee of $300,000 a year for five years from the RDN to fund their zero-waste objective, as long as the district's solid waste management plan is approved. However, Hastings previously told NanaimoNewsNOW they would not be able to continue operating without additional money from the City.

Coun. Ian Thorpe's motion asking staff to write a report on options to financially support the NRE's request and clarify many questions passed with only coun. Bestwick opposing. Councillors Jim Kipp, Diane Brennan and Gord Fuller were absent.

Coun. Jerry Hong briefly objected, making sure staff weren't going to return with a report similar to the one already created by the regional district.

Thorpe said he knew calling for another staff report would take time and the NRE's lease at their site expires at the end of March, but said having the report to clear up any and all confusion would help councillors make a more informed and better decision.

 

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