The Nanaimo Operations Centre Project – Phase One Financing 102

Construction costs have escalated wildly in the past four years across Canada. While we wish we could go back in time and build this when costs were more affordable, we can at least move forward before they get higher.

The City has divided the development of the Nanaimo Operations Centre into four phases. Here’s a look at Phase One, which involves borrowing up to $48.5 million:

Foundational work including a new fleet maintenance facility, truck wash facilities and utility servicing for future phases of the NOC Project (max borrowing $40 million)
Stormwater Management infrastructure at the yard and next door at Fire Rescue Station 2 (max borrowing $4.5 million)
Fire Training Tower Fuel Conversion to convert the tower from burning wood for training scenarios, which is hazardous and environmentally poor, to an efficient gas system (max borrowing $1.25 million)
New trail to complete the circular route of trails at Beban Park, in place of an otherwise necessary sidewalk spanning the length of the Public Works Yard (max borrowing $2.75 million)

It’s worth noting that these potential amounts include allowances for cost overruns and inflation, and the City will only borrow what’s needed, when needed, and will only use the funds for this phase of the project. However, we can only ask once, so we need to ensure that the amount will be sufficient.

	Foundational Work	Stormwater Management	Fire Training Fuel Conversion	Beban Park Trail
Construction	$22,000,000	$2,700,000	$775,000	$1,700,000
Project Delivery*	$6,900,000	$540,000	$155,000	$345,000
Allowance for Inflation	$5,800,000	$400,000	$150,000	$250,000
Contingency	$5,300,000	$860,000	$170,000	$455,000
Maximum Borrowing	$40,000,000	$4,500,000	$1,250,000	$2,750,000

* Project Delivery includes costs for design, insurance, third-party utilities (hydro, telephone), permitting, etc.

Click image for larger (pdf) version

A large project like this doesn’t happen without an impact on property taxes, but if Phase One financing is approved by the public through the AAP, then each phase of the borrowing will be spread out over 20 years. If the full amount is borrowed, then once borrowing is complete, the average cost per household per year will be about $77 (about $10 per $100,000 of assessed value and an average Nanaimo home value of $808,873*).

Future phases of the Nanaimo Operations Centre project will be funded separately and may also go to an AAP for borrowing. These include:

Early plans for future phases includes:

Administration building
Storage buildings
Storage structures and outdoor spaces
Heavy fleet equipment areas
Staff parking
Secondary entrance
Fueling stations
Stores and supply building renovations

*The average cost per household is estimated to be $77 per year, (about $10 per $100,000 of property value for $808,873 average home value), based on a 4.78% interest rate (Dec 2023). This works out to about 1% of property taxes at the 2024 tax rate)