The Public Works Yard Updates Project – Financing 101

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. Here’s a look at the project, which involves borrowing up to $90 million:

Construction	$48,000,000
Project Delivery*	$14,000,000
Allowance for Inflation	$10,000,000
Contingency	$18,000,000
Maximum Borrowing	$90,000,000

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

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 project. However, we can only ask once, so we need to ensure that the amount will be sufficient.

A large project like this doesn’t happen without an impact on property taxes, but if financing is approved by the public through the AAP, then the borrowing costs 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 $139 (about $18 per $100,000 of assessed value and an average Nanaimo home value of $783,808*).

 *Rounded to the nearest dollar. Tax impact based on 2024 figures and a 20 year amortization of 4.58%.

Below is a more detailed project cost breakdown (see pdf for explanation of the chart below).

Cost Type	Item	Estimated Cost
Construction	Crew and Administration Building	$21,000,000
	Fleet Maintenance Building	$16,000,000
	Storm water Treatment and Servicing	$3,500,000
	Site Servicing	$1,500,000
	Surface Works and Site Development	$1,500,000
	On-site Electrical Infrastructure	$1,500,000
	Relocate the Materials Storage Facilities	$1,500,000
	Road Improvements and Site Entrances	$1,000,000
	Site Security	$500,000
	Construction Sub-Total	$48,000,000
Project Delivery	Professional Services (Design, Legal, Admin., Inspection, Etc.)	$9,000,000
	Furnishing, Fixtures, and Equipment (Inc. Fleet Maintenance Equipment)	$2,000,000
	Permitting and DCCs	$1,500,000
	Off-Site Work	$525,000
	Third Party Utilities	$500,000
	Insurance	$400,000
	Move Costs	$75,000
	Project Delivery Sub-Total	$14,000,000
Inflation	Projected to May 2028	$10,000,000
Contingency	25% (Class D)	$18,000,000
Total Recommended Budget		$90,000,000