Frequently Asked Questions

The original Public Works buildings were constructed in the 1960’s and evolved as Nanaimo’s population grew from less than 45,000 in 1980 to over 100,000 in 2021.  

The fleet maintenance building is past it’s useful life, not seismically safe and the mechanic bays are too small to fit some fleet vehicles including the largest of the City's fire and sanitation trucks.  

The crew and administration building is also too small to accommodate current staff. Much of the additional space was added using temporary buildings, like construction trailers, which are not intended for permanent use and have outlived their useful life. Also, it isn’t seismically safe. 

A lot of effort has been made to keep up with the growing needs of the community by converting unsuitable spaces or adding additional trailer units to create more room to work. The overall result are buildings that struggle or fail to meet operational needs, environmental regulations, as well as building code, accessibility and gender equity considerations.  

If we receive approval to borrow the funds, we will begin detailed design with our architect, and then start engaging with contractors.  

We have not hired a contractor for the project because we have not received approval to borrow the funding. This is also the reason for not having detailed plan drawings – the funding for that is included in the borrowing. 

We have had seismic assessments done on the buildings in the Public Works yard as well as the Parks Operations locations (the goal is to eventually combine public works and parks operations into one location) and they were conducted by an independent engineering firm.  

Due to the seismic assessment, the fleet maintenance building (mechanic shop) is the highest priority in risk to staff. Not only does this place our employees at risk but losing the shop impacts the day-to-day services the City provides. In the event of any emergency, City crews will be front line in rebuilding, repairing and restoring the community's infrastructure.

Public Works is the fourth emergency responder, and it is crucial for them to be able to respond in a ‘post-disaster’ situation. A recent example of Public Works responding to an emergency is during the December 2018 windstorm. A number of trees, power lines and power poles were brought down by the wind over many of Nanaimo’s roads making them impassable. Public Works crews were there to clear the roads so that emergency vehicles could pass and BC Hydro crews could get in to restore power.  

The fleet building needs to withstand a large earthquake so vehicles that are responding to the emergency such as fire trucks and vehicles that are there to clean up and rebuild during and after an emergency can be maintained.  

The additional cost to make these two buildings post-disaster rated has been forecast at less than 1.5% of the cost of the project. 

The City is looking to borrow up to $90 million for this project but will only borrow enough to cover anticipated costs each year as the project progresses. Property taxes will be adjusted each year for borrowing costs. Once the borrowing is complete, and should the full amount be borrowed, the cost for the typical Nanaimo home would be $139/year or $18 per $100,000 of assessed value. 

(For a typical home valued at $783,808. Based on 2024 figures and a 20 year amortization of 4.58%. Figures have been rounded to the nearest dollar.) 

In short, funding from the City’s reserves has been allocated to other planned projects in the City’s long term project plan. Council chose to use borrowing for this project as this was the recommendation from the 20 Year Investment Plan Update.  

 The investment needed to maintain existing assets combined with the ongoing needs of a growing community, both physical and in terms of livability, can be significant. Reserves provide the largest funding source for projects and the City has a Reserve Policy that governs the development, maintenance and use of the reserves including the requirement of minimum reserve balances where appropriate.   

The 20 Year Investment Plan and Asset Management Plan Update presented to Council in June 2023 projected investment over the next twenty years of $2.6 billion, a $999.1 million funding shortfall and an estimated replacement cost of the City’s infrastructure of $4.8 billion (2021).  

The City’s reserves are not sufficient to fund all planned projects over the next twenty years.  To ensure needed projects can move forward recommendations to address the funding gap were presented which included funding several major capital projects from borrowing subject to Council and electoral approval this included the Public Works Yard Upgrades Project.  

Major projects that will benefit future residents are good candidates for borrowing based on the assumption that since future residents will benefit from the projects, they should share in the costs by paying the debt servicing costs through future property taxes 

Additional information is available below: 

20 Year Investment Plan and Asset Management Plan Update  

The City’s annual surplus is never large enough to fully fund a project of this scope.  

There are two types of surplus – annual and accumulated – and both have limitations around what they can be used for.  

Local Governments in BC are legally not allowed to carry a deficit so will often have an annual surplus. Our reserve policy requires us to first use the annual surplus to top up any reserves that have fallen below their minimum required balance.  Any remaining surplus is allocated as per discussions with Council. Examples of how funds have been allocated in the past include funding the City’s Asset Retirement Obligations and distributing funds to the Property Acquisition Reserve to fund future property purchases.  

The “accumulated surplus” is the total amount of the City’s assets, both financial and non-financial, less any liabilities. When looking at the City’s Financial Statements this is a big number ($1,008,279,462 at December 31, 2023, to be exact), The “accumulated surplus” is made up of three components – Operating Reserves, Statutory Reserves and Investments in Tangible Capital Assets. Here’s what each means: 

Investments in tangible capital assets  

Tangible capital assets are the diverse infrastructure owned by the City such as land, roads, recreation centres, fire trucks, sewer and water systems, etc. The investment in tangible capital assets is calculated as the net book value of the City’s tangible capital assets (cost less accumulated depreciation) less any capital debt (debt incurred to build or purchase a tangible capital asset).   

At $813,686,224, this makes up 81 per cent of the City’s accumulated surplus and cannot be used as a funding source because they are a physical asset, not actual liquid cash.  

Operating and Statutory Reserves 

The City has a reserve policy that governs how reserves are built up and allocated. The policy also requires a minimum balance be maintained in certain reserves to help make sure the City has the financial resources available to respond to unanticipated events including the early or unanticipated failure of an asset.   

For example, in November 2022, the Nanaimo Aquatic Centre (NAC) experienced a failure with their boilers. Funding was allocated from the Facility Development Reserve to allow for two new boilers to be ordered and installed in a timely manner. 

When putting together the budget each year, the City’s 10 Year Project Plan is updated. Reserves are a major funding source for the project plan.   

Requirements for using funds from reserves for projects includes making sure reserves are used for their intended purposes and that funds are distributed among the variety of projects required to maintain City services. 

A significant portion of the reserves have been allocated to fund projects in the next ten years.  

The City’s Operating Reserves make up 9 per cent or $90,050,776 of the accumulated surplus. 

Statutory reserves are established by a bylaw and may only be used for the specific purpose for which the funds were collected.    

For example, the Community Works Reserve can only be used for projects that meet the criteria of the program under which the funding was allocated to the City. Another example is the Equipment Depreciation Reserve which is for the replacement of the City’s fleet from cars and pickup trucks to ice resurfacers (a.k.a. “Zambonis”) and fire trucks. 

The City’s Statutory Reserves make up 10 per cent or $104,542,462 of the accumulated surplus. 

There is not enough funding available in the reserve to fund this project and other needed infrastructure renewal projects. This reserve also funds the debt servicing costs for the replacement of Fire Station #1.  

The General Asset Management Reserve helps fund the renewal of drainage, transportation, park amenities, facilities and IT equipment that have a replacement value of $2.4 billion (2021), as well it helps funds the City’s portion of transportation, drainage and parks growth projects related to development (DCC projects).  

This reserve is one that has a required minimum balance ($6.1 million in this case), which helps ensure the City has funding available to react in a timely manner to issues that may emerge during the year. The reserve’s opening balance for 2024 is $21.0 million, the 2024 contribution from property taxes is $12.6 million and the projected closing balance for 2024 is $13.9 million.