Nanaimo Operations Centre / Public Works Yard Project Update
Motion
That Council direct Staff to proceed with the ‘Highest Needs in Single Phase’ option and prepare a borrowing bylaw in support of the project.
Sources
That Council direct Staff to proceed with the ‘Highest Needs in Single Phase’ option and prepare a borrowing bylaw in support of the project.
Thank you. I provided my rationale during the GPC for this, but high level I will say that. I wish this had been an option at the outset, I think. However, I'm worried that if we go with the multi phase, we're not going to see that admin building for potentially a decade. And that, in my mind is we need as much as the fleet maintenance building. So. I'm also concerned about the escalating costs of capital projects. If we push this. Out. Chances are we're going to see this go up by tens of millions of dollars. And finally, in terms of what average households are being asked to pay, I think 139,000. For a new public works yard, which is basically our fourth emergency service. $139. What did I say? Thousand? Oh, my gosh. I think that's
you, worship. During the debate, like the previous public discussion about the AAP, I heard counselors from the 2004 council and the 2005 council say that this was a project that they knew about, that needed to be done. And if they had done it, then we would have looked at a much smaller bill to get this thing across the finish line. I think it's an important project to get done. I appreciate the fact that we're. Saving a lot of money to do this. That there's considerable savings. And that the most important parts of the project will be completed and we will be. Seeing. The other parts done. Through renovations. And farther over time. So I do support this option. I think it's the right thing to do at this time. To see this through. And I know in our discussions. At the governance or the Finance committee, where we talked about the amount of borrowing that. We can do. We're right now at around 13 and a half percent. Of our limit. For. The cost of borrowing, and so we do have a lot of room. We are very prudent. I think this council is very prudent about how we spend money. But this is a project. That. We've had previous council know about for decades, and so it's not going to get any cheaper. I do not believe. And again, we're looking at a 25% contingency. Which means that we may be spending less than $70,000, and we may be looking at lower interest rates as well, because. That seems to be what the trend is pointing at. So for those reasons, I'm going to
done to use that. Phrase. I'll trumpet another well worn phrase. Better. What is it? Don't let the pursuit of the perfect stand in the way of. Doing the good. We come back to the basics. Councilor Manley's reminded everybody. Council. Has been hunting councils have been punting this around for a very long time. And we have no credibility. If we hunt this further down the road after all these years, and I am more than satisfied. This is an absolute basic. This is a must to, not a nice to have. And therefore I'm going to support the
Yes. I also have given this. A lot of thought, and as our earlier discussion, I appreciate the views of other counselors. But again, I'm going to suggest some alternate reasoning for why I don't feel I can support this option. First of all, this was not the original proposal that we had brought to us by staff, which was the recommended route to go, which was a phased approach. And the fact is that by revising to what we're calling a one and done, This does alter the layout physically of the project, and to me, it compromises some aspects of the public works yard. One and done. That's a neat slogan. It sounds great, but the fact is, this project. Is not going to get done overnight anyway. The reality is it is still going to have to be done in phases, I suspect. And I really question whether we would want to or whether we would need to. Borrow the complete amount of 90 some million dollars all at once when we could be borrowing it. In chunks to do the phases rather than paying back interest on the full amount over the years. And I come back to an earlier comment that I made about comfort of borrowing, and I recognize again that we do have capacity to borrow, but borrowing less on this project in order to do it in phases will allow us more comfort to borrow money for our other projects that we desperately want to see. Also off the ground again, I recognize we have capacity. But the closer we get to our borrowing limit, the less comfort. Council will have a boat proceeding. So I would prefer that we go back to the original staff recommendation, which was to do this. Project in phases. And that will be my preference when it comes to voting. Thank you. Thank you very much.
order. Councilors Perino, Manly and Thorpe. Thank you, your worship. And just a couple more questions for staff, Ms. Mercer. I'm like Councilor Brown. I've forgotten some of the discussion, but we talked. About if we go with the 90 million? What we're actually going to be saving is about 10 million to be able to do. The two projects together. Maybe. Mr. Simpson, I apologize. And can you just explain that further, because originally we were talking about. Not only the two projects, but the other projects that I had mentioned earlier. So we were up at around 160,000,000. Now we're down to 90. Can you just explain? That. For certainly the viewing public. Just very quickly, I apologize
for making sure this, again. That's an excellent question. As councilor Prin noted. The four stage master plan. That was originally envisioned a year ago. Saw this sort of rollout in four different stages, and the total value. Estimated with all the usual caveats last year. Totaled up around $163,000,000. The revised version that shows that we call those highest needs in a single phase, which is the fleet building and. The administration building. Total about $90 million. So we're deferring. Or building. The other works later, so. We're saving. A significant amount in long term borrowing. So any other works that we would do renovations to the parks operations yard, as an example, would be folded into the regular capital plan as opposed to going to the well of long term borrowing for those funds. So right away, The impact on the borrowing cost is quite a bit less. We've gone from 163,000,000 down to 90 million. Not to say that the total project costs when we build it out over the next decade or so. Won't be high like it'll be more, but we'll avoid that cost. Of borrowing. Okay, the other thing that we save here. On the. Doing the two projects at the same time are simultaneously. Is the escalation cost for the admin building, which would be a few years down. The road. So we estimate that escalation cost of loan to be about $10 million. So that is saved by doing that work at this particular time as councilor hemmens. Noted. We're seeing on these large scale project. Projects significant escalation. We're hoping and crossing our fingers that that's now. Sort of starting to taper off. But over the last few years, we've seen a million dollars a month in capital increases or capital cost increases. So I hope that covers off the question.
It does. And, Mr. Sims, just while you've got the mic. Can you just tell us again how many admit staff would you be putting into? A new building of
this type. Well. When we say the min building. That's the sort of front office. So there's a dozen or so of front office staff, but operating out of the administration. Building is about 170 staff total. And we would be as part of should this motion go ahead. Incorporating a number of staff on the parks operations group as well. Into the so called admin building, the Public works
building, at that. Front. And one more question. You're worshipping to Ms. Mercer the option that we were. Looking at for the south end community center, which we all agree at this table is desperately needed. How we funded is, of course. A different. Additional piece of information, but I'm just wondering, could we carry both the 90 million and. The. Possible escalation of 150,000,000 for the southern community center, would that be possible under our borrowing terms. Through your
worship. So there is borrowing capacity to do that. And you would be fine. And we would come back to you with funding options again for that project. To see where we could if there was a mix. If it was straight borrowing. So we would come back to you with those kind of things as well, but you would be within your borrowing capacity to do that, okay? I
just thought an awful lot about this over the last few weeks, and I certainly agree with. Council that it's a better option to get it done, particularly because of the way construction is going and the way the city is growing. And the endless reasons of why we need it, it's no doubt is desperately needed, but to go from 48 million. To do the 90 million to get the whole project done. Is both mind boggling and important, and so I'm anxious to hear from all the council.