Wednesday, August 28, 2013

Where Nanaimo Tax Dollars Go

Pretty soon city council will be presented with another five year financial plan which will contain the budget for next year. Without a doubt I am willing to bet we will be seeing another tax increase likely in the 4% range. I predict city council will wring their hands, scratch their beards (sorry ladies) and explain how difficult it is to set priorities.

The following list is one I just threw together off the top of my head (so the numbers are not necessarily accurate to the penny), but it shows where massive tax expenditures have been made these past few years.
$80,000,000 for water treatment plant, new reservoir etc.
$75,000,000 for a conference centre that is likely a $45,000,000 asset
$16,000,000 for a shiny new staff office, with shiny new furniture
$10,000,000 for hotel tax exemption for downtown hotel
$  8,000,000 to fix dams 
$  5,000,000 to buy Wellcox property downtown waterfront
$  2,000,000 lost by selling old Annex for $1.00
$  2,000,000 to run waterline out to Harmac
$  1,000,000 for staff golden handshakes
$  1,000,000 on old building at 25 Victoria Road

$72,000,000, the approximate annual cost for wages and benefits for all levels of employees paid by tax dollars. This represents about 80% of every tax dollar the city collects annually. Put another way, assuming a population of 80,000 it means every man, woman and child in the city of Nanaimo pays $900 per year for staff wages and benefits.

 A Few Passing Comments:

The $80,000,000 apparently was mandated by VIHA who deemed that Nanaimo water was not safe enough in spite of a 150 year record which required boiling our water 3 times!

The $75,000,000 was for a building we had contracted to build for $50,000,000 but those in charge of the project representing the city were unable to bring the project in on budget.

The $16,000,000 for the shiny new office would not have been necessary if they had spent about $2,000,000 upgrading the old annex.

The $10,000,000 hotel tax exemption is a pure giveaway which would hardly have been the deal breaker for any company wanting to build a $50,000,000 hotel.

The $8,000,000 to fix the Colliery Dams would have cost no more that $3,000,000 in 2010 if city hall hadn't been dragging their feet. Arguably it could even cost less than that to appease the dam safety branch if more accurate studies were done on the current condition of the dams.

The $5,000,000 for the Wellcox property on the downtown waterfront, may indeed may be seen as one of those truly visionary things this city hall has done. However, it currently looks like a questionable investment of tax dollars. Consider that Seaspan holds a perpetual right of use agreement with encompasses 60% of the 10.8 hectare parcel, and ICF holds a similar agreement controlling another 10% of the total area. Neither of these companies pay the city (the new owner) any rent for the use of the property, they only pay property taxes. Currently the city has no access to the waterfront portion of this property, nor can they access the property from Front Street.

Discounting the value of the old city annex making a building with an assessed value of $3,000,000 only worth $1.00 on the open market.

The $2,000,000 (maybe high) for the waterline heading out to Harmac, was to allow the city to access Harmac water if need be, and vice versa. SFN were the benefactors of this line also, as it finally brought potable water to #1 Reserve.

The golden handshakes include the $500,000 to ex city manager Mr. Berry who wanted to retire early and since he had done such a stellar job, the city thought we should pay him the equivalent of two years salary to stay at home. More recently Mr. Holmes and Ms Samra are the latest recipients of one of those handshakes as a reward for leaving the city employ for reasons the public will likely never know. Both cases deserve some answers.

The $1,000,000 for the old building at 25 Victoria Rd. on a building that does not meet current seismic standards is just another example of city council buying votes with your tax dollars.

On The Horizon

It is still unknown how accurately the asset management tax pool will be able to handle the looming costs associated with aging infrastructure. A 2010 report estimated a $12,000,000 anuual shortfall in infrastructure funding. A shortfall city manager Kenning recommended doing nothing about until 2013.

The RDN is looking at some $20,000,000 to replace the sewer outfall pipe that is coming to the end nearly 40 years before its estimated time.



  1. Submitted by Janet Irvine:
    Jim - Provinces such as Alberta and Ontario have a Ward system of municipal government in place and I am familiar with an Ontario Town that had a population of 80,000 in 2011 and it has had a Ward system in place, since 2003!

    *Each councillor represents an equal number of constituents within his or her respective Wards.*

    Nanaimo’s local government has been promoting growth for several years. City of Nanaimo’s population in 2011: 83,810. Population for 2016 is estimated to be 94,676 based on BC Statistics. (from NEDC’s info)

    Nanaimo’s eligible voters elect 9 officials each time they go to the polls and I do not yet understand how the system of representation operates in this municipality! I am all ears!!!

  2. thanks for giving these overviews of what is going on in nanaimo on this level. i really appreciate it and like your site!


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