Inflated project costs crush City of Nanaimo

In light of what is happening in Quebec with the spotlight glaring on the open wounds of corruption at the local government level, it is time to have a comparative look at how business is conducted at Nanaimo’s City Hall.

How are contracts handled?
How are assets disposed of?

What we can learn from Operation Gravel:
In the municipality of Mascouche, Quebec, public contracts were being awarded in a pre-determined process where only a few companies with political influence were enabled. This symbiotic relationship between construction companies and politicians saw both parties becoming wealthy and padding up unnecessary construction projects, ratcheting up huge amounts of debt which the citizens of Mascouche have been unable to pay off.

Bid BC:
The province of BC has a system called Bid BC where municipalities are supposed to publicly register their projects to allow for any company to bid on them. Of all the projects that the City of Nanaimo has undertaken in the last seven years, limited projects appear on this site. If they do appear, take a note of the published date versus the closing date.

Inflated project costs:
In the 2012 financial plan the completion of new City Hall Annex is quoted at $10,700,000. This figure is deceptive. The numbers exclude, for example, the cost of  new furniture which has escalated to $550,000.  The planning and design of water treatment plant at No. 1 Reservoir quoted at $6,790,000 will undoubtably be higher. This industrial building is slated to have the latest architectural treatments, speaks of excessive waste. The Colliery Dam removal project is another fine example of over-inflated project costs to burden the broken taxpayers of Nanaimo.

Results of Core Services Review
In 2011, Nanaimo City Council approved a consultant to conduct a  “core services review of contracting out” to evaluate whether there is a better way to deliver services.  One of the results of the core services review was to bring parking services in-house. Rather than saving money it has increased the costs because Council approved a private contractor to collect the coins from Nanaimo’s parking meters for $50,000 a year for a 5 year term. It might be cheaper to have free parking.

Higher taxes but broken infrastructure
From the City of Nanaimo five-year Financial Plan 2012 – 2016, here is a quote from the City Manager:

We know from the work we have already done that we are not spending enough on replacing and upgrading such services as roads, sewer, water and storm drains ……..

The 2012 to 2016 Capital Program projected the long-term debt outstanding at the end of 2011 to be $35.7 million. Due to the projected borrowing required to fund the capital plan the City’s debt level is expected to increase to $48.6 million by 2016.  These numbers are very conservative.  The new budget being presented today at the Committee of the Whole will show debt levels are on the rise. Ultimately, this means a tax increase again next year.

Residential taxes are the main source of revenue for the City of Nanaimo and the forecast is tax increases every year.  What is the breaking point for your average Nanaimo resident? We will soon find out.

All in the Family
Do we need a core review? It all depends whether it can be done at arms’ length. In a city where successive city managers were father and son, the tree roots run very deep.