Thursday, November 06, 2008




Updated Nov. 8/08

Candidates in the upcoming Nanaimo Civic Election were asked the following four questions. The answers published here are their responses exactly as received in the order they were received.

Answers from other candidates will be published as they are received.

The four questions posed to all candidates are:

1. Should a new contractor be sought for the PNC Hotel project? If not at the present time, how much more time should Millennium be given to actually begin construction?

2. What percentage should the City taxpayer contribute to the funding of a future Sports Multiplex?

3. Should City cash reserves be used to fund projects rather than increasing taxes?

4. What is the accumulated percentage tax increase over the past five years, and what is the expected percentage tax increase for the coming five years?

Brunie Brunie

A new contractor should not be sought yet. These are unsettled times to be starting a new project.It would be prudent to at least wait until the spring of 2009.

At this time I am not qualified to give out a percentage however it is important for the

taxpayer to contribute a reasonable amount to this project.

With the markets as unstable as they are it would be best for the city to hang onto the cash reserves and not increase taxes just yet.

At this time the economy is at a standstill and we must all wait and see what happens to the global developments

Ron Bolin

1. If, as I currently believe to be true, upon receipt of the agreed 30 day notice, our "partners" do not perform or substantially demonstrate the ability to perform, we should recover the title to the hotel land, withdraw the option on the Foundry/Arena land, demand the fees, costs and charges due us and reconsider our options. It is, I believe, very unlikely that anyone would make a credible bid for the hotel in the current economic circumstances and we will need to determine what actions could be taken to maximize the return on our investment or more likely to minimize our losses. Part of this will rest on the details of our agreement with Atlific and whether there is any flexibility regarding the current operation of the centre.

2. We should contribute only as much money as proper and independant financial opinion can demonstrate will be returned directly to city taxpayers. No trickle down economics. We should be investors, not sponsors.

3. Reserves are important for maintenance and for unforeseen events. We, however, have had some reserves act as slush funds for pet projects. I believe that about $30 million of "rainy day" reserve funds (rather than the $19.1 originally specified) have already gone to the conference centre. Reserve accounts should be examined closely and defined as either legislated funds (required) or convenience funds (optional). I have argued for some time for a cap on optional funds which are too often used as slush funds and would not find a problem with using some to lower taxes.

4. I would have to do some research to look at the increase over the last five years, but believe the rate to have been as high or higher than what is projected, I have, however, forwarded minded as I am, done the work for the coming years from the city's 2008-2012 Financial Plan. The increases projected for this period are: Industrial Property: -58% (this is not a typo but a large reduction in taxation on our industrial base), Commercial Property: 17%, and Residential Property: 23%. Remembering that what it not collected in one area must be collected in another, these percentages are arguable, especially in the light of the current economic situation. But before getting too exercised about the reduction in the industrial rate we need to remember that the values of industrial land are not market based, but are scheduled by law. Given the current situation in the province, it would have been better for the province to recognize the greatly deflated value of some of our heavy industrial properties and acted accordingly rather than letting the problem fall on municipalities like Nanaimo. It is also important to remember that the contribution of industrial land to Nanaimo's tax base is, all in all, rather small.

Bill Bestwick

1. A complete and thorough re-examination of the PNC Hotel Agreement and the implications of exercising the 30 day "cure" or notice to Millenium must be of the highest priority for the new Council.

If Millenium proceeds as indicated to reach completion by June of 2010, conditions of consequence must be included and enforcable to enact financial security for delays in opening. The only way in my opinion to "turn up the heat" on Millenium is to enforce financial penalty.

If Millenium is not prepared to enter a revised agreement with such conditions, then sever the agreement and commence the process to find a new Hotel partner.

2. Nanaimo, like all cities have historically provided and paid for Recreational facilities including Pools, Arenas, Community Centres, playfields and other amenities. One must realize that the current facility known as Beban Park is reaching its life cycle and is out of date and aging. Furthermore the venue when built was built for a community of approximately 40,000 residents. We are now approaching 90,000 people with estimates of 120,000 by 2020. We will need a new Sports and Entertainment Centre with or without private participation.

I am convinced that the City is in need of an attraction centre and I am convinced the City is in a position to commence the planning and process for such a facility. I am also convinced that a private partner(s) is imperative to expedite such a development in a timely fashion.

To identify a specific dollar amount the City should contribute is a difficult answer pending the size and scope of the venue to be considered. At the very least I believe the City should contribute property, services and a significant portion of the capital expenditure to replace its aging and highest utilized entertainment centre.

3. City reserves pending the amount of the capital project should definitely be considered in part or whole to fund projects without increasing taxes to do so. Or at least in part to keep taxes at a resonable level while increasing the services to the City and its residents. A common sense approach with balance.

4. The accumulated tax increases average between 4 and 5 % in the past five years and are forecast to increase beyond that in the next five years. This trend needs to be addressed by the incoming Council.

Rob Campbell

question 1

Millennium Contracting should be held accountable for these delays. We should never have entered into this venture to begin with, but that's water under the bridge. For the conference center to be successful we need a hotel to put the whole package together, saying that I think we should accept new proposals from other outfits. I have heard but I am not certain that there is financial damages Millennium should be paying the city back, if that is so we should demand it immediately. The City should never have given up park space for condos old Pete Maffeo would be rolling in his grave.

question 2
I did not want to demolish our Civic Arena either but it's done, given that I understand the need for more facilities. I believe involved children tend to be healthier and get in to less major trouble. Our new complex should be built by a partnership with profits going to the city and the developer. I would like to see city staff run it on a daily basis so we can control costs and quality. Too often private contractors end up losing focus as to why it was built to begin with, creating sub-standard jobs with transient workers. The original costs should be approximately 25% city and 75% private. If the project is well run we should realize a great deal of profit.

question 3

Yes we could use some of that money for this type of thing and the profits could go back in to the reserve. I have some revenue generating ideas that could raise a lot of money, we could use this new money also, or instead of reserve money.

question 4

I know my property tax has gone up way too much in the past 5 years, my ideas would help eliminate the need to raise property tax. I read with horror the cities plan of 5%, I find it outrageous. I feel there is no need to raise taxes over the next 5 years.

Blake McGuffie

I would cancel this agreement as soon as legally possible, and then seek new potential developers. I am aware potential developers are ready to step forward.

The City cannot afford to contribute cash to a multiplex at this time either for capital or operating costs. I do believe the City should consider providing the land on which such a complex could be built by PRIVATE funds.

City reserves exceeded $ 125. million at the end of last year, with total debt at about $ 50. million. Some of these reserves are justified for future capital projects, but a considerable amount could be used to keep taxes to last year's level. New growth should be the source of funds for operating cost increases. I am committed to NO TAX INCREASES.

The accumulated tax increases over the past five years exceed 25 %, and the projected tax increases are projected to another 25 % over the next five years. As previously committed I will not support ANY TAX INCREASES.

Angela Negrin

That is it! Cut the cord, we are done! This land is way to valuable! This space has so much potential. The city has made a poor decision and I don't the taxpayers to suffer anymore, or sign anymore deals with these people.

0% I support a Multiplex, but not one that is funded by tax payers. I would like to see UVI have the multiplex. This structure should be a private venture. I will support services to be built around the multiplex to ensure its success. This location is very close to the parkway, swimming pool and ice rinks.

This money is reserved for emergencies. If there is any room in our reserves to help pay down the debt i think this would be wise. I want Nanaimo to be a city we call all afford to live and do business in. I do admit we have a big mess to clean up.

By my quick calculations, property taxes have increased over 15% in the the last 5 years. My prediction is that we will match that number in 2009 alone if we don't change our municipal government now! I want everyone to be able to afford to live here, not just the rich. Cost effective investments like an efficient transit system will help alleviate density problems, parking/car/highway problems, environmental problems and generally make for a busier Nanaimo. We need less dealings in real estate and more dealings in governing our services!

Fred Pattje

Question 1

We already have had two major amendments to the hotel portion of the PNC partnering agreement and my patience is wearing very thin.

Since it, under current economic circumstances, is unlikely that another partner would come forward, I believe it to be expedient for the next Council to revisit this one more and final time, set realistic deadlines for Millennium and, for once, stick with those new timelines!

After that it is " three strikes and you are out!" , using the 30 days notice, getting all our lands back and recuperate the costs incurred!

Question 2

A future Sports Multiplex will have to be private project and I am not in favour of any taxpayer funding at this time!

One of the grievous errors made by the City in connection with the PNC was that no credible benefit-cost analysis was ever undertaken and matters such as economic impacts and economic benefits were taken as being the same.........Similarly no proper risk analysis was ever commissioned and the City proceeded at its own peril, the consequences of which we are now saddled with in connection with the PNC

If, with regards to a Multiplex, such a benefit-cost analysis, combined with a proper risk assessment would show that taxpayers could be absolutely sure to have their investment returned, I might reconsider but that would seem an unlikely scenario given the present economic situation.

Question 3

City cash reserves could be used to fund some projects, provided a cap on how much could be spent was established so that we do not end up creating a slush fund for politically expedient projects and forget about lowering taxes......

Question 4

I believe the accumulated tax increase over the five past years to have been around the 25% mark and that we will exceed this in the coming five years, something which is of grave concern to me.

Bill Holdom

1. The City has been open to other proposals for building the PNC hotel ever since Millenium/Suro started missing deadlines, and other parties have expressed interest. However, their timelines and required City incentives have generally exceeded those Millenium agreed to, so to date there has been no compelling reason to consider switching to a new contractor.

It’s tough to say how much more time we should give Millenium. We should of course be sensitive to current economic uncertainty and financing difficulties that would affect any contractor, but we can accept delays for only so long. I would want to begin the process of terminating the agreement if work on foundations has not begun by December 2008. Obviously, I would feel much stronger about doing that if the City had another contractor waiting in the wings who could start work more quickly.

2. 0%.

3. Of course – that’s their purpose. Most City reserves are non-discretionary and can be used ONLY to fund the capital projects for which they were created. And we do routinely use the $6 - $7million we usually have available in discretionary reserves for other capital projects and acquisitions rather than increase taxes.

4. This is a factual question. Rather than risk a miscalculation, I would refer you to Brian Clemens in the City Finance Department, 250-754-4251, for exact information. In general, I would say that residential tax increases have been running a bit above inflation in the past few years and are projected to continue doing so unless the City changes policy direction, and/or delays the completion of some of its current projects, and/or attracts new commercial and industrial development to expand the tax base. As I have in the past, I’ll be examining all three of these possibilities in future budget reviews if I’m re-elected.

Jim Kipp

1. Considering a few of the current economic conditions it is the most fiscally responsible move.
Raising capital for any company currently is a daunting task and I understand Millennium is stretched with Olympic commitments. Also with values going down, a more competitive market could lead to a better price or a commitment to perform.

Use the last step written notice, with shortest response time, which I believe to be 30 days and default the contract, recover all land and any and all financial amounts owed.

2. Zero tax dollars as a direct contribution. Nanaimo has always had a proud sport and cultural history based around our facilities. If a Multi-plex is our next project the city needs to indirectly contribute to feel pride and ownership. Using other incentive based City contributions for example; in-kind contribution, reasonable servicing costs, green incentive tax breaks or local green initiatives breaks in user rates. Further, feasibility studies including financial, social (transportation, services, accommodation) and environmental impacts need to be completed and not just by one group.

I do support this project that starts with partnership. My vision starts with one end of the building having the fa├žade of our lost Civic arena (40’s Art Deco architecture) facing the mountain and the other a massive post long house fa├žade facing the sea.

3. Yes, but with precursor that by law we have limits to discretionary funds. Reserves are mandated for emergency situations, infrastructure failures and other legislated issues. With that said, the tax fatigue that we face is reason enough to review the reserves allocations to see what is legally available to the city.

4. The calculations seem to vary with different formulas; you have to love creative accounting. Past five years has been at least a 20% to 25% cumulative increase from 2003 levels with the projection to be a similar "tax growth" of 20% by 2013.

Ted Greves

Should a new contractor be sought for the PNC Hotel Project? If not at the present time, how much more time should Millennium be given to actually begin construction?

Once the process described below has run its course with no satisfaction, there should be (if there already isn’t) an open competition for a new contractor. It has gone on too long. Construction has to start now. Unfortunately, I doubt given the economic times that anyone would be found to construct the building unless they are given incentives to proceed like Millennium/Suro was given. I believe the City is in a no-win situation.

The Partnering Agreement with Millennium/Suro (M/S) was terminated as of January 15/2007. They have been given three extensions because of delays in securing financing. Construction was to start January 31/08. The footings for the hotel were to start on May 31/08 and they did not. To show good faith about a year ago M/S gave a deposit of $450,000 to the city if construction did not start on schedule. It hasn’t.

M/S has now applied for a development permit approval by Council and the council meeting for November the 10th has been cancelled. The next Council Meeting is November the 24th and if the approval is given at that meeting the process continues. Once all the permit processes are complete, I believe they should be given 90 days to start construction.

What percentage should the City taxpayer contribute to the funding of a future Sports Multiplex?

Perhaps the value of the land and the cost of developing the infrastructure (sewer, water, roads, lighting etc. to the facility) and a split of the cost. Of course it depends on the size and cost of the facility.

Should City cash reserves be used to fund projects rather than increasing taxes?

Unfortunately, the cash reserves are still tax money and are just a way of deferring the payment. But reserves such as the Property Acquisition Reserve Fund of $2.5 million, General Capital Reserve Fund of $7.3 million, Sustainability Initiatives Reserve Fund of $.5 million, and City Wide Sewer Reserve Fund of $4.7 million could be tapped into. But the taxes would have to be raised in the following years to replenish those funds to an adequate level.

What is the accumulated percentage tax increase over the past five years, and what is the expected percentage tax increase for the coming five years?

Please contact the City for the accumulated percentage increase over the past five years. For the next five the expected increase according to the five year financial plan is:
























James Guy Younger

#1 I believe the deal is dead, or down to the last few gasps for air. I don`t think anyone else will want to build a hotel there with the current economic uncertenty. That is the real concern. I would love to be wrong on this as we need a hotel on that spot.

#2 Land and fees only.

#3 Tax increases to pay for projects only. Fiscal restraint folks.

#4 2003-2007 3.36%.

2008-2012 residential 5.16% commercial 3.84% projected

#5 I hope it is ok but I didn`t ask for the cities position first

Larry Iwaskow

Meet the contract or settle up. Utilize for public use or sell for market value.

0% until a complete business proposal and schedule has been presented and approved.

What projects? 0% increase for 2010

Personally 30%plus.

Jack Arnold

1.After the news announcement that the Millenium group has a "special deal" with the Vancouver City council....(it was on global News at 6:00 this A.M.) let's just say goodbyw to these people.

It is clear what their track record has been and will likely be here... does this mean they are going to play default default help and please loan us a big chunk...not if I am involved.

2. As I have repeatedly stated during this campaign... I feel a private multi plex is the best idea, with the city having minimal financial involvement...Let a business that knows that business run it..rather than have the City council and and staff attempt to take on a "new hat"

3.There may be situations where cash reserves should be used, and by the same token, tax revisions may have to be looked at up or down... Again some projects which are definitely value added...for example infrastructure needs within the existing city... may make this situation arise. Major projects like a sportsmultiplex should be handles as I stated in the previous question.

4. I cannot off the top of my head give you exact percentages...we can get them from cityhall, HOWEVER, my concern is the taxes THIS YEAR and for the next several years as we try to make the NEW CENTRE and the down town core pay its way....and look after critical low income housing and other needs, as well as the infrastructure and help the city businesses and the citizens in the face of the massive economic and all over the world.

Bill Forbes

1. Should a new contractor be sought for the PNC Hotel project? If not at the present time, how much more time should Millennium be given to actually begin construction?

We should terminate the existing agreement with the current developer; get our land back and the land at Maffeo Sutton Park first. We should then discover through research if a hotel is needed and/or feasible. If it is then we can look for a new developer and make it clear that there is no land for condominiums and no $10.00 parcels for sale for hotels.

2. What percentage should the City taxpayer contribute to the funding of a future Sports Multiplex?

Zero. The city should stay out of the Mega Project business unless it is core infrastructure. I’m all for a Multiplex that is sited logically through the proper studies, but there should be no funding, land or services from the city. A Multiplex should be a private enterprise venture entirely.

3. Should City cash reserves be used to fund projects rather than increasing taxes?

Some city cash reserves are. Cash reserves are split up in different ways, some are covenanted for certain projects and some are reserved for shortfalls and some are in short term market vehicles. Yes some cash reserves should be spent to fund core infrastructure projects, but this must be done prudently so we always have a cash buffer ensuring there is no spike in taxes to compensate for unforeseen expenses.

4. What is the accumulated percentage tax increase over the past five years, and what is the expected percentage tax increase for the coming five years?

For residential tax increases the rates from 2003 to 2007 respectively are: 2.2%, 1.4%, 3.3%, 3.4% and 6.5%. For the coming five years residential taxes increases respectively are projected to be: 3.9%, 5.5%, 5.5%, 4.5% and 5.4%.

Loyd Sherry

1)The new Council need to review the current partnering agreement and decide based on all information available. To cancel and call a request for proposal on a new developer or extend the current partnership.

2) The City has called for a review of potential site for a Multiplex in the downtown area. Once a suitable site has been identified, the City should share that information with anyone interested in building a Multiplex. At the current time, I think the community is not ready for an additional tax increase so the developer would be responsible for these costs.

3) Reserves are used to reduce the capital cost of projects that have been identified in the 5-year Capital Project list. Using these reserves reduces the amount of capitol needed to be borrowed. Taxes are raised to cover the cost of amortizing these borrowed funds.

4) The accumulated tax increase over the past 5 years has been in the range of 3.2% to 3.7%.

The expected tax increase over the next 5 years from 2009 to 2012 is in the range between 3.3% and 4.3%.


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