Nanoose Bay Reservoir Improvement Project - Alternative Approval Process

The Regional District of Nanaimo (RDN) is proposing a project to accommodate planned growth and improve the long-term fire protection and drinking water infrastructure in the Nanoose Bay Peninsula Water Service Area (NBPWSA) in Electoral Area E of the RDN. The proposed project will include the renewal of the existing Arbutus Reservoir and construction of one additional reservoir on Notch Hill. These water service improvements are necessary to meet future water demand, security, and safety requirements and are not considered to be optional.

Reserve funds and Development Cost Charges (DCCs) will be used to fund approximately half of the proposed reservoir improvement costs. The remaining project costs could be borrowed from the Municipal Finance Authority on behalf of the property owners. An Alternative Approval Process (AAP) is being used to determine if the NBPWSA property owners support borrowing funds for this project.

If less than ten per cent of electors within the NBPWSA submit Elector Response Forms through the AAP, this will be considered adequate support from the property owners involved and the borrowing proposal will go to the RDN Board for approval before the project moves forward as designed.

The Arbutus Reservoir, located on Link Place, has been in service since 1982 and requires renewal or replacement. Renewing the existing reservoir in-place has been determined to cost much less than any other alternatives and will allow the existing location to be re-used.

The need for an additional water storage reservoir on Notch Hill is identified in the Development Agreement with the Lakes District developer, as well as being part of the RDN’s capital improvement plan. As part of the development agreement, the RDN’s statutory right-of-way on Notch Hill will be expanded to accommodate another reservoir and no additional land will need to be purchased.

As outlined in the table below, the total reservoir improvement project budget is estimated to be $2.4M. The reserve funds and DCCs only cover about half of the total project costs. The remaining project costs could be borrowed from the Municipal Finance Authority and paid back by taxpayers over a 25-year period. If the project receives community support and proceeds to construction, property owners would pay a maximum of $465 each, or an additional $34/year for 25 years on their taxes. After construction is complete and all costs have been accounted for, property owners will be given the option to pay their share of the project costs as a lump sum (to save interest) or to amortize their share of the project costs (as debt) on their taxes. The final amount owing will depend on the lending rate in place at the time of borrowing.

Summary of Anticipated Project Funding:

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