The Cost of the Games

B.C. municipal governments have shovelled taxpayer money to the event in a big way

Bruce Constantineau, Vancouver Sun, Friday, January 23, 2009

Try putting a firm taxpayer-supported price tag on the 2010 Olympics.
Will B.C. pay just $600 million for the Games as the province insists, or will the real number be more like $2.5 billion, as suggested by former auditor-general Arn van Iersel?

Some Games observers feel the true federal/provincial/local government contribution will surpass the $6-billion mark, and maybe it will be worth it.

That's a subjective call.

But taxpayer money has surely flown to 2010 from myriad government sources -- some not so obvious -- and B.C. municipal governments have opened their money taps in a big way. Five B.C. communities have established official partnerships with Vanoc -- Vancouver, Whistler, Richmond, West Vancouver and Surrey -- and four more, including Port Moody, are negotiating to become "community contributors."

Here's a look at how the spending breaks down.

RICHMOND
The City of Richmond made one of the biggest splashes of any local government by committing $115 million to the $178-million Olympic Oval, but the city is confident it will more than cover that cost through casino revenues, the sale of land near the oval and development-cost charges on that land.

The city funds were paid from its capital budgets the past three years and are expected to be recovered upon completion of the casino funds payouts: $5 million a year over 10 years.

Richmond staff and council members spent more than $669,000 on oval and Olympic-related travel and accommodation from 2004 to 2008, and that doesn't include 2007 costs, which were not reported. The money paid for trips to previous Games in Torino and Beijing and to former Games sites in Calgary, Salt Lake City and Lillehammer.

Richmond will also spend about $500,000 on Olympics-related arts festivals from last year through 2010 and devote considerable staff time to Games projects and activities. The city estimated the value of that time was about $1.3 million in 2006 alone.

VANCOUVER
The City of Vancouver committed millions to the Games even before the athletes' village fiasco. The city has a $5-million Olympic operations budget -- $1 million a year from 2006 through 2010 -- as well as a $20-million Olympic legacy fund to be spent over three years ending in 2010.

The two budgets were used to cover about $180,000 in expenses arising from sending the mayor, councillors and city staff to the Turin and Beijing Games. Former mayor Sam Sullivan had about $27,300 in total expenses at those events.

City capital funding commitments include $25.6 million to upgrade the Killarney and Trout Lake rinks for use as Olympic practice facilities and $47.85 million towards the Hillcrest curling venue. The Hillcrest spending includes the entire $34.8-million cost for a new aquatic centre.

The city and Vanoc are working on the details of funding required to upgrade Britannia rink for use as an official practice venue.

The city also gave Vanoc what appeared to be a sweetheart deal when it leased 230,000 square feet of office space in two city-owned buildings to the organizing committee for $5 a square foot -- widely considered to be only a half or a third of the prevailing market rate.

Over the four-year term of the lease, that could be considered a subsidy of up to $9.2 million. But Vanoc spent about $11.5 million on building improvements the city will keep after the Games.

As host city, Vancouver is obligated to cover certain transportation, security and emergency planning costs during the Games, but funding details are still being negotiated.

In fact, many local politicians fear unexpected Olympics-related policing and transportation costs will be thrust upon them at the last minute.

"They've said everything will be covered on any extra TransLink expenses, but I'm from Missouri on that one. They'll have to show me," said Burnaby Mayor Derek Corrigan.

Vanoc says part of the price of Olympics tickets will be used to cover the costs of extra TransLink services during the Games.

Surrey Coun. Bob Bose expects local governments will have to pay for at least some of the costs arising if there are Games-related demonstrations or other activities needing police attention in their communities.

"That puts various municipalities at different levels of risk and I don't think that's fair," he said.

SURREY
Surrey officially joined the Olympic party last year when it agreed to build a $10.5-million Games Preparation Centre that will be used to recruit and train Games staff and volunteers. The city also paid Vanoc $2 million to become a "Venue City."

Eyebrows were raised when it was learned Surrey waived the right to defend itself in court if Vanoc sought damages if the centre wasn't built on time. Bose said that clause was "outrageous," but he feels Vanoc has been reasonable by allowing more flexibility on the building deadline. It was supposed to be built by February, but now looks like it will be ready some time this spring.

"The deadline is a bit of a moving target and we have some flexibility there," Vanoc director of corporate strategy Taleeb Noormohamed said in an interview. "Surrey has been an outstanding partner and we're working with them on a deadline that makes sense. We don't want to create undue and unnecessary pressure where none should exist."

Other Surrey Olympic costs include a $30,000 budget to send Mayor Dianne Watts, Coun. Linda Hepner and sports venues manager Gerry De Cicco to Torino in 2006, and $10,000 so far on a program to attract Olympic athletes to train in the city.

The preparation centre becomes a public recreation facility after the Games.
Watts said Surrey's deal with Vanoc helped it secure 52 modular housing units, worth about $18 million, that will be used for social housing in Surrey after the Games. The units will be used for athletes' housing in Whistler during the Olympics.

Watts said being a "Venue City" allows Surrey to market itself under the Olympic banner and hold Games-related events and celebrations.

"Given that Surrey is a community of families and children, sport is a significant driving factor for the city so we want our kids to experience Olympic activities," she said.

"Having this type of exposure also helps showcase Surrey to businesses, which certainly helps as we go through these economic times."

WHISTLER
Whistler spent more than $214,000 to send a large delegation to Torino, with those expenses partially offset by a $125,000 federal grant. Mayor Ken Melamed attended the Beijing Games last year, but his costs were covered by an anonymous private citizen.

Whistler's official Olympic budget lists about $7.6 million in municipal costs from 2008 through 2010, but that doesn't include Games-time operations costs -- such as policing and transportation -- that are still to be determined. The budget includes $2.9 million for a Games office, $1 million for celebration sites, $650,000 for volunteer and staff engagement, $500,000 for hosting and $500,000 for "showcasing Whistler."

Municipal costs incurred before 2008 include a $3.65-million contribution to the Whistler Athletes Centre and about $885,000 to run the Games office in 2006 and 2007.

The $12.35 million in direct costs attributed to the Games so far from 2006 through 2010 represents about 19 per cent of Whistler's 2008 operating budget.

WEST VANCOUVER
West Vancouver became an official Venue City without using local taxpayer money when six wealthy families donated the $1-million payment required by Vanoc.

West Vancouver 2010 managing director Rob Whittle said that without the private money, the community could have been in the strange position of having official Olympic events taking place on Cypress Mountain and not being an official Venue City.

"West Vancouver is a very affluent community but it doesn't have a large industrial tax base and a huge budget," he said. "That $1 million got us official status and allowed us to hire staff to inject excitement and get people engaged."

West Vancouver 2010 will hold several fundraising events and look for corporate sponsors to help pay for community events and Live Site celebrations to be held in West Vancouver's new community centre. Whittle hopes to have a budget of up to $5 million.

West Vancouver didn't send anyone to Beijing last year, but the mayor and chief administrative officer went to Torino for a total cost of about $7,600.

PORT MOODY AND BEYOND
Port Moody Mayor Joe Trasolini said his city is close to a deal with Vanoc that would see it become an official partner without having to pay up to $1.5 million in cash. It will instead provide in-kind services, including the use of its new Olympic-sized ice rink and recreation centre.

"A small community of 31,000 can't afford to pay the kind of money that was being asked for," Trasolini said. "This will be a much more reasonable arrangement."

Noormohamed said Vanoc is also in "advanced discussions" with three other Metro Vancouver communities looking to become community contributors.

"There are types of facilities and services we need to put on the Games and they can help," he said. "We need places to park buses and cars and other kinds of space where things can occur."

Delta expects to spend about $100,000 on a program to celebrate the Olympics by planting 20,100 trees between 2005 and 2010. Delta officials say volunteer and corporate support is likely worth four times that amount.

The cost to municipal taxpayers goes beyond the Lower Mainland.

Several B.C. communities outside Metro Vancouver -- including Comox Valley and Prince George -- have sent delegations to previous Games to prepare for business opportunities arising from the 2010 Olympics. Prince George spent about $40,000 to send a delegation to Torino.

B.C. colleges and universities have also become official Olympic partners by providing in-kind services to Vanoc. The University of B.C. has incurred $10.5 million in direct costs, including $10 million for the UBC Winter Sports Centre and $500,000 for the Games Secretariat.

bconstantineau@vancouversun.com

HOW THE NUMBERS ADD UP SO FAR -- AT LEAST THOSE WE KNOW
The various levels of government are spending a combined $5.84 billion on the Games. We still don't know the full cost of: security (budgeted at $175 million, but now estimated at up to $1 billion); the Vancouver Olympic Athletes' Village; 2010 curriculum; indirect labour costs; municipal torch relay celebrations; municipal programs designed to piggyback on the Olympics.

Federal
$732,726,000

Provincial
$4,831,763,000

Other provinces
Saskatchewan $1,500,000
Manitoba $1,500,000
Ontario $5,000,000
Yukon/N.W.T./Nunavut $500,000
N.L. $1,500,000
Quebec $5,000,000
Total $15,000,000

Municipalities
$261,373,600
Total
$5,840,862,600

Games venues $235,000,000
Games live sites $20,000,000
Legacy Endowment Funds $55,000,000
Security $87,500,000
Medical services $13,000,000
Paralympic Operations $20,000,000
First Nations Legacies $10,000,000
Sports Legacies $10,000,000
Whistler Legacies $10,000,000
Contingency $139,500,000
# Legacies Now $170,000,000
Own the Podium $5,000,000
*Olympic Secretariat Capital $3,163,000
*Olympic Secretariat Operating $47,100,000
BC Hydro $15,000,000
BC Lottery $15,000,000
ICBC $6,000,000
Security $87,500,000
Total $948,763,000

Infrastructure projects $290,000,000
Own the Podium $55,000,000
Paralympic operating costs $20,000,000
Legacy Endowment Fund $55,000,000
Celebration sites program $20,000,000
Opening Ceremony $20,000,000
Torch relays $24,500,000
Tourism promotions $26,000,000
First Nations Olympic Legacy Agreements $34,550,000
Four Host First Nations Society $2,000,000
Security, immigration and border services $127,600,000
Olympic and Paralympic Federal Secretariat $35,000,000
2007 audit $76,000
Mint, Cda Post, Vcr Port Corp. $23,000,000
Total 732,726,000

OTHER COSTS (SHARED)
*Sea to Sky Highway $1,000,000,000
*Vancouver Convention & Exhibition Centre $883,000,000
Canada Line $2,000,000,000
Total $3,883,000,000

*The province says these are not Olympic costs, but successive auditors general have said they should be included.

Richmond
Oval $115,000,000
Travel (2004-08) $669,000
Oly-related festivals $500,000
Staff time 2006 $1,300,000
Total $117,469,000

Vancouver
Olympic operations $5,000,000
Legacy fund $20,000,000
Travel $180,000
Killarney, Trout Lake $25,600,000
Hillcrest $47,850,000
Vanoc HQ $9,200,000
Pre-Games Plebiscite $538,000
Total $108,368,000

Surrey
Games prep centre $10,500,000
Sponsorship $2,000,000
Travel $30,000
Athlete Attraction Program $10,000
Total $12,540,000

Whistler
2008-10 direct costs $7,600,000
Travel $214,000
Athletes Centre $3,650,000
Games office pre-2008 $885,000
Total $12,349,000

UBC
Winter Sports Centre $10,000,000
Games Secretariat $500,000
Total $10,500,000

West Vancouver
Travel $7,600

Delta
Tree planting $100,000

Prince George
Travel $40,000

TOTAL $261,373,600