Vanoc Cuts Budget in Face of Financial Crisis
Four budget items to be fine-tuned
Games organizers concerned over challenging economic situation
Damian Inwood, The Province, Wednesday, December 10, 2008
Vancouver 2010 has asked Olympic officials to fine-tune four budget items, including reducing the future size of the workforce.
Board chairman Jack Poole said that while 2010 has not yet been hit by the economic downtown "it's a nervous environment and one that demands caution and extra diligence."
He said that while the budget was approved "in principle," the final numbers will be presented to the board in January and the budget released shortly after that.
"Anybody who is not nervous today, I would suggest, they are asleep," said Poole. "This is an environment that nobody alive today has experienced. It's the unknown unknowns that keep us awake at night."
Four areas that Vancouver 2010 must refine are:
- The $19-million "look of the Games" budget that deals with all signage and banners.
- The accommodation budget for workers in the Sea-to-Sky corridor.
- The full-time workforce numbers, originally set at 1,500, but which Poole says will now be "somewhat smaller than anticipated."
- Developing revenue through "innovative programs."
Vancouver 2010 CEO John Furlong said the new budget will be "roughly in the same place" as a $1.63-billion budget that was part of a business plan released in May 2007.
"We're not of the view that the review of these matters will change our budget estimates dramatically," he said.
The original budget contained a $100-million contingency but officials were not able to say how much bigger or smaller it may be in the revised figures.
Furlong said the new budget needs to be "resilient and robust enough to tackle anything that comes along."
He said existing staff won't be laid off but suggested some could be moved or redeployed.
Furlong said that all promised sponsorship dollars have been paid on time.
Marketing boss Dave Cobb said $745 million in domestic sponsorships have been committed, but there's a $15-million shortfall.
"We won't spend that money until we're confident we'll get it," he said.
Cobb said Vancouver 2010 regularly talks with the International Olympic Committee about $201 million it has committed from its international sponsorship program.
The IOC currently only has nine of 11 international sponsors and is short about $26 million, he said.
Cobb said the IOC is expressing "a high degree of confidence" it will fund the full $201 million.
NDP Olympic critic Harry Bains said the budget review is worrying.
"They are saying we have to wait another month for numbers," he said. "The fact the board has asked Vancouver 2010 to go back and do some fine-tuning shows that members are nervous."
© The Vancouver Province 2008