Wednesday, June 17, 2009

Accountability in Olympic Village Construction

Vancouver Sun


Mayer Gregor Robertson swept the elections with the promise of accountability in city hall, especially in the construction project scandal surrounding the Olympic Village. With another 10% cost increase to the already stagger $600,000 per unit cost to building these social housing units, the price tag is ridiculous. At $660,000, there are new luxury three bedroom apartments available all along the Canada Line, minutes from the Olympic Village. By the way, the Canada Line, a $2 billion dollar project of engineering wonders was completed under budget and ahead of schedule, going on line this September. Something is wrong with the Village development project and accountability means those responsible for the wasted taxpayer money must be identified and held accountable. The developer, most of all, must be held accountable for every penny spent. It is highly suspicious that ANY housing unit can cost $660,000 to build. Where is all the money going?


Vancouver taxpayers are being asked to cough up another $21.9 million in Olympic-related cost overruns.

This time it relates mostly to finishing the city’s affordable housing commitment in the Southeast False Creek development.

If approved at Thursday’s council committee on city services and budgets, it will bring to about $45 million the overruns on civic projects that were fast-tracked because of the 2010 Winter Olympics.

Vancouver is already over budget by about $23 million on several parks-related projects, including the new Trout Lake and Killarney training arenas and the Hillcrest curling venue, according to Coun. Geoff Meggs. Those three were built as Olympic venues or training facilities, with the Vancouver Organizing Committee contributing only a portion of the costs.

“In my view, taxpayers are having to pay for $45 million in unbudgeted costs associated with hosting the Olympics,” Meggs said.

He blamed the overruns on the previous Non-Partisan Association-dominated council. “I hope this lays to rest the view that the NPA were prudent money managers,” he said.

The latest overruns aren’t strictly related to hosting the Olympics but involve civic projects on the south shore of False Creek, which will be used as the Vancouver Olympic Athletes Village. More than $15 million of the $21.9 million would go towards completing 252 units of affordable housing in the village. Millennium Southeast False Creek Properties, which is building the rest of the village under a purchase agreement, is also building nine city-owned social housing sites and a civic centre.

Overall, the cost of constructing the subsidized housing on the village site has risen to $110 million. The city doesn’t yet know what rental rates it will have to charge to recover the investment while still keeping the units affordable.

The city needs another $5.5 million to finish the waterfront civic centre, now expected to cost $36 million. Staff also want another $1.3 million to run the project office, which apparently ran out of money in the spring of 2008.

“How can a project office run for all this time without funding?” Meggs asked. “I haven’t been able to get an answer to that.”

The city’s restoration of the historic Salt Building in the Southeast False Creek neighbourhood is also over budget. Originally scheduled to cost $6.5 million, it’s now ballooned to $15.1 million. The building, being restored by a private consortium, is destined to house a pub, bakery and restaurant. Funds were approved in March and weren’t part of Thursday’s requisition.

Meanwhile, Vanoc says it is in good financial shape going into the last eight months before the Olympics.

Its latest financial quarterly report, released Tuesday, showed it is flush with cash at a time when it is about to go on a major spending spree. But it also hints that the faltering economy has knocked out a number of potential suppliers, meaning some costs could rise. It has also decided to break up its massive food and beverage requirements and give contracts out to smaller companies.

Executive vice-president Dave Cobb said Vanoc will go with many smaller providers because of the logistical difficulty in giving the contract to one single supplier.

Vanoc says it had $129 million more in revenues than in expenses for the quarter ending April 30. The money largely comes from payments from the International Olympic Committee and sponsors, as well as nearly $53 million from the recent sale of tickets to sponsors and national Olympic committees. The amount doesn’t include the most recent public sale of tickets.

Overall, Vanoc so far has revenues of $847 million and expenses of $665 million on an operations budget of $1.755 billion.

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