Basketball in the 2015 PanAms. (ATR)
(ATR) The Ontario auditor general says the Toronto 2015 Pan Am and Parapan Am Games “went off without a major hitch”.
But the report also notes the PanAms cost much more than originally budgeted. Auditor Bonnie Lysyk said the Games cost $342 million more than the adjusted 2009 bid budget of $2.4 billion.
“Although the costs of the Games were primarily shared by the federal, provincial and municipal governments, Ontario had agreed to pay for any additional costs incurred for organizing and hosting the Games,” Lysyk wrote. “As such, Ontario incurred the majority of the $342 million, so it contributed an additional $304 million, or 61% more than its 2009 commitment of $500 million (excluding the Athletes’ Village).”
Lysyk estimated the final cost of the Games at $1.794 billion, compared to the 2009 bid of $1.429 billion (in 2014 dollars).
Her report pinpointed numerous problems. Site remediation and flood mitigation work planned before the bid increased the Pan American Village budget of $1 billion over by $242 million. The size and features of the site were reduced twice to remain within budget.
Bundling of construction projects led to delays and significant deficiencies, some of which remain almost a year after the Games. For instance, City of Hamilton is claiming $35 million in damages against the contractor over water leaks and other problems at Tim Hortons Field, the men’s and women’s football venue that is the permanent home of the Hamilton Tiger-Cats of the Canadian Football League.
Lysyk also found problems in the completion bonus program for 53 senior employees of TO2015. The organizing committee asked the Ontario government in September 2014 for a $74 million budget increase to deal with cost pressures.
“Ontario had a choice to provide this funding under an agreement that would have disallowed 25% of the $5.3-million bonus, which totaled $1.3 million, under TO2015’s own bonus design. However, the government chose not to use this option when it approved the budget increase; instead, it asked the TO2015 board of directors to consider the budget increase when determining bonuses. The TO2015 board chose to pay the full bonus.”
TO2015 exceeded its sponsorship target by 29 percent, but fell $25.5 million short on cash contributions
according to the report.
“In addition, of the $35.8 million in cash sponsorships, $4.2 million was from provincial agencies to support the Games. The cash sponsorship shortfall was offset by the value of the cost-relieving value-in-kind contributions that TO2015 had not previously recorded in its financial statements.”
The Games had budgeted to sell 1.4 million tickets, but ended up selling 1.1 million. Of those, 908,000 were bought by the public and the remainder by sponsors, donors and the Games family.
While it appeared that TO2015 exceeded its original projection of $38.2 million ticket revenue by $1.1 million, Lysyk found $2.3 million was actually paid to the ticket vendor for service charges, meaning ticket revenue was actually $1.2 million less than projected.
Lysyk did find, however, that TO2015 appropriately considered budgetary risks from a 2009 PriceWaterhouseCoopers report and that it generally followed sound procurement processes.
Unlike Vancouver 2010, the Toronto 2015 organizing committee was subject to freedom of information laws and the province auditor general conducted a post-event report.
A response from TO2015, included in the report, said it met its objective to leave a legacy and deliver an “outstanding success” that was commended by the Pan American Sports Organization for delivering the best Games ever.
“The Auditor General validates in her report that the sport infrastructure and social legacies were achieved for the use of communities where the 10 new and 15 renovated facilities are located,” said the TO2015 response.
“The Canadian Olympic Committee is proud of the work done by the Toronto 2015 Organizing Committee and applauds the Ontario Government for their unwavering support of these Games,” said a prepared statement from COC CEO Chris Overholt.
“The Toronto 2015 Pan Am Games only served to cement Canada’s reputation as a preeminent sporting nation and world-class event destination. We will continue relentlessly promoting Canada as a host nation for a wide range of international sporting events.”
Earlier this year, COC asked several municipalities across Canada for expressions of interest in bidding for the 2026 Winter Olympics and 2028 Summer Olympics. It set a June 30 deadline.
Written by Bob Mackin in Vancouver.
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