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Games trust loses value in 2011

Richmond, Whistler venues receive $2.7 million from legacy fund
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Crowd sourcing The second annual Sigge's P'ayakentsut at Whistler Olympic Park in February is one example of an event that's helping Whistler Sport Legacies recover operating costs. Photo BY andrew Mitchell

The total value of the Games Operating trust declined in 2011 with total cash and assets of $110.1 million at the end of the year — almost exactly the amount that was set aside by the Government of Canada and Government of British Columbia back in 2003 to ensure the long-term viability of the 2010 Winter Games venues.

It's been a rocky road to get the fund back to where it started. At one point in 2007, before the economic crisis, the fund was valued at over $131 million. It lost almost a quarter of its value to dip below $100 million after the 2008 market crash. The fund slowly regained value and at the end of 2010 it was valued at $114.7 million.

According to financial statements, the fund earned just one per cent interest over 2011, which works out to just over one million dollars. However, due to the funding formula, both partners in the fund — Whistler Sport Legacies and the City of Richmond — asked for, and received, the maximum disbursement of five per cent.

According to the WSL, the formula for disbursements is up to five per cent of the rolling three-year value of the funds held by the Games Operating Trust, including half the eligible disbursement from the contingency fund that's held in trust for both WSL and Richmond.

As well, the disbursement is not directly tied to the interest earned, and can exceed that amount if requested by the partners.

B.C. and Canada were equal partners in the fund when it was created, with each contributing $55 million. The value was divided between Whistler Sport Legacies (WSL), which operates Whistler Olympic Park and Whistler Sliding Centre, and the City of Richmond, which operates the former speed skating oval as a community centre and high performance gym. Each partner benefits from 40 per cent of the fund's value, with the other 20 per cent being held in a contingency fund.

At the end of 2010, WSL's fund was valued at $42.1 million, Richmond's at $42.2 million and the contingency at $24.9 million.

Both the WSL and Richmond made funding requests for the full disbursement. The Games Operating Trust Society, a volunteer board that manages the fund and payouts, approved $2.78 million for Richmond and $2.77 million for WSL for the 2012 season.

As a result of the request, the WSL's fund was worth roughly $40.27 million at the end of the year, almost $2 million less than the end of 2010. Richmond's fund declined to $40.36 million, while the contingency fund paid out $1.25 million to reduce its end-of-year value to $23.9 million — $1 million less than the end of 2010.

The fund was created to subsidize the 2010 venues as they develop various revenue sources, but the amount does not generate enough interest to fund the legacies. Last week, WSL unveiled its annual financial report for 2011, revealing operating costs for its venues. The Whistler Sliding Centre recouped just $578,000 of its total operating expenses of $2.7 million. That figure includes revenues from public skeleton tours, as well as ticket sales from hosting two World Cup events.

Whistler Olympic Park, the site of the Olympic Nordic events, did slightly better with annual operating costs of $2.1 million and revenues over $1 million.

With total costs of $7.5 million and just $2.7 million from the Games Operating Trust, WSL relied on $2 million in bridge funding from the province in 2011 and 2012 to make ends meet. As of now there is no long-term funding commitment from the B.C. government to keep the venues in operation, and funding requests must be made on an annual basis.

There are signs that the revenues are trending upwards for Whistler's legacies. This year, WSL has requested just $2.7 million from the provincial government to assist with operating costs over the next three years, 2013, 2014 and 2015 — $900,000 annually, which is significantly less than the current subsidy of $2 million per year. From the WSL's perspective the request is no different than other subsidies for sports venues in the province.

According to a statement from outgoing WSL president and CEO Keith Bennett, revenue generation is still a core focus for the organization.

"The GOT funding is in place to support the venues for the benefit of sport, but it's not enough to fully support WOP (Whistler Olympic Park) and WSC (Whistler Sliding Centre), so WSL has developed revenue-generating programs and will apply for provincial funding annually to supplement the cost of operating the venues," he wrote. Bennett said funding from partners, including the province, "is particularly important at this very early stage of our evolvement."

WSL has developed alternate budgets based on funding levels and revenues and would adjust their operations to reflect their finances if forced to do so. They believe that more revenues will be generated going forward.

"Results from the WSC for 2011 included only six weeks of the public skeleton sport experience program, so revenues are still developing and have not yet reached their full potential," wrote Bennett.

"The WSC is an expensive facility to run and we will continue to balance the cost of operations to provide ice time for athletes, with pursuing revenue-generating opportunities such as the public sport experience program, corporate and filming venue rentals and non-traditional sport use such as the Longboard Festival."

If WSL can't cover costs, ownership of Whistler's venues would revert back to the province. The Richmond Oval is owned by the City of Richmond.