The operating budget for the 2010 Winter Games will likely go up in the coming months.
But the increased budget will not mean Olympic officials will be putting out their hands for cash, said the organization’s chief financial officer.
“Part of me says it will probably go up…,” said John McLaughlin the chief financial officer for the Vancouver Organizing Committee for the 2010 Games this week as part of a discussion about the release of the organization’s latest financial report.
“But I don’t know the movement will be really significant.
“Our main idea here is to make sure than we remain balanced so that if we need more and we don’t have it then we can’t spend it.
“We are fully intending to have it continue to be a balanced budget.”
VANOC is currently reviewing its operating budget — the cost of actually putting on the Games — and will produce a revised budget this fall. It will be given to VANOC’s board early in the New Year for review.
McLaughlin said the changes in the $1.63 billion budget would likely reflect some different accounting procedures.
“Some of it may change because of accounting requirements (that) might require that we record transactions in a certain way and sometimes that adds money on both sides of the ledger, both the revenue and expense side, but in a balanced way,” he said by way of explanation.
Marketing revenues are generated by
VANOC and the International Olympic Committee (IOC) from corporate
sponsorships, ticket sales, broadcasting rights, licensing and merchandise
sales. These revenues will be used to cover the operating budget.
In general, said McLaughlin, VANOC
is in good financial shape.
“ There are huge challenges ahead simply because of what we have left to do but we are feeling good about where we are right now,” he said.
The latest report shows that more than three quarters (78 per cent) of the $569 million that VANOC has spent on venues and operations has gone to B.C. firms, said Mclaughlin.
Another 16 per cent has gone to Canadian companies and six per cent has gone to international companies. The numbers don’t reveal if the money spent in Canada has gone to wholly-owned Canadian companies or international companies with a branch office in Canada.
The report also showed that VANOC has spent $480.8 million on venue construction out of a total budget of $580 million. The venue construction contingency stands at $21.6 million, down $2 million from the last report following a May decision to fund aboriginal art at the venue sites out of the contingency fund.
The venues are now 81 per cent complete and McLaughlin expects the rest of the venue construction will use the remaining budget.
The contingency fund will also be used to fund any changes that need to be made to the venues following test events over the next winter season.
“We are still feeling confident that everything is on time and on budget,” said McLaughlin.
“(We have) got some provision left so that once we (host) some sporting events and we do learn more about the venue then we have some money to make any minor fixes at that point in time.”
The next financial report will be released in October and will reflect VANOC’s move into the operational phase, with spending beginning on overlay. That includes items such as temporary seating, scaffolding, fencing and other services needed to make the venues ready to host events.
Transportation will also be a major expense as the organization begins to look at bus rental and hiring drivers, said McLaughlin.
VANOC is also already beginning to look at its plans for dissolution and how it will sell or dispose of hard assets left over from the Games.
“…We want to have that clearly laid out before the Games actually happen, if we can,” he said.
That will include reviews of multi-party and host city agreements around financial commitments for money from the Games. At this point it’s not clear if there will be extra money left over.
McLaughlin also said 137,000 Olympic mascots have been sold so far.