“The community will notice that $6
million doesn’t go a heck of a long way.” – Mayor Ken Melamed
The mayor made the above remark at a council meeting last December, after the long-anticipated “financial tools” were finally approved by the provincial government. Under the agreement, the additional hotel tax Whistler now receives was expected to add at least $6 million to the municipal budget annually for the next five years.
But even with the new cash Whistler was only going to be treading water financially, hence the mayor’s remark.
One-third of the new money, $2 million annually, was earmarked for the Affordability Reserve, a fund that will be used to help build the $130 million athletes’ village.
Another third, $10 million of the $30 million expected over five years, will go into Whistler’s 2010 Games Reserve. The Games Reserve funds Whistler’s 2010 Games office ($2.3 million from 2007 to 2010) and other Olympic projects, such as the Olympic plaza planned for Lots 1 and 9 in the village.
The remaining one-third of the new money goes to various projects, many of them Olympic-related. All of which start to make the additional hotel tax, a.k.a. the financial tools, that Whistler was promised by the province as part of the deal for co-hosting the Games look less and less like an Olympic legacy and more and more like an Olympic necessity.
Not that Whistler’s other Olympic legacies should be dismissed — the athletes’ village and athletes’ centre, expanded municipal boundaries, the Nordic centre, a land bank, the upgraded highway and the publicity that comes with hosting the Games are tangible benefits that should have positive impacts for years to come. But the additional municipal revenue that’s coming Whistler’s way through the financial tools and the additional expenses the Olympics are loading on Whistler taxpayers at this point look to be pretty much a wash.
Of course we don’t yet know how much the Olympic plaza is going to cost. There will be some funding from VANOC for the plaza, and perhaps some provincial money through the Live Sites program, to add to the municipality’s Games Reserve funds. But given the recent track record for construction projects in Whistler and the fact that a design for the plaza has yet to be finalized, one can’t help but be a little worried about the final bill.
If financial apprehension hasn’t quite developed into full-blown Olympic fiscal paranoia it was nudged in that direction by Tuesday’s announcement that the RMOW was going to postpone its municipal hall expansion and renovation until after the Games in 2010. In the nine months since council approved a $5.7 million budget for the work the cost estimate has nearly tripled — to a staggering $15.8 million. That $5.7 million budget included a 23 per cent contingency. Municipal staff suggested in November that construction costs were starting to stabilize. And the project was to be done in phases, which would have allowed costs to be tracked and cuts made if it started to go over budget.
But before work had begun the budget was hopelessly inadequate. Mercifully, the plug will be pulled on the project — a project that was one part renovations, which are overdue, and one part expansion, largely driven by the Olympics.
Hosting the Olympics is an opportunity, but preparing for the Olympics seems to attract opportunists. Somewhere there are people in the construction business — materials suppliers, perhaps — who understand the deadlines and desires born of the Olympics. An office building renovation and expansion that triples in nine months, $11.5 million for a gymnasium in the athletes’ village, the library with its evolving budget…. The decision — whether it was made by VANOC or Whistler council — to move the sledge hockey arena to Vancouver now looks enormously wise and fortuitous.
We often hear about the “Whistler factor” when it comes to construction projects and costs. Land is worth more, labour is harder to get and may have to be housed, materials have to be shipped from Vancouver, the construction season is short and the paper costs of building here are significant.
But in the public projects listed above the land was provided. The construction season in Whistler, after nearly 30 years of large-scale building, is understood and built into cost estimates.
That leaves labour, materials and the paper costs as the largest variables. The cost of labour and materials are impacted by regional, national and global factors beyond our control, but they may also be changing faster than we can comprehend.
The worrying thing is that prior to scrapping the municipal hall renovations Whistler had approved a $53 million capital program this year, the largest capital program in years. As the mayor said prior to adoption of that budget, “This is what it looks like taking advantage of the Olympic opportunity.”
One hopes it is just the Olympics that are being taken advantage of.