Vancouver's Olympic Village costs escalate
Vancouver’s city manager has revealed that staff spent public money on the Olympic Village without council’s authorization. Speaking to the city services and budgets committee on June 18, Penny Ballem informed Mayor Gregor Robertson and the rest of council that the city didn’t “run out of money” and that staff continued to be paid.
“But at the end of the day, we are operating beyond our technical authority from council,” Ballem said. “So we are trying to rectify that.”
She made the revelation prior to a council vote to approve $15.07 million to cover higher development costs for the city-owned affordable-housing component on the site. The city plans to build 252 units, which were budgeted at $65 million in 2006 and then $95 million in December 2007. Last February, staff revealed that the cost has risen to $110 million.
Council also approved $5.52 million for escalating costs and an additional contingency fund for a civic centre on the site. Another $1.3 million was approved for the city’s project office at Southeast False Creek, which administers the ground lease and development agreement with Millennium Southeast False Creek Properties Ltd.
“We are beyond our allocated expenditure,” Ballem said.
After staff provided a financial update and three citizens spoke about the issue, Robertson took the opportunity to criticize his predecessors at city hall. “I’ll just say it’s brutal inheriting a project that lacked tough cost controls and due diligence,” he said. “I think staff have done a remarkable job over these last few months in particular, as we’ve seen no cost increases since staff adopted a more rigorous approach and cost controls.”
Robertson piled on more criticism: “There is no excuse for not having a rigorous approach, accountability, and ensuring that capital projects have all those controls in place and are tracked very closely.”
In case anyone missed the message, the mayor repeated it: “It’s a bit of a tough pill to swallow when the costs have escalated and the controls were not previously in place.”
After Robertson finished his diatribe, Non-Partisan Association councillor Suzanne Anton jumped into the fray. “That was a very nice finger-pointing exercise, without any possibility for reply from any of the people involved,” she said, adding that there was only a one- to two-percent cost overrun last year.
Anton said that five members of council—Raymond Louie, Heather Deal, George Chow, Tim Stevenson, and David Cadman—were in office when previous decisions were made. “When you point your fingers, you’re pointing to everybody,” Anton said. “I’ll just remind you of that.”
Then Anton declared that social-housing units each costing the city $600,000 “will break the bank”. A council report suggested that affordable-housing units in the Olympic Village will cost nearly $440,000 each, not including land.
Louie retorted that he was not part of the previous mayor’s team. “Many suggestions that I put forward and my colleagues put forward frankly fell on deaf ears,” he said. He claimed that the Vision-controlled council has introduced changes that put the city on a firmer financial footing, reducing taxpayers’ risk by $100 million.
Throughout the discussion, neither staff nor council shed any light on the impact of cost escalations on the 252 units of affordable housing. In February, staff declared that it would return to council in April with a report outlining options that will go out for public discussion. On June 18, Ballem told council that this report will come forward in the fall.
One speaker, Tristan Markle, told council that he is “just a regular renter down the street” from the Olympic Village. “A lot of people in my situation are likely to get evicted for the Olympics because there are certain loopholes in residential tenancy,” he claimed.
Markle pointed out that the city approved the 2010 Winter Games Inner-City Inclusive Commitment Statement. It pledged to protect rental housing stock and ensure that people are not made homeless, involuntarily displaced, or evicted because of the 2010 Games. He remarked that a “component of ethics is keeping your commitments”.
“If I were a councillor, first of all, I would insist on reassuring the public about affordable housing,” Markle said.
On June 18, councillors didn’t give Markle this reassurance. They were too busy bickering about the past.