Auditor sounds alarm about Olympic costs, stumbles

VICTORIA - It's time to get worried about the 2010 Olympics.
Not just about what the Games are going to cost you, although that's a big concern in the light of three sharply critical reports released this week.
But also about whether the government is fumbling the chance to ensure that B.C. gets some lasting benefits from the two-week event.
Acting auditor general Arn van Iersel released the office's second review of the province's Olympic activities this week. It was alarming reading.
A lot of the talk was around what the Olympics are really costing British Columbians. Premier Gordon Campbell insists the tab is just $600 million - the direct cost of narrowly defined Games spending.
But the auditor general, like almost everyone else, has again dismissed that claim. he Sea-to-Sky Highway improvements were part of the bid and should be included, he found. And it's foolish to claim that the government's Olympic Secretariat isn't part of the Games cost.
All in, the auditor general says, and provincial taxpayers are on the hook for at least $1.5 billion.
Municipalities are putting up another $400 million and the federal government $607 million.
The total tab from taxpayers will be at least $2.5 billion.
The government can stick to its story; the public will decide whether they believe the politicians or the auditor general.
But by not including all the costs, van Iersel says, the government is making it difficult to properly manage the programs. The budget for the Olympic Secretariat, for example, has increased from $24 million to $41million.
"For the province to manage its costs for the Games, the costs must first be defined and measured," he says. "The province, however, has not yet developed a comprehensive definition of Olympic costs."
The report raises bigger questions about what lies ahead.
The province has only $76 million left in its contingency fund for Games overruns, having already handed the Vancouver Olympic Organizing Committee $55 million to cover rising venue costs.
That's not likely going to be enough, says van Iersel.
For starters, there could be more cost overruns on Games construction. (A federal report released at the same time offers the same warning.)
And three years after B.C. was awarded the Games, organizers still don't have a handle on the costs of security or medical care. Ottawa and the province have agreed to split security costs, but they are still using the bid book estimate of $175 million in 2002 dollars. Inflation, increased security threats and other issues could easily double or triple that cost.
The problems aren't just on the cost side. If the Games are going to be more than an expensive party, the auditor general warned in 2003, the province needed a well-funded, well-planned marketing plan to seize the benefits. A government report in 2002 urged an immediate start on marketing efforts to ensure potential indirect economic benefits of $4 billion.
It hasn't happened. "The marketing effort to date has been delayed and unco-ordinated, with no central agency taking the lead," the new report found.
And the province apparently didn't realize that the International Olympic Committee restricts international marketing until the previous Games have concluded. B.C.'s hands are largely tied until after the Beijing Games, leaving just 18 months to woo the world.
That should be a special concern for communities outside the Vancouver-Whistler corridor. People who live in the rest of the B.C. are paying for the Games, but are at risk of seeing few benefits.
Finally, the report raises concerns about the secrecy around Games spending and plans.
"We are also concerned that the province has not done more to make the Games budget a public document," the auditor general's office says. The province has agreed to cover all cost overruns, he report notes, and the public is entitled to better information.
The alarm bells are sounding. It's far from clear that Campbell and company are listening.
Footnote: The province's marketing plan is also being hobbled by VANOC, the auditor general reports. Even though the province is by far the largest contributor, the Games organizers want to keep the best marketing tools for corporate donors. It won't even let the government use the Olympic rings or the word Olympic in ads.