Item - 2009.EX29.10

In December 2008 Council endorsed Toronto’s participation in the Bid to host the 2015 Pan Am Games in the City and surrounding Greater Golden Horseshoe region and agreed that Toronto would be named as the Bid City.  Since then, the Province’s Pan Am Games Bid Corporation (BIDCO) has been continuing discussions with municipal officials and other public and private sector entities concerning venues for the range of events associated with the Pan Am Games.  This report updates Council on the venues in Toronto that are under consideration.  The report identifies the venues that are owned by the City of Toronto and describes the financial implications for the City of any upgrades to facilities that will be needed to bring them up to standards required for the Pan Am Games.  The report seeks Council’s support for these investments.

The report also recommends Council’s support for the development of a new competitive aquatics centre and sports complex at the University of Toronto’s Scarborough Campus.  This development will provide a post Pan Am Games infrastructure legacy to Torontonians, the University’s students and Ontario’s competitive athletics community; is consistent with the City’s long-term pools strategy and objectives for investments that will benefit youth in priority neighbourhoods; will contribute to city building by helping  to connect the Scarborough campus to the rest of the City; and will reinforce the campus as a destination point for Transit City’s Scarborough Malvern LRT line.  The report proposes a set of principles to frame the City’s contribution to the capital cost of the aquatics and sports complex and the post Games ownership and operation of the facility.

This report seeks authority from Council to enter into a Multi-Party Agreement that identifies the 2015 Pan Am Games venue strategy and all commitments, obligations and benefits for contributors to the Toronto regional Pan Am Games (whether through funding or in-kind support).  It also seeks authority to enter into a Host City Agreement that provides the formal commitment to accept the award of the Games, and host and deliver them in line with PASO statutes and regulations.

The Federal and Provincial governments have each agreed to fund 35% of the overall net budget for the Games and they have proposed that the municipal and other partners fund the remaining 30%. However, rather than applying the funding from other partners towards 30% of both operating and capital costs, the Federal and Provincial governments have proposed that the other partners direct their contributions entirely towards the cost of capital facilities. Therefore, none of the other partners, including the City of Toronto, will be required to make any financial contribution to the operating costs of the Pan Am Games.  Provincial officials have confirmed that these costs will all be borne by the Federal and Provincial governments and other revenues from the operations of the Games.  This approach will allow the other partners to apply their contributions towards improvements and additions to their own facilities and it will allow these partners to potentially debt-finance these contributions. 

The net capital budget impact will be smaller than the total contribution amount as the revitalization of the Nathan Phillips Square and the resurfacing of 1.8km of the proposed cycling route are already included in the 2009-2018 Capital Plan and Forecast. The net capital budget impact will therefore be 45.9 million ($2008) as shown in Table 2.

This report recommends that the Deputy City Manager and Chief Financial Officer report on the details of the 49.5 million ($2008) in expenditures, including timing and funding source, as part of the 2010 Capital Budget process.

In order to protect the other funding partners from new post games operating cost burdens associated with the new facilities, the Province has committed to provide a legacy fund within the Games budget that will offset any operating shortfalls likely to arise.  It is, therefore, not anticipated that the proposed works will have material operating budget impacts on the City.

The Acting Deputy City Manager and Chief Financial Officer has reviewed this report and agrees with the financial impact information.

The Province has determined that the other partners must make a 44% contribution towards the capital costs in order for their contribution to be equivalent to 30% of the overall net budget for the Games. The contribution from other partners will be capped, however, at 44% of the forecast capital costs as the Province has agreed to fund any cost over-runs.

Within Toronto, the capital plan for the Games (see Table 1 below) proposes one new facility and several upgrades to existing facilities. The largest proposed expenditure is 170.5 million ($2008) for a new aquatics/athletics facility on the Scarborough College campus of the University of Toronto. To date, discussions with the University of Toronto have been premised on the City and the University each contributing 22% of the capital cost for this facility. The Federal and Provincial governments would fund the remaining 56% of the capital cost.

The City would have to fund 44% of the cost of the other proposed works which involve upgrades to existing City facilities and infrastructure. Altogether, the City’s total contribution towards Pan-Am related capital expenditures, both for the new facility at Scarborough College and for the upgrade projects, will be 49.5 million ($2008).

It should be noted that this total contribution amount is based on the estimated cost to construct the proposed works in 2008. An adjustment will have to be made to the nominal contribution amount to reflect overall construction cost inflation that occurs between 2008 and the actual construction period for each proposed project.