Item - 2021.EP19.2

The Board of Governors of Exhibition Place:

1.  Approved the Proposed 2022 Above the Line Capital Works State of Good Repair Budget (Sections A and B of Appendix A to the report (September 14, 2021) from the Chief Executive Officer, Exhibition Place) of $20.005 million, funded by City Debt, as part of the Ten-Year (2022-2031) proposed program submission to the City of Toronto.

2.  Directed the Chief Executive Officer, Exhibition Place to submit the State of Good Repair 2022 Budget and any changes or directions by the Board to City of Toronto Financial Planning as part of the 2022 Budget Process.

On June 30, 2021, the Executive Director of the City's Financial Planning Division provided the preliminary 2022 Budget Process, Directions, and Guidelines for all City Divisions and Agencies, which is still subject to changes.

Exhibition Place worked with the City Financial Planning staff and have developed a Capital Works Budget as part of a Ten-Year Program that meets the City directive.

The City practice has recently changed from a set budget based on debt target to a budget based on the organization capacity to spend combined with the City's ability to fund.  

Annually, staff review the 10-year capital plan; this annual review procedure allows Exhibition Place to adjust its current State of Good Repair program each subsequent year based on changing and operational needs, building assessments, legislative changes, mandates and priorities. Staff have submitted the 2022 Capital Works Budget to City Financial Planning to meet the City Manager September 1, 2021 mandate; however, due to the budget submission schedule, City Financial Planning understand that the budget is subject to Board approval and that the Board reserves the right to make changes to the Capital Works Budget content. Exhibition Place staff will notify the City of any changes or directions made by the Board.

In accordance with City guidelines based on capacity to spend, the City's ability to fund, building assessments and State of Good Repair priority, a total of $20.005 million gross is recommended for 2022 Capital budget.

This includes $14.850 million for Exhibition Place related infrastructure that is required for the Hotel X Phase 2 construction; which consists of $9.100 million for the relocation of the underground duct bank and the electrical sub-station (with 50 percent cost recoveries from the Tenant, for net City funding amount of $4.550 million); $5.000 million for contaminated soil remediation for which Exhibition Place is responsible under the Phase 1 Lease provisions and $0.750 million for the relocation of sewer pipes. Work for the underground duct back and high voltage work was previously provided for in the ten (10) year State of Good Repair budget as the infrastructure is at end of its useful life; however, with the pending development of the Phase 2 Hotel; these costs are moved up to 2022 due to timing.

Included in the $20.005 million is $0.500 million for the relocation of the Garden of Greek Gods sculptures, and $4.655 million for various upgrades within existing buildings. For 2022, the Capital Budget including $4.550 million of recoveries is net $15.455 million all funded by debt. With the additional State of Good Repair for Hotel X Phase II development and on-going COVID-19 funding constraints, Exhibition Place staff work with City Financial Planning to deferred $7.681 million of Capital Projects from our 2022 budget to later years.

The total cash flow for Above the Line Capital Program 2022 (Sections A and B in Appendix A), including the new projects is $20.005 million and with the recoveries of $4.55 million, is therefore net $15.455 million.

Even with the additional funding being recommended, the Net Accumulated Backlog at the end of 2022 for Exhibition Place stands at $52.716 million.