Item - 2022.EP25.9
- This item was considered by Board of Governors of Exhibition Place on September 14, 2022 and was adopted with amendments.
EP25.9 - 2023 Operating Budget
- Decision Type:
The Board of Governors of Exhibition Place:
1. Approved the 2023 Operating Budget attached as Appendix A to the report (August 30, 2022) from the Chief Executive Officer, Exhibition Place.
2. Directed the Chief Executive Officer to submit the 2023 Budget to the City Financial Planning Division as part of the 2023 Budget Process.
3. Referred the communication from Ric Amis (September 13, 2022) to the Chief Executive Officer, Exhibition Place for review.
On July 26, 2022, the Executive Director of City Financial Planning Division (FPD) provided supplemental instructions to assist City Divisions and Agencies in the preparation of the 2023 Operating Budget Submissions with a firm submission deadline of September 16, 2022 and additional budget guidance and directions for all City Divisions and Agencies.
Throughout the budget process, Exhibition Place staff have worked closely with industry insiders, followed industry and trade magazines as well watched closely the re-opening of the trade, consumer show, and conference centre businesses in North America and around the globe. Despite all the challenges from bouncing back after the pandemic, staff are cautiously optimistic projecting the recovery of our operation is progressing well, following same trends as other businesses in the same industry.
City Financial Planning Division (FPD) directed ABC’s to prepare a realistic 2023 Operating Budget using a budget lens, taking into consideration, where possible, no additional financial pressures to the year over year net expenditures other than Covid-19 impacts. The Covid-19 impact will be treated as a separate item and the impacts will be reviewed in the context of expected Federal and Provincial funding support received by the City.
Exhibition Place worked with the City FPD staff and have developed an operating budget that meets the City directive. As shown in Schedule A, the operating budget for 2023 is a net deficit of ($2.300) million which is a 30 percent or $1.0 million reduction/improvement in the Boards deficit year over year.
The main assumptions used in preparing the 2023 Operating Budget are:
- Booking of events will be back to normal in 2023 although less attendance than pre-pandemic levels.
- It is estimated that attendance will increase over 2022; estimated to be at 85 percent of pre-pandemic levels. As such this will lead to lower ancillary revenue such as parking, food and beverage, and show services.
- Parking revenues are also being impacted negatively from the impact during recovery period, as well as, loss of parking spaces in Lot 851 due to the construction of Phase 2 Hotel and Venue Development.
- There will be additional COVID-19 costs related to health and safety associated with delivery of service.
- There will be additional costs and procedures associated with the delivery of food and beverage due to COVID-19 protocols, and due to the anticipated reduction of attendance, revenue and the associated commission the Board receives will be lower.
- COLA increase for unionized staff will be per collective agreements at approximately 1.25 percent; and as well for non-unionized staff includes a pay increase (1.25 percent COLA and 2.65 percent blended financial reward/merit). However, staff will work closely with City and will follow City directives regarding the actual pay increases for non-union staff.
- Tenants will experience the same trends as the Board and as therefore the Board anticipates lower services revenue from tenants.
- There is still volatility associated with the economy and as such non-essential costs have been delayed/deferred, and discretionary expenditures such as travel, training, etc. has been reduced. COVID-19 costs include both ongoing day to day service costs, as well as restart/recover/rebuild costs.
As reported in Schedule A below, the 2022 year-end forecasted impact of COVID-19 on the Boards 2022 budget is a deficit of ($3.300) million is an unfavourable variance of ($0.600) million for a net forecasted deficit of ($3.900) million. The unfavourable variance is due to the loss of events from January to April 2022.
Appendix A - 2023 Operating Budget
That the Board of Governors of Exhibition Place:
1. Refer the letter from Ric Amis (September 13, 2022) to the Chief Executive Officer, Exhibition Place for review.