Item - 2023.EP6.1
- This item was considered by Board of Governors of Exhibition Place on October 27, 2023 and was adopted without amendment.
EP6.1 - 2024 Proposed Capital Works Budget as Part of Ten-Year (2024 - 2033) Program
- Decision Type:
The Board of Governors of Exhibition Place:
1. Approved the Proposed 2024 Above the Line Capital Works State-of-Good Repair Budget (Sections A and B of Appendix A) of $22.480 million with $22.030 million funded by debt and $0.450 million funded by recoveries from Canadian National Exhibition Association (CNEA), as part of the ten year (2024-2033) proposed program submission to the City of Toronto.
2. Approved the Proposed 2024 FIFA 2026 non-Exhibition Place managed project in the amount of $16.713 million funded by City of Toronto reserve funds.
3. Directed the Chief Executive Officer, Exhibition Place to submit the 2024 Budget and any changes or directions by the Board to the City Financial Planning Division as part of the 2024 Budget Process.
Toronto, being North America’s 4th largest City is home to Exhibition Place. The site currently hosts 1,260 events annually with approximately 5.5 million visitors per year for exhibitions, conventions, events, and entertainment, and we are moving towards becoming a 365-day destination for an impressive range of activities. It is important to note that Exhibition Place is pedestrian friendly, and we are visited by our neighbours to the north, from across the country and around the world.
Exhibition Place vision is to become Canada’s premier destination for conventions, exhibitions, events, and entertainment. We are a unique site in North America, and our goal is to transform Exhibition Place into an intimate space that facilitates unimpeded movement of people.
On August 28, 2023, the City’s Interim Chief Financial Officer and Treasurer provided supplementary instructions for all City Divisions and Agencies with the preparation of the 2024 Capital Works Budget as Part of Ten-Year Submission with a firm submission deadline of September 15, 2023.
Exhibition Place Managed Projects
Supporting the City objective of minimizing debt funding, Exhibition Place staff have worked towards minimizing debt funding for Exhibition Place new projects, also taking into consideration inflationary pressures, and supporting our vision. The change from 2023 to 2024 10-year Capital Plan excluding carry-forward is a year-over-year change of $10.4 million over the 10 years.
Third Party Projects
In early 2023, the City entered into agreement with Maple Leaf Sports and Entertainment (MLSE) for activities in support of Toronto’s hosting of FIFA World Cup 2026. This includes, but not limited to major upgrades to the City-owned soccer stadium at BMO Field. Given that this City project is on the Exhibition Place grounds, it was agreed by MLSE and the City that the financial process /cash flow would flow through Exhibition Place’s 10-Year Capital Plan. This will be a significant project as the annual cash flow funding requirement for the capital infrastructure needs to bring the stadium to FIFA operational standards as reported over the period 2023-2026 will be approximately $72.7 million in project cost. The City is working with Province as well as Federal government regarding their financial commitments to share costs.
Overall, our 10-year Capital Plan for Exhibition Place before 3rd Party managed projects is $179.290 million.
Throughout the budget process Exhibition Place staff worked closely with City's Financial Planning Division (FPD) in developing the budget. The City practice for 2024 allocation of funds is still based on the Board capacity to spend but is linked more closely to the City's ability to fund the projects with debt.
Annually, staff review the 10-year capital plan; this annual review procedure allows Exhibition Place to adjust its current State of Goods Repair (SOGR) program each subsequent year based on changing and operational needs, building/audit assessments, legislative changes, mandates, and priorities.
Exhibition Place staff will submit the 2024 Capital Works Budget to City FPD to meet the City Manager September 15, 2023, deadline; however, due to the budget submission schedule, City FPD understands that the budget is subject to Board approval and that the Board therefore 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 for capacity to spend, the City's ability to fund, building assessments and SOGR priority, a total of $32.567 million net program is recommended for 2024 Capital budget. This includes:
1. New Projects for a total amount of $17.180 million cash flow in 2024 (Section B in Appendix A) as follows:
a. $0.900 million for Food Building projects ($0.800 million for lighting upgrades and $0.100 million for fire alarm system upgrade); 50 percent of which are to be funded by Canadian National Exhibition Association (CNEA) as per Board's Master Agreement sharing provisions with CNEA.
b. $2.500 million cash flow in 2024 for high voltage priority feeder cable replacement. (This project has a three-year budget approval request of $7.500 with a cash flow of $2.500M for 2024, $3.000M for 2025, and $2.000M for 2026).
c. $13,780 million for various upgrades within existing buildings, parking lots and roads grounds wide, all funded by debt.
2. Previously Approved cash flow of $5.300 million in 2024 (Partial Section A in the Appendix A) as follows:
a. ($0.500) million reduction - of previously approved 2024 cash flow of $0.500 million, resulting in zero cash flow in 2024 for New Brunswick Way Improvement/Road Widening project.
b. $1.100 million previously approved 2024 cash flow for Emergency Generators Upgrades at various buildings (cash flow for 2025 is $0.550 million).
c. $1.800 million previously approved 2024 cash flow for substation consolidation and upgrades (cash flow for 2025 is $0.625 million).
d. $2.400 million Partial Cash Flow Carry Forward to 2025 for the Soil Remediation at Lot 851 due to delay in Phase 2 Hotel and Performance Venue delays.
In summary, the total budget cash flow for Above the Line Capital Program 2024 (Sections A and B in Appendix A) including New Projects, Previously Approved and Carry Forward is $22.480 million.
Even with the additional funding being recommended, the Net Accumulated SOGR Backlog at the end of 2024 for Exhibition Place stands at $70.580 million.
3. The 2024 capital cash flow for Non-Exhibition Place managed projects (Section C) include FIFA 2026 capital project of $16.713 million which includes $4.226 million 2023 carry-forward.
Capital Needs Constraints
In addition to the $249.345 million required for the 10-year above the line capital works program, there exists $112.0 million of capital projects that are below the line. The term 'below the line' refers to not approved projects that have capital needs or more specifically projects that their capital needs cannot be accommodated within the City capital plan the Board have the capacity to deliver. The projects under these constraints for Exhibition Place in the 10-year plan consist of $12 million for the Festival Plaza Development, $75 million for the Industry Building renovation, $11 million for the restoration of the Enercare Centre roof, and $14 million required for the Wastewater Renewable Energy Project initiated by the City.
Appendix A - Proposed 2024 - 2033 Capital Works Program