BC government to lend 1,400 employees to VANOC to make up staffing shortfall

[mr.x]

Up to 1,400 civil servants are expected to be seconded to make up staffing shortfall

By Miro Cernetig, Vancouver Sun columnist
August 9, 2009 10:27 PM

VANCOUVER — Vancouver’s Olympic organizers informed us a few days ago they want the private sector to hand over 1,500 highly skilled workers to help them run the 2010 Winter Games.

As you might have guessed, the chances of big business lending the Olympics so many employees, whose salaries would all be paid by their companies, wouldn’t be good in the best of times. In a recession, it’s about as likely to happen as China’s hockey team winning the gold medal in 2010.

So where does the Vancouver Olympic Organizing Committee — facing at least a $40-million budget shortfall from a sudden drought in private advertising and sponsorships — really intend to go to find that sort of people power on short notice? You guessed it, the taxpayer.

The deal hasn’t made the news yet, but a few days ago the B.C. government announced to its employees through a posting on its internal website that it is looking for 250 civil servants to start working full-time for Vanoc. Their salaries will be paid by the government for up to six months, a move that will help fill in the Olympic organizing committee’s looming budgetary gap.

But that’s just the start.

With each passing month the government is expected to hand over more employees — on what’s called secondment — until the Olympics gets the 1,500 staff it needs.

It’s unclear how many civil servants will actually be drafted into working for the Olympics full-time. Most expect businesses will perhaps offer up to 100 employees. Insiders know the bulk of those 1,500 people will have to come from the civil service.

As you might have expected, government employees think it’s quite a deal. They get to stay on the government payroll but work on the Olympics for up to six months. When the government quietly posted its call for 250 volunteers a few days ago, it got triple the number of applications.

The cost of this to the taxpayer isn’t being released. But it’s not hard to figure out.

An average civil servant makes about $50,000 a year. So, assuming 1,400 government employees sign up for Olympic duty, the secondments would cost at least $7 million a month. Assuming an average of four months on the Olympic roster and you reach a cost of about $28 million.

Count on it being more, though. The sort of highly skilled people the Olympics are calling for are at the higher pay grade and they are often unionized employees. You can bet there will be scads of overtime to go around.

I can already hear the howls of protest about this latest dip into the taxpayers’ pockets to put on the 2010 Games. While there were plans for some government secondments — mostly senior managers and personnel familiar with protocol and security — nothing like this staff grab was in the bid book.

Then again, neither was a global recession.

So it’s hard to blame Olympic organizers for suddenly finding their budget tighter than they thought. There are few organizations not facing similar pressures.

Even if you might be inclined to tell the provincial government to refuse Vanoc’s request, it wouldn't save any money. These are essential, management-level positions that need to be filled to make the Olympics a success. If Victoria rejected the idea of lending out employees, Vanoc would have to go out and contract the staff anyway.

That hiring spree would surely mean Vancouver’s Olympic organizing committee would post a massive debt when the Games are over. And guess who would end up paying that bill after the Olympic torch is taken back to Olympia?

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[WBC]

hmmmm... weren't we told that Vancouver is "different" and that taxpayers are not going to be on the hook for this mess? Yeah right...Of course we were told that by the same people who "manage" the economy and budgets on the best case scenario fantasies. Now as I said before the extent of this mess won't be known 'til about 6 months after the games are over and the Olympic village is all accounted for. I guess we can start placing the bets on how much - my over/under is a 1/2 billion loss.

[mr.x]

^ your post is more fearful than factual.

You have to realize that few saw the recession coming and VANOC, before the recession started, was in very good finances (and despite the recession, it still is compared to Athens, Salt Lake, and Torino...they were all scrambling to find hundreds of millions for their operating budgets compared to VANOC's tens of millions). Not to mention that VANOC was able to nearly double their domestic sponsorships target from the orginally estimated $450-million to the now $800-million. That's quite an achievement, doubling what Salt Lake and Torino got. Ticket sales are also quite a bit more brisk than Salt Lake and Torino.

The Olympic Village "scandal" was overblown by civic politicians for political purposes and by the media. Read the Olympic Village topic.

[WBC]

Originally Posted by mr.x

^ your post is more fearful than factual.

You have to realize that few saw the recession coming and VANOC, before the recession started, was in very good finances (and despite the recession, it still is compared to Athens, Salt Lake, and Torino...they were all scrambling to find hundreds of millions for their operating budgets compared to VANOC's tens of millions). Not to mention that VANOC was able to nearly double their domestic sponsorships target from the orginally estimated $450-million to the now $800-million. That's quite an achievement, doubling what Salt Lake and Torino got. Ticket sales are also quite a bit more brisk than Salt Lake and Torino.

The Olympic Village "scandal" was overblown by civic politicians for political purposes and by the media. Read the Olympic Village topic.

Really, more fearful then factual...hmmm...Let's go over published facts (see
http://www.nationalpost.com/news/canada/story.html?id=1802748 - I especially like the one about the "Other" revenue).

$1.3 Operating budget (2003) in billions. (bragged about 200 surplus)

$1.63 Operating budget (2007) in billions. (bragged about small surplus)

$1.76 Operating budget (2009) in billions. (In January we were told the budget will be balanced, its August they have to cut the spending and "borrow" workers from BC government and have 30 million budget hole).

$175 Estimated security budget (2003) in millions.

$900 Estimated security budget as of February 2009 in millions. (all covered by the feds).

This does not include the Olympic village which is such a good investment that all the private investors bailed and left the City of Vancouver on the hook for.

So, in summary we went from 200 million surplus (talked about) to 30 million loss (for now) with contingency spent, with feds eating 700 million in extra security cost, government of BC now effectively funding their operating budget by supplying labor and Vancouver guaranteeing the construction loans. Marvelous job! So happy that we are not Utah or Athens as those guys are really screwed.

BTW, what would have happened if they didn't almost double that sponsorship revenue? How would it work then?

Now, the real scary part is that in real world (that you will have a chance to experience once you join the workforce) companies lie. And they lie a lot. Especially the ones that are actually not responsible to anybody. And if they have to admit to us 6 months before the Olympics that they are in trouble, then they are really in some deep shit, because if it was only a few millions they would find a way to sweep it under the rug.

[mr.x]

Originally Posted by WBC

Really, more fearful then factual...hmmm...Let's go over published facts (see
http://www.nationalpost.com/news/canada/story.html?id=1802748 - I especially like the one about the "Other" revenue).

$1.3 Operating budget (2003) in billions. (bragged about 200 surplus)

$1.63 Operating budget (2007) in billions. (bragged about small surplus)

$1.76 Operating budget (2009) in billions. (In January we were told the budget will be balanced, its August they have to cut the spending and "borrow" workers from BC government and have 30 million budget hole).

Keyword: recession. Few saw it coming. How many companies worldwide even saw the recession coming ahead? How many companies had to cope with the recession by shedding jobs? It's hard to blame VANOC for not seeing the same.

The bid committee in 2003 never entertained the idea of a $200-million surplus, but did mention that a surplus was certainly a possibility. Obviously, 7 years can change drastically with the political and financial climates constantly fluctuating.

$175 Estimated security budget (2003) in millions.

$900 Estimated security budget as of February 2009 in millions. (all covered by the feds).

I don't think anyone believed that security would cost so little, even in 2003. And if we really did go through with spending only $175-million for security, then something is terribly wrong and we'd be risking the lives of many and the reputation of our city and province.

Security is something we simply cannot cheapen on. At least most of the security cost increases are being diluted by being covered by the federal government rather than the provincial government.

This does not include the Olympic village which is such a good investment that all the private investors bailed and left the City of Vancouver on the hook for.

See the Olympic Village thread. The private investors were in Wall Street, they bailed because they didn't have enough cash flow to finance the project. And when this happened, it wasn't just the Olympic Village that was in trouble but thousands and thousands of other developments around the world. Finding funding for real estate wasn't an isolated problem.

To think the City of Vancouver would be on hook for the entire $800-million Olympic Village would equate to not having a single condo unit being sold over the next 3 years. In addition, the City was able to negotiate a much fairer and lower interest rate with Canadian banks for the money borrowed to build the Village. We also got Millennium to build and finance many of the amenities at the new neighbourhood, plus the City of Vancouver sold the Olympic Village site to Millennium for far more than its worth.

Even if the City is on the hook, the money would come from the City of Vancouver's $1.4-billion property endowement fund - a fund that the city accumulated over the last 20 years from profiting from its land dealing businesses. Taxes nor city services would not be affected.

So, in summary we went from 200 million surplus (talked about) to 30 million loss (for now) with contingency spent, with feds eating 700 million in extra security cost, government of BC now effectively funding their operating budget by supplying labor and Vancouver guaranteeing the construction loans. Marvelous job! So happy that we are not Utah or Athens as those guys are really screwed.

Torino nearly went bankrupt twice from rising construction costs and not being able to attain their sponsorship targets....not even close in fact. The government bailed the organizing committee as well. And security for those Games cost well over a billion....the ~billion-dollar security cost for the Games has become the new norm since 9/11.

We all know what happened with Athens and in Salt Lake. Even without a recession, the finances of these previous Games were much rockier than what we're going through.

BTW, what would have happened if they didn't almost double that sponsorship revenue? How would it work then?

Now, the real scary part is that in real world (that you will have a chance to experience once you join the workforce) companies lie. And they lie a lot. Especially the ones that are actually not responsible to anybody. And if they have to admit to us 6 months before the Olympics that they are in trouble, then they are really in some deep shit, because if it was only a few millions they would find a way to sweep it under the rug.

More fearful than factual.

[jlousa]

Umm just to clarify, the city is not financing the Olympic village it's a consortium of Canadian banks lead by CIBC. The city is just the guarantor, and that is because they hold tittle over the land and as such Millennium was not able to finance directly via conventional means.

That all said Vanoc should've always been working with sharp pencils instead of sharpening them last minute. I do wonder though if the Province is able to function with 1400 workers on loan, perhaps we could stand to lose a few of them permanently.

[Yume-sama]

Originally Posted by jlousa

Umm just to clarify, the city is not financing the Olympic village it's a consortium of Canadian banks lead by CIBC. The city is just the guarantor, and that is because they hold tittle over the land and as such Millennium was not able to finance directly via conventional means.

That all said Vanoc should've always been working with sharp pencils instead of sharpening them last minute. I do wonder though if the Province is able to function with 1400 workers on loan, perhaps we could stand to lose a few of them permanently.

That was my thoughts, too How much dead weight are we carrying?

I mean, I knew those government jobs were cushy... but if they can lose 1400 of them and still do fine...

[wrenegade]

Seriously. Cut some of those jobs, and made the Libs could balance the budget. Gordo has certainly turned these past couple months into a mess.

[Canadian Mind]

I thin that the staffing shortfall could be handled over a month if major extranious issues are dealt with beforehand.

though I think they are people that would be coming from service BC locations and the like, which are already undermanned (least the courtney location is)