2008 toronto olympic and paralympic · 2002-06-05 · toronto city council economic development and...

CITY CLERK

Clause embodied in Report No. 4 of the Economic Development and Parks Committee, asadopted by the Council of the City of Toronto at its meeting held on May 21, 22 and 23,2002.

1

2008 Toronto Olympic and ParalympicGames Bid (All Wards)

(City Council on May 21, 22 and 23, 2002, adopted this Clause, without amendment.)

(City Council on April 16, 17 and 18, 2002, deferred consideration of this Clause to the nextregular meeting of City Council scheduled to be held on May 21, 2002.)

_________

(City Council on February 13, 14 and 15, 2002, deferred consideration of this Clause to the nextregular meeting of City Council scheduled to be held on April 16, 2002, in order to provide anopportunity for the City Auditor to submit additional reports in this regard.)

_________

(Clause No. 1 of Report No. 1 of The Economic Development and Parks Committee)

The Economic Development and Parks Committee recommends the adoption of the report(January 16, 2002) from the Commissioner of Economic Development, Culture andTourism.

The Economic Development and Parks Committee reports, for the information of Council,having requested:

(1) the City Auditor to report to City Council at its meeting of February 13, 2002, on thepublic audit report and statement pertaining to Toronto’s 2008 Toronto Olympic andParalympic Games Bid; and

(2) the Commissioner of Economic Development, Culture and Tourism to report to theEconomic Development and Parks Committee on the opportunity for the City of Torontoto work collaboratively with the Toronto Sport Council.

The Economic Development and Parks Committee submits the report (January 16, 2002) fromthe Commissioner of Economic Development, Culture and Tourism:

Purpose:

This report is for the purpose of updating Council on the application to host the 2008 TorontoOlympic and Paralympic Games Bid and to respond to various motions of Council.

Toronto City Council Economic Development and Parks CommitteeMay 21, 22 and 23, 2002 Report No. 4, Clause No. 1

2

Financial Implications and Impact Statement:

There are no financial implications resulting from the adoption of this report.

Recommendations:

It is recommended that:

(1) Council endorse, in principle, the development of a Toronto Sport Council; and(2) Council endorse, in principle, the development of a World Youth Centre.

Background:

This report responds to the following directives of Council: October 2, 3, 4, 2001 - referred toAudit Committee requesting a Public Audit of Toronto’s 2008 Olympic Bid; July 24, 25,26, 2001 referred the Notice of Motion (J6) regarding Support for Canada’s Olympians to theEconomic Development and Parks Committee and the Committee requested at its meeting ofSeptember 14, 2001 - that the Commissioner of Economic Development, Culture and Tourismreport to the January 21, 2002 meeting; July 24, 25, 26, 2002 - referred the Notice ofMotion (J32) 2008 Olympic Bid Proposed Centres and Villages to the Policy and FinanceCommittee for consideration at the meeting of September 20, 2001 and requested a reportthereon to the Policy and Finance Committee. The Commissioner was also directed to havespecific regard for the 2008 Olympic Bid Neighbourhood Working Group Issues Matrix as theyproceed with the development of the Olympic legacy proposals.

Comments:

This report summarizes Toronto’s application to host the 2008 Olympic and Paralympic Games.It is a consolidation of a number of requests on motions from Council directed to the Audit,Policy and Finance and Economic Development and Parks Committees. This report provides anoverview and update on the development of the Bid from conception to the final InternationalOlympic Committee vote on July 13, 2001. As well it includes reference to Toronto’s2008 Olympic Bid Committee’s (TO-Bid) audited financial statement. The full auditedstatement is included as Attachment No. 1. This report also outlines the City of Torontospending on Olympic-related business and consolidates a number of requests of Councilconcerning legacy of the 2008 Toronto Olympic Bid.

A. Overall Summary

(i) Toronto 2008 Olympic Bid Overview

Development of the 2008 Toronto Olympic and Paralympic Bid began in late1995 with a core group of individuals lead by The Honourable David Crombie,former Mayor of Toronto. TO-Bid, as the group later became known, recruitedsupport from interested parties to explore the possibility of hosting the Olympics.In May 1996, Mr. Crombie filed a “Letter of Intent” with the Canadian OlympicAssociation (COA) expressing interest in having Toronto host the 2008 OlympicGames. The COA through its Site Review Committee (SRC) reviewed theproposal in November 1997 and reported favourably.


3

In March of 1998 by a vote of 54 to 1, Toronto City Council gave its approval inprinciple to TO-Bid’s plan to bid for the 2008 Olympic Games. In the followingmonth, the COA’s Board of Directors, at its Congress in Calgary, Alberta,endorsed the Toronto concept.

In November of 1999, TO-Bid unveiled its Master Plan to host the2008 Olympics.

In February 2000, Council voted 54 to 2 in favour of the Master Plan, andauthorized the Mayor to sign the Host City Agreement with the InternationalOlympic Committee, should Toronto be chosen to host the 2008 Olympic Games.That same month, the COA and the City of Toronto sent letters to the IOC puttingforward Toronto as the Canadian candidate to host the 2008 Olympic Games.

In June 2000, TO-Bid along with nine other competing applicant cities submittedits response to the IOC’s Applicant City Questionnaire on basic technicalrequirements. In August 2000, Toronto and five others were officially acceptedas Candidate Cities by the IOC Executive Board. The official Candidature File or“Bid Book” was submitted to the IOC in January 2001 in Lausanne, Switzerland.

The IOC Evaluation Commission visited all the applicant cities in Februaryand March 2001. Toronto’s evaluation visit took place in March 2001, and inApril 2001. The IOC Evaluation Commission reported on the technical merits ofeach of the five candidate cities. Toronto was given top marks for itsinfrastructure and technical abilities. An outline of the Commission’s findings isshown below.

On July 13, 2001, the IOC announced the winning Candidate City. In what wasvoted in a world-wide poll conducted by the Associated Press as the topinternational sports story of the year, Toronto placed second to the winning city,Beijing, ahead of Paris, Osaka and Istanbul.

(ii) IOC Evaluation

A 14-member IOC Evaluation Commission visited all the applicant cities inFebruary and March 2001. This was part of a new, two-phase candidatureprocedure adopted by the IOC following the recommendations made by the IOC2000 Evaluation Commission. In this new procedure, the Commission visitedonly those cities which had passed the initial selection phase during which basictechnical requirements were examined by a team of experts. The Commission’stask was technical in nature: verify the information in each of the City’sCandidature Files; determine whether the plans were feasible; and make anoverall risk assessment. Toronto fared very well among its competitors in its IOCassessment, in particular with respect to its infrastructure and technicalcapabilities.


4

The following was noted by the IOC:

- Toronto has the ability to host the Games- Athlete and sport bodies well received- Strong technical Bid- Olympic Village: a compact location for venues involving 85 percent of

athletes- Impressive involvement of athletes in all aspects of Bid and strong sport

experience- Bid driven by National Olympic Committees (NOCs)- Strong government support at all levels- Sports concept based on unique site adjacent to City Centre- Toronto’s waterfront provides opportunity to create excellent Olympic

Village- Legacy to sport and good transportation links make Bid attractive- Recognition of inclusion of multi-cultural and indigenous aspects of

populace- Comprehensive and well designed environmental program- Sound marketing program

Some areas of concern were also identified by the IOC:

- Lengthy travel times for some outlying venues- Financial plan achievable but failed to discount TV rights and TOP

sponsorship revenues to year 2008 levels. TO-Bid projections wereamended accordingly

- Heavy reliance on private sector participation- Plans for a separate Paralympics OCOG (Organizing Committee of the

Olympic Games) of concern as is the complex marketing arrangements forParalympic OCOG

Overall, the Evaluation Commission found the Toronto Bid a very compellingconcept largely based on the compact configuration of venues and their proximityto the proposed Olympic Village on the Toronto Waterfront. The considerablelegacy element in the sports concept was also regarded as a strong attribute of theBid. The Commission expressed its confidence that Toronto could stage anexcellent Games.

(iii) Status of Toronto Olympic Bid Corporation

Founded in 1998, the Board of Directors and comprised a membership in excessof 100 that was widely representative of our local and national corporate,political, and cultural communities. Appointments to the Board were made by theCity (two-thirds) and the COA (one-third).


5

The primary function of the Board of Directors related to responsibility forestablishing corporate policy and priorities to provide the foundation of asuccessful bid while adhering to the core principles of the Corporation’s mandate.That mandate, as endorsed by Council, was to represent the City in the Bidcompetition in a prudent, accountable manner and to define the program of anOlympic Games that was to be socially responsible, environmentally progressiveand financially sound. The Board was supported in its mission by a 12-memberExecutive Committee.

The final Board of Directors meeting was held on July 24, 2001. The Boardcontinues to exist although, in a much reduced capacity. It is expected that theBoard will conclude its mandate early in 2002, but the Corporation will maintainits corporate status in the event any matters must be addressed.

The firm of Pricewaterhouse Coopers LLP was retained to conduct a full audit ofthe Bid’s financial statement (Attachment No. 1).

(iv) 2012 Olympic Games Bid

The IOC will seek candidate cities for the 2012 Games with a process that willcommence in 2003 and be decided on in 2005. The Toronto Bids for 1996 and2008 Games were both well received by the IOC and provide a solid foundationshould Council and its senior government and private sector partners wish topursue candidacy for 2012. It is expected that the competition for the right to hostthe 2012 Games will attract some of the world’s leading cities.

B. Other Bid-Related Updates

(i) Reports to Council

As mandated by Council in 1998, periodic reports were presented to City Councilupdating the status of the Bid. These reports were compiled by the City OlympicOffice in consultation with appropriate City staff and members of the City’sOlympic Steering Committee:

Date of Report Purpose of ReportFebruary 1998 Seek Council’s endorsement in principle, of the application to be

submitted by TO-Bid (then known as BIDCO) to COA to havethe City of Toronto chosen as the Canadian Candidate

June 1998 Seek Council ratification of the 2008 Toronto Olympic BidAgreement reached between the City of Toronto, the CAO andTO-Bid

Advise Council on the structure of the new bid group to berenamed TO-Bid

Outline the staff work program and public consultation process


6

Date of Report Purpose of ReportJuly 1998 Outline public consultation process related to Toronto’s bid to

host the 2008 Olympics and specifically set out the details ofPhase I of the process

Report on motions arising from June 30, 1998 Strategic Policiesand Priorities Committee

Seek City endorsement of membership to TO-Bid Board ofDirectors

September 1998 Respond to various Council motions of March and July 1998October 1998 Seek endorsement of members to the TO-Bid Board of DirectorsNovember 1998 Respond to various Council motions and motions arising at

special Olympic meetings of Community Councils

Update Council on the process to assess the Master Plan unveiledby TO-Bid

February 2000 Seek Council’s approval of the application to be submitted byTO-Bid and the COA to have the City of Toronto selected by theIOC as the host city for the 2008 Olympic and Paralympic Gamesand associated cultural festival

January 2001 Provide Council with status report pertaining to the City’s bid tohost Olympic and Paralympic Games

(ii) Agreements

As the owners of all rights, title and interest in the Olympic Games, the IOC hasdeveloped a detailed Host City Contract, which cities that are awarded the Gamesmust execute.

Among other things, the Host City Contract requires the City and the NationalOlympic Committee (NOC), in our case, the COA, to be jointly and severallycharged with the organization on the Olympic Games, and to assume all financialand other risk and liability in connection with their staging.

The Host City Contract was developed specifically for the Games of theXXIX Olympiad in the year 2008. While the Federal and ProvincialGovernments are not parties in the Host City Contract, the City and the COArequire the co-operation and assistance of the senior governments in order to fulfiltheir obligations under the Contract. Accordingly, in preparation for a successfulToronto Bid and to ensure commitment of time and resources by all parties aswell as an understanding of their respective roles to make the Games a success,the City negotiated the following agreements:

Bid City Contract, April 17, 1998

- Negotiated between the City of Toronto, the COA and TO-Bid to definetheir respective relationship, roles and responsibilities in bidding for the


7

XXIX Olympic Games in Toronto as well as setting out the transitionalobligations that will follow should the Bid be successful. The form andcontent of this agreement were ratified by Council in June 1998.

Provincial Guarantee and Support Agreement, January 16, 2001

- Negotiated by the City of Toronto and the Province of Ontario, theagreement guarantees that OCOG (a non-share capital, not-for-profitcorporation) will have the financial resources it needs to meet its Olympiccommitments. Furthermore the guarantee commits the Province toindemnify the City and the COA for Toronto Olympic Games-relatedliabilities.

Federal Services Covenant, February 25, 2001

- The Federal Services Covenant guarantees that the Government of Canadawill provide the essential services under its jurisdiction, such as customs,immigration and security should Toronto’s Bid to host the Games besuccessful.

Joint Marketing Agreement, March 9, 2001

- Negotiated by the City of Toronto and the COA, it is designed to create asimplified marketing structure for Olympic marketing within the hostcountry in an effort to protect the COA marketing activities that may beviewed as undermined by separate Olympic Games Marketing. In thatcontext, it will not conduct any marketing or other commercial or implyactivities that could create an Olympic association. The City has noliability under this agreement.

Draft Members’ Agreement, July 2001

- Negotiated between the COA, the City of Toronto and the TorontoOrganizing Committee of the Olympic Games. Representatives of boththe Federal and Provincial Governments also participated in finalization ofthis draft Agreement. Had the Games been won, City Council would havebeen asked to ratify this Agreement. In essence, this draft Agreementdefines the policies and procedures respecting the conduct of the Games,allocation of the surplus, and the creation of a financial Legacy to ensurethe continued maintenance and operation of Olympic facilities after theGames.

(iii) Review of 2008 Olympic Legacy Facilities

Early in 2001, the consulting firm of Arthur Andersen reviewed the2008 Olympic Legacy Facilities. The Report’s Table of Contents as well as theConclusion and Recommendations are included (Attachment No. 2).


8

The Andersen study was commissioned to provide the City with an independentassessment of the Olympic legacy facilities (namely two aquatic centres, thevelodrome, the Olympic Stadium and the rowing basin) and how they could bestbe governed and used to achieve the City’s and broader region’s recreation andsports requirements.

A five phased process was designed to:

- Take inventory of the City’s and broader region’s Recreational and SportFacilities;

- Review other Olympic Legacy facilities;- Determine the roles and uses of Toronto Legacy Facilities;- Create operating models; and- Determine operating obligations.

In attempting to develop an operating model to govern how the five LegacyFacilities could be managed following the completion of the 2008 TorontoOlympic Games, consideration was given to a number of overriding principles:the need to preserve the long-term use of these facilities from an Olympicperspective and including the need to maximize the use of these facilities for thefuture enjoyment of the residents of Toronto. In order to ensure and maximize thesuccess of the Legacies, the Arthur Andersen study concluded that access tocapital, whether or not in the form of an Endowment Fund, to support theoperating obligations of these facilities was essential. In addition, the studysuggests it is necessary to establish partnerships or formal affiliations with variousapplicable sports governing bodies; elite athlete groups; all three levels ofgovernment and corporate Canada.

In conclusion, the study proposes the establishment of a new entity to manage thefinancial legacy of the 2008 Olympic Games, to facilitate the proper andappropriate community and athlete access and programming and to ensure thateach of the Legacy Facilities are appropriately operated and maintained. Thisconcept was based on Arthur Andersen’s cumulative analysis and presents theiropinions, conclusions and recommendations for future use of the said facilities.This report identifies an operating model which can guide discussions of agoverning structure should the need arise in the future.

(iv) Olympic Social Impact Study Review

The Toronto Olympic Bid recognized that a successful Olympic Bid and OlympicGames required a comprehensive and workable social equity strategy. Noprevious Games had developed a coherent plan for setting social equity goals andmonitoring to ensure that they were met.

On behalf of TO-Bid, the Community Social Planning Council of MetropolitanToronto undertook the development of a social-economic impact and equity plan.The process consisted of two phases: Phase 1 (completed March 2000) includedresearch on the social impacts of previous Olympic Games and the results of both


9

polling and consultation groups on the anticipated social impacts of the Games;Phase 2 (first half of 2001) further refined the material presented in the Phase 1report. Working groups (housing and tenant protection, community and healthservices, employment, training and job creation, civil and human rights, access tocommercial opportunities), consisting of community experts and City staff, heldfurther, more focussed community consultations and developed the impacts,strategies, resource plan and recommendations in each area for the final reportentitled, “A Social Equity Plan Work Plan for the 2008 Olympic Games”.

The planning to ensure social-economic equity as an integral part of the proposedToronto Olympic Games established a new standard by which future Bids and theOlympics can be measured.

(v) The Toronto “Celebration”

In preparation for the IOC’s official Host City announcement from Moscow onJuly 13, 2001, Toronto Special Events Division in partnership with TO-Bidplanned and executed to world-wide audience with an Announcement party onFront Street. The event, called “Celebrate ‘08”, was organized to link Torontoresidents to Moscow for the Host City announcement; to recognize Toronto’sexceptional Bid effort and celebrate our City; and to successfully accommodatethe world-wide media coverage. All costs related to this event were theresponsibility of TO-Bid. The City provided staff resources in a number ofcapacities related to event planning.

The setting for this event was on Front Street in front of historic Union Station –the gateway to the waterfront and the City’s financial district with the impressivebackdrop of the CN Tower.

The program was multi-layered, featuring a fun pancake breakfast accompaniedby Street level animation, main stage performances and a fully programmed giantvideo screen integrating live performance, pre-taped video segments and live“announcement” coverage from Moscow.

Event attendance exceeded expectations with an estimated crowd of more than15,000. Audience response to the event was extremely positive.

As well, more than 40 electronic media (television and radio) were servicedon-site. There were no public safety or security incidents.

C. Olympic-Related Expenditures to the City

Early in the process, Council directed staff to undertake bid-related work. InMarch 1998, staff was authorized:

“…to negotiate an agreement between the City of Toronto, the COA, and BIDCOto define the relationship, roles and responsibilities of each in Bidding for the2008 Olympic Games in Toronto; and …to participate in negotiations, communityconsultations and planning refinements to develop the Bid.”


10

City Olympic activities commenced in August 1998 and continued through to 2001.Expenditures incurred by the City relate primarily to public consultations and businesstravel for official delegations as directed by Council. Reimbursements for travelexpenses for the Mayor and the Commissioner of Economic Development, Culture andTourism were recovered from TO-Bid.

City staff who worked on the Olympic Bid were either reassigned on a temporary basis ortook on additional responsibilities as required. As a result, no additional costs for staffsalaries were incurred by the City.

The total gross expenditures incurred by the City, for the period August 1, 1998 toDecember 31, 2001, are $195,356.06. The revenue for the same period throughrecoveries from TO-Bid is $49,318.63. The total net expenditures for the City are$146,037.43 for the period, which translates into a yearly average of $42,742.68.

A breakdown of the City’s Olympic-related expenses appear in the following chart.Detailed justification of these expenditures and revenues has been provided to the CityAuditor for review.

City of Toronto 2008 Olympic BidStatement of Operations

for the period August 1, 1998 to December 31, 2001

Expenditure/Revenue 1998 1999 2000 2001 Total

Expenditures:

Office Supplies and Equipment 3,775.09 3,247.40 3,799.41 1,973.07 12,794.97

Business Meeting Expenses 6,961.25 2,621.75 5,493.27 5,590.48 20,666.75

Advertising and Promotion 12,046.13 0.00 5,441.92 1,393.75 18,881.80

Professional and Technical Services 0.00 0.00 10,619.30 15,771.76 26,391.06

Postage and Courier Services 2,036.24 189.76 314.67 766.96 3,307.63

Reproduction - Internal andExternal

6,518.48 10,924.64 5,474.28 1,537.21 24,454.61

Business Travel 0.00 0.00 33,032.18 55,827.06 88,859.24

Total Expenditures 31,337.19 16,983.55 64,175.03 82,860.29 195,356.06

Revenues:

Recovery from TO-Bid 0.00 0.00 18,394.32 30,924.31 49,318.63

Total Revenues 0.00 0.00 18,394.32 30,924.31 49,318.63

Net Expenditures: 31,337.19 16,983.55 45,780.71 51,935.98 146,037.43


11

The City’s overall Olympic expenditures were less than one half of 1 percent of the totalcosts of the Bid. This expenditure coupled with the fact that, as reported earlier in thisreport that the Olympic Bid was one of the world’s most publicized news stories of theyear 2001, it can be concluded that the City leveraged a considerable and highly valuedprofile on the world stage at virtually no direct cost.

Further to the motion regarding expenditures by Agencies, Boards and Commissions,Olympic-related cost estimates were reported from the following agencies:

- Toronto Transit Commission - $10,000.00 in travel costs for staff who visitedformer Olympic sites;

- Exhibition Place - $10,322.24 relating to use of facilities and grounds preparationfor IOC visit; and

- TEDCO - $44,892.00 representing specific soil testing for Olympic installations,and architectural consultation.

D. Legacies of the Bid

At the request of Council, staff was asked to report on the formation of a Legacy Team torealize the key components of the Toronto Olympic Bid and on the creation of a “TorontoOlympic Athlete Assistance Program”.

These issues are seeking to maintain and build on the momentum established throughToronto’s Olympic Bid effort for the benefit of youth, sport, culture and community.

It is worth noting that during the life of the 2008 Toronto Olympic Bid five key principleswere consistently applied to guide the development of the Bid.

Developed in co-operation with hundreds of community groups of varying disciplines,these principles included:

- socially responsible;- environmentally progressive;- fiscally responsible;- celebrate diversity;- youth, Sport, Culture and Community Legacy.

The last principle was intended to create immediate and tangible opportunities to leavesubstantial legacies for youth, sport and culture. Among the obvious, the Bid wasintended to revitalize sport, recreation and physical activity through a strong commitmentto “Sport for All”. As well, the 2008 Bid allowed Toronto to showcase its unequalledstrength in cultural diversity to the world.


12

For the City of Toronto, the development of an Olympic Bid has provided a singularopportunity to move forward in an integrated manner on some key components ofCouncil’s Strategic Plan. This includes promoting the City’s diversity and enhancing theCity’s international image, both of which are central to Council’s goals around socialwell being and economic competitiveness. Reinvesting in social and recreationalinfrastructure and establishing partnerships and initiatives are also essential to thecontinued investment in Toronto’s high quality of life.

In fact, it has been argued that the legacy component is one of the most important aspectsof becoming a bid city. It is argued that in today’s global economy, even a loss by abidding city creates a real potential for that city to highlight sport as a catalyst for urbaneconomic growth. In essence, bidding in and of itself can:

- forge new channels of co-operation between local and regional organizations;

- establish momentum for a city, region or country to work toward a common goal toestablish new relationships that will enhance future projects both related andunrelated to the Games;

- create opportunities for a city to market itself as potential hosts for other amateur andsignature events;

- stimulate public and private interest and investment; and

- create a legacy for youth and sport.

The question of legacy has been raised and a number of initiatives have already beenbrought to the forefront: the creation of a Toronto Sport Council; a World Youth Centreand the plans for the revitalization of the waterfront which as the centrepiece of theToronto Bid, continues to be advanced with due diligence.

Both the creation of a Toronto Sport Council and a World Youth Centre have thepotential to realize some of the legacies echoed during the life of the Bid, especially interms of sport, athlete and youth development. The development of Toronto SportCouncil which is described in the section below can in effect, become the impetus tosupporting our athletes, developing community sport initiatives, and broadening theappeal for sport and recreation at a grass-roots level.

The development of a World Youth Centre, can also launch the City into legacy building,with a particular emphasis on youth. Details of a World Youth Centre have not beenfully developed, however, it has the potential to serve as a catalyst to broaden thediscourse on how to bring forward and realize some of the key legacies objectives of theToronto Olympic Bid.

(i) Toronto Sport Council

It is in this spirit of building on a vision that key members of Toronto’s OlympicBid Team are initiating a new concept for partnership in Toronto’s sport andrecreation community. In November 2001 members of the Ontario Sport Allianceengaged members of the sport community in a discussion to build support for the


13

development of a Toronto Sport Council. Included in this forum were membersof TO-Bid together with the Honourable David Crombie who served as Chair ofTO-Bid’s Board, and City staff.

It was proposed that the goal of a Toronto Sport Council is to provide a“focal-point” for the various initiatives already underway as a result of Toronto’sOlympic Bid effort and endeavour to connect Toronto’s Sport Community intothis effort. This vision of a Toronto Sport Council is consistent with the Bid’sprinciple of establishing a legacy that will have a direct impact.

What are Sport Councils? They are groups of sport and recreation leaders, andothers interested in the development of sport and recreation, who meet to workand build sport in a community or region. Community Sport Councils serve as aforum for information exchange and co-ordination among sport clubs andassociations, and they also create independent, collective projects to support theircommunities.

Sport organizations and clubs dominate the membership of Sport Councils butthere are other stakeholder groups involved including: schools, school boards,business, media, health and social service agencies, service clubs, school sport,municipal recreation and local business.

While many individuals and groups are touched by sport and recreation, there areadvantages to a diverse representation on a Community Sport Council. Four keygroups are routinely identified: sport clubs, school sport, municipal recreationand local business. Specific objectives to the development of a Toronto SportCouncil have been identified:

- assist in the continued promotion of the value and spirit of Sport;

- ensure the Plans (contained in the Olympics’ Master Plan and Vision)produced as a result of Toronto’s Olympic Bid effort are not abandoned;

- promote FAST – a fund that is a legacy of the TO-2008 Olympic Bid(more information is provided in the following section);

- re-energize and revitalize the concept of Sport for All;

- enhance National Sport Centre and it’s initiatives;

- ensure current facilities are used to their fullest extent;

- support the development of new facilities;

- inspire youth, provide leadership, role models and mentors;

- ignite and rekindle the passion for our City;


14

- bring the community together with spirit and pride;

- recognize Toronto is already a city of Olympic stature;

- improve accessibility; and

- celebrate the arts and culture community.

Subsequent meetings of the sports and recreations communities will continue togather information, recruit more interest and build momentum. It isrecommended that Council, endorse, in principle the development of a TorontoSport Council.

(ii) Foundation for Athletes and Sport Training

It is worth noting that another organization is operational in a similar pursuitrelated to creating a sport legacy. The Foundation for Athletes and Sport Training(FAST) is an independent, national charitable foundation created inSeptember 2000 by the Toronto 2008 Olympic Bid and its Team 2008 group ofOlympians, Paralympians and grass-roots athletes as part of their commitment tocreating a legacy in the name of sport for Toronto, Ontario and Canada.

FAST provides assistance to developing athletes to help them achieve theirdreams of reaching the podium and educate the public regarding the benefits ofathletics and recreation with respect to health, social development and publicwelfare.

The Foundation is directed and managed primarily by Olympic, Paralympic andinternational caliber athletes. Donations to FAST, kicked off by the Royal Bankof Canada, began in the fall of 2000. Contributions to FAST will be invested,with only the interest being spent each year. By operating as an endowment,FAST will create a lasting sport legacy and benefit Canadian athletes for manyyears to come.

FAST has already developed some exciting partnerships:

- The Province of Ontario will match all private revenue donated to FAST,dollar-for-dollar, to maximum of $10 million over three years. Ontariogovernment funding will be earmarked for Ontario athletes.

- The Department of Canadian Heritage has already contributed asubstantial sum to FAST, and new partnerships will be sought with otherprovinces and territories.

- Warner Music Canada is donating to FAST a share of the proceeds from asale of its new CD, O Canada 2001, featuring a new arrangement ofO Canada by David Foster with vocals by Lara Fabian.


15

- All royalties from the sale of Heroes in Our Midst, a collection ofapproximately 100 inspiring stories by Canadian athletes, will be donatedto FAST.

- FAST received two per cent of sponsorship revenue and half the proceedsof merchandise sales from the Toronto 2008 Olympic Bid.

- FAST will distribute grants to athletes and teams through existing sportorganizations such as the Sport Alliance of Ontario according to criteriaset by FAST. In this fashion, FAST will operate with minimaladministrative costs, ensuring that almost all of the money raised will beused to benefit athletes.

(iii) World Youth Centre

A key aspect of the 2008 Toronto Olympic Bid was the development of youth,sport and cultural legacies. Staff of the Bid worked extensively on thiscomponent and have continued to date notwithstanding Toronto’s loss to Beijing.Bid staff have continued to embrace and nurture this commitment and the WorldYouth Centre is one major initiative in this area along with the Toronto SportCouncil.

The partners involved in the initial concept of the World Youth Centre are keenlyinterested in seeing it come to fruition as a cultural legacy of Toronto’s OlympicBid. To that end, a few dedicated individuals are working to host a pilot projectin the summer of 2002 to demonstrate the potential of such a facility, while at thesame time pursue the long-term vision -- a World Youth Centre located ultimatelyin its own facility on Toronto’s waterfront. This centre, first proposed at the IOCsession in Moscow, is envisioned as a place where young people from around theworld come together to share, to learn, to teach and to do. A place to intervene inand legitimately impact major global issues of the day. A place of legitimatevalue to the world, dedicated to effecting positive change.

Partners in the project include members of the Bid’s Shadow Cabinet (youthcabinet) who were very involved in the concept during the Bid, the CanadianMerit Scholarship Program and various of their students and the Global YouthAction Network among others. Visionary adults involved include Mr. Bruce Mauas the creative force behind articulating the initial concept, Mr. Ken Dryden in hiscapacity as former Ontario Youth Commissioner, Ms. Veronica Tennant in hercapacity as Chair of the national chapter of UNICEF, and several members ofTO-Bid’s leadership team.

Currently, the World Youth Centre concept is in its primary phase, developingmaterials to solicit seed funding to enable it to move forward with the pilot projectas well as attract attention to the long-term vision. The Pilot Project is meant toshow the potential of a World Youth Centre, which is believed to aid itssupporters in the long-term pursuit of funding partners for its capital campaign aswell as an endowment to sustain the Centre’s ongoing programming. It has been


16

suggested that the pilot projects run simultaneously with the capital campaign as away to continue to develop and fine-tune the programs and projects that willultimately infuse the Centre. It is recommended that Council, endorse, inprinciple the development of a Toronto World Youth Centre.

Conclusion:

While the 2008 Toronto Olympic Bid fell short of its expectation, it reaffirmed Toronto’s statusas a potential host for major international sports and cultural events. Built on the solidfoundation of the 1996 Bid, the 2008 Bid enhanced the City’s international image and expandedthe world’s appreciation of its capabilities.

The Olympic bidding process itself, provided a great opportunity for Toronto to reach out to theworld on a venture of significant magnitude, requiring a substantial degree of introspection andvisioning. In doing so, it was demonstrated that it is possible to marshall extremely strongpartnerships among governments, the corporate sector and the public at large. Thesepartnerships, in turn, stimulated a number of important initiatives in including the revitalizationof the waterfront; a renewed sense of volunteerism and enduring civic pride as well as themomentum to crystalize some rich legacies for the youth and athletes of our City and country,namely in the areas of sports, recreation, culture and athlete development.

Contact Name:

Mr. Joe Halstead, Commissioner, Economic Development, Culture and Tourism, Telephone:416-395-6188, Fax: 416-395-0388.

_________

(Copies of Attachment No. 1, entitled “Olympics 2008 - Toronto Financial Statement”, datedNovember 30, 2001, and Attachment No. 2 - the Arthur Anderson report, entitled “Review of2008 Olympic Legacy facilities City of Toronto”, dated March 2001, were forwarded to allMembers of Council with the January 21 and January 25, 2002 agenda of the EconomicDevelopment and Parks Committee, and copies thereof are on file in the office of the CityClerk.)

__________

The following persons appeared before the Economic Development and Parks Committee inconnection with the foregoing matter:

- The Honourable David Crombie, Chair, 2008 Toronto Olympic Bid Corporation;- Mr. Dalton Shipway, Resident;- Mr. Brian Green, Price Waterhouse Coopers;- Councillor Brian Ashton, Ward 36 Scarborough Southwest;- Councillor Pam McConnell, Ward 28 Toronto Centre-Rosedale;- Councillor Joe Pantalone, Ward 19 Trinity-Spadina; and- Councillor Michael Walker, Ward 22 St. Paul’s.

_________


17

(City Council on February 13, 14 and 15, 2002, had before it, during consideration of theforegoing Clause, a report (February 11, 2002) from the City Auditor, entitled “Toronto 2008Olympic Bid – Public Audit Report and Statement”.)

(City Council also had before it, during consideration of the foregoing Clause, a communication(February 4, 2002) from Councillor Michael Walker, St. Paul’s, submitting a list of questionswith respect to the report pertaining to the 2008 Toronto Olympic and Paralympic Games Bid.)

(Having regard that City Council deferred consideration of this Clause to its next regular meetingscheduled to be held on April 16, 2002, the aforementioned report and communication will beresubmitted to Council.)

_________

(City Council on April 16, 17 and 18, 2002, again had before it, during consideration of theforegoing Clause, a report (February 11, 2002) from the City Auditor, entitled “Toronto 2008Olympic Bid – Public Audit Report and Statement”.)

(City Council also had before it, during consideration of the foregoing Clause, a communication(February 4, 2002) from Councillor Michael Walker, St. Paul’s, submitting a list of questionswith respect to the report pertaining to the 2008 Toronto Olympic and Paralympic Games Bid.)

(City Council also had before it, during consideration of the foregoing Clause, a communication(April 15, 2002) from Councillor Michael Walker, St. Paul’s, forwarding comments with respectto the reply from the Commissioner of Economic Development, Culture and Tourism regardingthe 2008 Olympic Bid Report.)

(Having regard that City Council deferred consideration of this Clause to its next regular meetingscheduled to be held on May 21, 2002, the aforementioned report and communications will beresubmitted to Council.)

(City Council on May 21, 22 and 23, 2002, had before it, during consideration of the foregoingClause, the following report (February 11, 2002) from the City Auditor:

Purpose:

To respond to a request from the Economic Development and Parks Committee with respect tothe public audit report and financial statements pertaining to Toronto 2008 Olympic Bid .

Financial Implications and Impact Statement:

There are no financial implications resulting from the receipt of this report.

Recommendation:

It is recommended that this report be received for information.


18

Background:

At its meeting on January 21, 2002, the Economic Development and Parks Committee had beforeit a report from the Commissioner of Economic Development, Culture and Tourism on theToronto 2008 Olympic and Paralympic Games Bid. In considering this report, the Committeerequested that the City Auditor report to City Council at its meeting of February 13, 2002, on thepublic audit report and statement, pertaining to Toronto 2008 Olympic and Paralympic GamesBid.

Comments:

Toronto Olympic Bid (TO-Bid) is a non-share, not-for-profit organization incorporated onSeptember 1, 1998 under the Canada Corporations Act, for the purpose of preparing andpresenting a proposal to the International Olympic Committee to bring the 2008 Olympic Gamesto Toronto.

TO-Bid was created pursuant to an agreement dated April 17, 1998 between the CanadianOlympic Association and the City of Toronto, which defined their respective relationship, rolesand responsibilities in bidding for the 2008 Olympic Games, as well as setting out thetransactional obligations that will follow should the Bid be successful.

Following the completion of the bid process, TO-Bid will be dissolved and all remaining netassets will be distributed in accordance with agreed arrangements. It is anticipated that theTO-Bid will complete its mandate early in 2002.

The firm of Pricewaterhouse Coopers LLP, Chartered Accountants, was retained by TO-Bid toconduct an audit of its financial statements for the period September 1, 1998 to November 30,2001. The financial statements were presented to the Economic Development and ParksCommittee at its meeting on January 21, 2002.

The nature of the audit engagement was to express an opinion on whether the financialstatements were fairly presented in accordance with Canadian generally accepted accountingprinciples. This entailed:

(a) obtaining reasonable assurance that the financial statements were free of materialmisstatement;

(b) examining on a test basis, evidence supporting the amounts and disclosures in thefinancial statements;

(c) assessing the accounting principles used and significant estimates made by TO-Bidmanagement; and

(d) evaluating the overall financial statement presentation.


19

In addition, the audit process included a review of relevant systems and procedures of controls,an analysis of actual expenditures against budget and an assessment of the adequacy ofTO-Bid’s internal financial reporting processes. This work was completed to determine the levelof reliance that could be placed on TO-Bid’s internal control systems and the extent of auditprocedures required.

Pricewaterhouse Coopers issued a clean audit opinion, as outlined in its Auditor’s Report datedDecember 13, 2001.

Conclusions:

TO-Bid is a separate and distinct legal entity from the City of Toronto. While the work ofTO-Bid is dependent upon contributions of goods and services from across the community,including the federal and provincial levels of government, TO-Bid has not received any directfunding from the City of Toronto. Consequently, the City has no direct authority or jurisdictionover the operations of the organization.

The financial statements are the responsibility of TO-Bid’s management. The responsibility ofPricewaterhouse Coopers, as auditor, is to express an opinion on these financial statementsbased on their audit. While there may be certain questions in connection with the content of thefinancial statements, the disclosure of information in the financial statements is in accordancewith the requirements of the Canadian Institute of Chartered Accountants (CICA). The CICA isthe standard setting body in relation to matters concerning financial statement disclosure.

Councillor Michael Walker has submitted a number of questions relating to TO-Bid’s financialstatements and operations to the Commissioner, Economic Development, Culture and Tourism.While these questions may be valid, the answers to such questions would generally not beavailable through a review of an audited set of financial statements. As such, any questions orqueries pertaining to the financial statements or operations of TO-Bid should be directed to theTO-Bid Board and/or Pricewaterhouse Coopers.

As requested by Audit Committee on November 29, 2001, Audit Services is currently performinga review of all spending by City departments, agencies, boards, and commissions, relating toToronto 2008 Olympic Bid, including an analysis of expenditures charged to City credit cards.A report will be issued to the Audit Committee in this regard.

Contact:

Tony Veneziano, Director, Audit Services, Phone: (416) 392-8353; Fax: (416) 392-3754E-Mail: [email protected])

(City Council also had before it, during consideration of the foregoing Clause, the followingcommunication (February 4, 2002) addressed to the Commissioner of Economic Development,Culture and Tourism, from Councillor Michael Walker, St. Paul’s:

Further to the meeting of the Economic Development and Parks Committee on January 21, 2002at which the above report was discussed, I found that report to be deficient in many areas.


20

Thus, in the spirit of openness and transparency, I submit the following questions for yourfurther explanation:

Page 9 of the Report:

1. What were the City staff costs incurred as a result of dedicating staff from the City for theOlympic Bid? For example, Mr. Ray McNeil, who headed the City Olympic Bid office;Mr. Joe Farng, from the Finance Department, produced the Olympic budget. All Citystaff diverted to work part time or full time on the City Olympic Bid represent salaries,benefits and pension contributions paid for by the City while working on the OlympicBid.

Attachment #1 of the Report

2. In the audited financial statements from Price Waterhouse Coopers why do all statementscontain no comparison with the budget for the Olympic Bid? The Bid was budgeted for$20 million. The actual cost of the Bid ballooned 128%, to $45.7 million. Whathappened?

3. What exactly were the contributions in money and in kind broken down separately foreach of the Federal, Provincial and Municipal governments. The Bid received $1 millionas “an advance” in 1998 from the Provincial government. Where is this in the financialstatements? Was it paid back by the Bid to the Province? If yes, when?

4. Why is there no disclosure of the government contributions in the financial statementssimilar to “corporate” and “individual” contributions?

5. Contingent liabilities – Note 4:

(a) This note does not disclose the “two suppliers who are a former officer and adirector of the Bid Committee…” who have reduced their claims from $612,000to $296,000.- What are the names of the former officer and director?- What were their claims for payment for?

(b) Reference is made to a third supplier claiming a $310,000 payment.Who was the supplier?- What was the claim for payment for?- What is the name of the “director” of the Bid Committee who has

guaranteed any future payment to this supplier?

6. Fundraising events – Note 5:

It cost $725,523 (49.4%) to raise $1,468,784. This, frankly, is excessively high!- What is the name of the external fundraising organization?- What are the name(s) of the principals of this external fundraising

organization?


21

- Was this fundraising work tendered?- Were the results of these fundraising events audited to support the

expenses claimed against these fundraising efforts?

7. Olympic Evaluation Commission Reception:

I understand there was a reception held for the Olympic Evaluation Commission atB.C.E. Place in February 2001.

- What was the cost of this reception? I understand it was between$750,000 - $800,000.

- Who catered this reception?- How was this contract awarded?

8. Compensation of Five (5) Highest Paid Officers of Toronto Olympic Bid:

- What were the salaries and other compensation of the five (5) highest paidofficers of the T.O. Bid in each of 1998, 1999, 2000 and 2001? It is nowstandard practice to disclose the full compensation of the five (5) highestpaid officers of a corporation.

9. Schedule of Expenses by Project:

I note the ‘Bid Book Preparation’ total cost was $4,602,293.- Who prepared this ‘bid book’?- Was its preparation put out to tender?

Attachment #2 of the Report:

10. Arthur Anderson – Review of 2001 Olympic Legacy Facilities- What was the cost of this report?- How was Arthur Anderson retained? By tender?- What was the scope of the review undertaken by Arthur Anderson?)

(City Council also had before it, during consideration of the foregoing Clause, the followingcommunication (April 15, 2002) from Councillor Michael Walker, St. Paul’s:

The purpose of this note is to provide some preliminary comments to the April 5, 2002 reply byCommissioner Joe Halstead to my February 19, 2002 inquiry. This inquiry concerned thefinancial statements issued by Toronto Olympic Bid Corporation. The statements were auditedby PriceWaterhouseCoopers LLP.

The February 19, 2002 inquiry (“the Inquiry”) is attached as Appendix 1 and the reply ofCommissioner Joe Halstead, including the incorporated comments of Mr. Borden Rosiak, CA,the Chief Financial Officer of Toronto Olympic Bid Corporation (“the Reply”) is attached asAppendix 2.


22

It is noteworthy that Commissioner Halstead provides the comments of Mr. Rosiak as a “directtranscript of Mr. Rosiak’s reply”. Mr. Halstead states that he “trust(s) the above responses willmeet your requirements. However, Commissioner Halstead does not state whether he, as boththe senior City official involved with the Olympic Bid and as Vice-chair of the Toronto OlympicBid Corporation:

• Compared Mr. Rosiak’s reply to the inquiry to ensure that the reply was complete beforeproviding it to the City Clerk;

• Requested any additions or modifications to the reply; and• Has any additional information concerning the questions in the inquiry.

This note addresses the items as set out in the above two documents.‘I

1. City staff costs

I requested details of “City staff costs incurred as a result of dedicating staff for the Cityfor the Olympic Bid”. Commissioner Halstead does not disclose the cost of thisdedicated staff, instead replying that, ‘The City did not engage any additional staffresources to support the Olympic endeavour”. He asserts, “All staff took on theseresponsibilities above and beyond their regular duties”. Commissioner Halstead doesnot provide any information on the cost of dedicated staff.

2. Comparison to budget in audited statements

Commissioner Halstead and Mr. Borden Rosiak, CA, the Chief Financial Officer ofToronto Olympic Bid Corporation (TO-Bid) state “it is not usual or required disclosureunder GAAP... to present budget data in audited financial statements”. However:

a. There is no provision in the CICA Handbook that prohibits the disclosure of suchinformation;

b. It is not an uncommon practice to include properly labelled budget information,especially for one-time or first-year projects where prior year’s financialstatements do not exist; and

c. The Olympic Bid was promised by former Mayor David Crombie andMr. John Bitove Junior, to be open and transparent.

The Reply goes on to state, “actual cash expenditures were in line with budgetedamounts”. It is unclear how can this be determined by City Council and the taxpayers ifa comparison of the audited statements and the budgeted results is not provided.

3. Government Contributions

a. Government contributions. I requested details of “contributions in money and inkind broken down separately for each of Federal, Provincial and Municipalgovernments”. Commissioner Halstead and Mr. Rosiak do not provide thatanswer, instead stating that there were “No direct government contributors”other than a $4.7 million expense reimbursement. It is noteworthy that:


23

i. The $4.7 million reimbursement in the financial statements of the Bid wasoriginally described only as “expense reimbursement”; it was notdisclosed in the audited financial statements as a governmentalcontribution.

ii. Messrs. Halstead and Rosiak do not identify and disclose the City ofToronto’s contributions to the Bid;

iii. Messrs. Halstead and Rosiak neglect to define their term “directgovernment contributors”:

1. Were funds paid to the Bid by Crown Corporations andgovernment-owned entities considered “direct” or “indirect”contributors?

2. Did any contributions from government entities that were paid toother entities qualify as “direct” or “indirect” governmentcontributions?

3. Waterfront Regeneration Trusta. What Olympic expenses were funded through the

Waterfront Regeneration Trust?b. How have any such outlays been accounted for by

PriceWaterhouseCoopers in the TO-Bid statements?

4. International media campaign to support Toronto’s Olympic Bida. An extensive international media campaign was undertaken

to support the Bid, including paid signage in airports anddisplay advertising magazines distributed to airlinepassengers;

b. Who funded this international media campaign; andc. How much was spent, by whom and where and how is this

spending accounted for in the TO-Bid statements?

4. Disclosure of Government Contributions

I asked “Why is there no disclosure of government contributions in the financialstatements on a basis similar to ‘corporate’ and ‘individual’ statements”.

Commissioner Halstead and Mr. Rosiak do not answer the question, instead stating“See #3 above”. However:

a. There was no disclosure of government contributions in the statements and noexplanation is provided in response to my question; and

b. The lack of disclosure appears to be a departure from the “open and transparentBid” promised and the willingness to disclose information to the taxpayers.


24

5. Contingent liabilities

a. Claim for $296,000 from former officer and director.

i. Identification of related parties and nature of claim for $296,000. Irequested details of the nature and composition of the Bid’s contingentliability of $296,000 to two unnamed persons who were officers anddirectors.

Commissioner Halstead and Mr. Rosiak do not answer the question,instead stating “Under GAAP, financial statement disclosure does notrequire specific identification of directors within the financial statements.As such, no identification has or will be provided”.

It is noteworthy that:

1. Commissioner Halstead and Mr. Rosiak do not reply at all to thequestion about the nature of the amounts claimed.

2. The reply does not state the nature of the claim. Does it relate tothe difference between the claimed cost of operating business jetscontrolled by senior officer(s) of the Bid and the equivalentairfares?

3. GAAP in Canada is set out in the Canadian Institute of CharteredAccountants (CICA) Handbook. There is no provision in the CICAHandbook that prohibits disclosure of the nature of the amountsand the amounts claimed.

4. The CICA Handbook states, in Section 1000.08 and 1000.10 that:a. “[Not for profit organizations] are often restricted by

spending mandates imposed by their members andcontributors”; and

b. “Members of and contributors to not-for-profitorganizations are also often segregated from managementcreating a similar (to profit -oriented enterprises) need forexternal communication of economic information.”

5. The CICA Handbook Section 4460.09 “Disclosure of related partytransactions by not-for-profit organizations”, states that:a. “Information about related party transactions is often more

significant to a financial statement user than informationabout unrelated party transactions, regardless of the size ofsuch transactions”; and

b. “When considering disclosure of related partytransactions, the qualitative as well as the quantitativecharacteristics of materiality are considered.”


25

Based on the above, it is-apparent that “GAAP” as practiced in Canada,and certainly in the post-Enron period may not support minimal or limiteddisclosure financial statements.

ii. Nature of claims for $296,000. In reference to this contingent liability toa related party for $296,000, I asked what was the basis for this claim forpayment. Commissioner Halstead and Mr. Rosiak fail to answer thequestion. No information is provided with respect to the nature of theamount outstanding.

The CICA Handbook (Section 4460.16—Disclosure of related partytransactions by not-for-profit organizations) states, “It is desirable todisclose the nature of the transaction(s) giving rise to the balances”.

Based on the above, it appears that Commissioner Halstead andMr. Rosiak may have a different interpretation of Generally AcceptedAccounting Principles than the Canadian Institute of CharteredAccountants Handbook.

6. Fundraising events

a. Name of fundraising organization and its principal(s). I asked for the name of theexternal fundraising organization and the name(s) of the principals of thisorganization.

Commissioner Halstead and Mr. Rosiak instead replied that the company is aCanadian company and that its senior officers and managers were not officers ofthe Bid. The requested information, being the name of the organization, and thenames of its principals is not provided.

We also note that there is no disclosure of transactions with related parties in theBid’s financial statements.

Can Commissioner Halstead, as Vice-chair of Toronto Olympic Bid Corporation,confirm that this fund-raising operation was indeed beneficially controlled byMr. Bitove’s brother? In this context, were there any other business relationshipsbetween members of Mr. Bitove’s family, including siblings (i.e. clothing,including Bid team uniforms, video and music), and the Bid?

b. Audit of fundraising organization costs. Commissioner Halstead was asked if thefundraising organization was audited, given that expenses consumed 49.4% of thefunds raised.

Commissioner Halstead and Mr. Rosiak do not answer the question, insteadstating only “internal controls within the bid ensured said expenditures werereasonable and supported by appropriate backup documentation”.


26

It is noteworthy that:

i. The Bid relied on “internal controls” only. Was any substantiveverification of these claimed expenses completed by the Chief FinancialOfficer of the Bid, Mr. Rosiak, or his staff to determine the accuracy of thesubmitted expenses.

ii. The reply does not state whether the auditor, PriceWaterhouseCoopers,undertook any substantive verification of the revenues and expenses of thisfundraising operation.

iii. Commissioner Halstead and Mr. Rosiak do not disclose whether thisfundraising operation produced its own audited statements.

On that basis, it does not appear the fundraising revenues and expenses wereaudited by either the Bid’s auditors or any auditors of this anonymous fundraisingorganization.

7. Olympic reception

a. Cost of the reception. I noted that the reported cost of the Olympic EvaluationCommission reception at BCE Place reception was $750,000 to $800,000.

Commissioner Halstead and Mr. Rosiak replied that the reception cost wasbetween $350,000 and $400,000.

However, no breakdown is provided for this amount by category or supplier, thusmaking it difficult to determine the accuracy and completeness of the amountreported by Commissioner Halstead and Mr. Rosiak.

b. Identity of suppliers. I asked who catered the reception.

Commissioner Halstead and Mr. Rosiak, instead of providing the names of themain caterers or suppliers, advise us only that “numerous” organizations wereinvolved. That is very usual, but why do Commissioner Halstead and Mr. Rosiakwithhold the names of these organizations?

There is also no disclosure as to which, if any of the suppliers, were relatedparties. Why is this direct question not being answered? No part of the CICAHandbook prohibits such disclosure. Secrecy from other bid cites is no longer anissue.

8. Compensation

I asked for the compensation of the five highest paid officers of the Toronto Olympic Bid.The financial statements of the predecessor organization, Bidco disclosed that the topfive persons were paid $460,000 to the end of 1998.


27

Commissioner Halstead and Mr. Rosiak do not answer the question, instead stating that:

a. “neither the Handbook nor the incorporating statute requires the disclosure ofthe compensation paid to the five highest officers of the Corporation”;

b. “the directors of the Bid did not receive nay Director’s fees”; andc. “the Chief Executive Officer and the Chief Financial Officer did not receive any

employment compensation”.

We note that:

a. There is no provision in the CICA Handbook that prohibits this disclosure;b. The articles of incorporation would not typically specify the nature and extent of

the financial disclosure to be provided;c. Mr. Rosiak, as an officer of a public company, is experienced with this disclosure

requirement;d. The auditor determines the disclosure, based on the needs of the foreseeable users

and stakeholders in an entity; ande. This project was financed by donations from many sources including

corporations, individuals and government. What, therefore, is the basis for thisapparent prohibition of disclosure of the details of the top five salaries paid, giventhis project was financed both directly and indirectly by taxpayers?

Concerning Mr. Rosiak’s assertion that “the Chief Executive Officer and the ChiefFinancial Officer did not receive any employment compensation”; we note that there isno disclosure of whether for either person, there was any compensation paid to anyentity, either their employer or any other organization or individual.

9. Bid Book

a. Identity of preparer of Bid Book. I asked who prepared the bid book.Commissioner Halstead and Mr. Rosiak do not answer the question, insteadstating that an unnamed “senior official of Bid” coordinated it.

b. Tender. I asked if the bid was put out to tender. Commissioner Halstead andMr. Rosiak do not provide any answer to the question. Did:

i. the “senior official” of the bid who “coordinated” the bid book do so inhis or her capacity as an officer of the Bid or as a supplier to the Bid? and

ii. the bid book work go for tender?

In light of the totally inadequate response of the Commissioner of Economic Development.Culture and Tourism to straight forward questions on a report prepared by himself as outlined inmy letter to you dated April 11, 2002, it is paramount that we get direct answers on all the factsthat have been asked for in this case. Thus, I am requesting that your Committee formally askthe questions again of Commissioner Halstead and demand a full, open, transparent response tothese reasonable questions in our role as the people’s representatives.


28

Appendix 1

Inquiry to Mr. Joe HalsteadCommissioner, Economic Development, Culture and Tourism

Re: January 16, 2002 ReportUpdate – 2008 Toronto Olympic and Paralympic Game Bid

Further to the meeting of the Economic Development and Parks Committee on January 21, 2002at which the above report was discussed, I found that report to be deficient in many areas.

Thus, in the spirit of openness and transparency, I submit the following questions for yourfurther explanation:

Page 9 of the Report:

1. What were the City staff costs incurred as a result of dedicating staff from the City for theOlympic Bid? For example, Mr. Ray McNeil, who headed the City Olympic Bid office;Mr. Joe Farng, from the Finance Department, produced the Olympic budget. All Citystaff diverted to work part time or full time on the City Olympic Bid represent salaries,benefits and pension contributions paid for by the City while working on the OlympicBid.

Attachment #1 of the Report

2. In the audited financial statements from Price Waterhouse Coopers why do all statementscontain no comparison with the budget for the Olympic Bid? The Bid was budgeted for$20 million. The actual cost of the Bid ballooned 128%, to $45.7 million. Whathappened?

3. What exactly were the contributions in money and in kind broken down separately foreach of the Federal, Provincial and Municipal governments. The Bid received $1 millionas “an advance” in 1998 from the Provincial government. Where is this in the financialstatements? Was it paid back by the Bid to the Province? If yes, when?

4. Why is there no disclosure of the government contributions in the financial statementssimilar to “corporate” and “individual” contributions?

5. Contingent liabilities – Note 4:

(a) This note does not disclose the “two suppliers who are a former officer and adirector of the Bid Committee…” who have reduced their claims from $612,000to $296,000.- What are the names of the former officer and director?- What were their claims for payment for?


29

(b) Reference is made to a third supplier claiming a $310,000 payment.- Who was the supplier?- What was the claim for payment for?- What is the name of the “director” of the Bid Committee who has

guaranteed any future payment to this supplier?

6. Fundraising events – Note 5:

It cost $725,523 (49.4%) to raise $1,468,784. This, frankly, is excessively high!- What is the name of the external fundraising organization?- What are the name(s) of the principals of this external fundraising

organization?- Was this fundraising work tendered?- Were the results of these fundraising events audited to support the

expenses claimed against these fundraising efforts?

7. Olympic Evaluation Commission Reception:

I understand there was a reception held for the Olympic Evaluation Commission atB.C.E. Place in February 2001.

- What was the cost of this reception? I understand it was between$750,000 - $800,000.

- Who catered this reception?- How was this contract awarded?

8. Compensation of Five (5) Highest Paid Officers of Toronto Olympic Bid:

- What were the salaries and other compensation of the five (5) highest paidofficers of the T.O. Bid in each of 1998, 1999, 2000 and 2001? It is nowstandard practice to disclose the full compensation of the five (5) highestpaid officers of a corporation.

9. Schedule of Expenses by Project:

I note the ‘Bid Book Preparation’ total cost was $4,602,293.- Who prepared this ‘bid book’?- Was its preparation put out to tender?

Attachment #2 of the Report:

10. Arthur Anderson – Review of 2001 Olympic Legacy Facilities- What was the cost of this report?- How was Arthur Anderson retained? By tender?- What was the scope of the review undertaken by Arthur Anderson?


30

Appendix 2

Re: Enquiry from Councillor Michael Walker2008 Toronto Olympic and Paralmpic Games Bid

In response to Councillor Walker’s enquiry dated February 19, 2002, and as per your letter ofdirection, I am pleased to provide the following information.

1 City Staff Costs

The City did not engage any additional staff resources to support the Olympic endeavour.At different times staff from various City departments (including WES, UDS, Legal,Finance, CAO, and EDCT) contributed to the project as required to meet the reportingrequirements obligated by Council. All staff took on these responsibilities above andbeyond their regular duties, as they would for any other special City project, at noincremental cost to the City, including the Commissioner himself.

Question No.’s 2 through 9 in Councillor Walker’s enquiry relate to thePriceWaterhouseCoopers LLP audited financial statement of the 2008 Toronto Olympic Bid(TO-Bid). As indicated in the City Auditor’s report dated February 11, 2002, TO-Bid is anon-share, not for profit organization which was incorporated on September 1, 1998 under theCanada Corporations Act, for the purpose of preparing and presenting a proposal to theInternational Olympic Committee to bring the 2008 Olympic Games to Toronto. TO-Bid is aseparate and distinct legal entity from the City of Toronto, and as such the City has no directauthority or jurisdiction over the operations of the organization.

The TO-Bid financial statements and operations are the responsibility of the TO-Bidmanagement. TO-Bid management commissioned and adhered to a Financial ProceduresManual developed by the accounting firm Ernst and Young and followed a Code of Conductwhich was formally approved by the Board of Directors. In addition, TO-Bid was guided in itsbusiness affairs by a Board-appointed Ethics Commissioner, the Hon. Charles L. Dubin, formerChief Justice of Ontario. In order to address the Councillor’s questions, it was necessary forme to forward them to Borden D. Rosiak who acted as the Chief Financial Officer of the2008 Toronto Olympic Bid. The responses to questions 2 through 9 below are a direct transcriptof Mr. Rosiak’s reply.

2. Olympic Bid Budget

It is not usual or required disclosure under GAAP (generally accepted accountingprinciples) to present budget data in audited financial statements. This type ofinformation would normally be found in financial statements prepared for Board andmanagement purposes.

The increase in the actual costs of Olympics 2008 – Toronto (“Bid”) was primarilyattributable to the large amount of in kind contributions received from corporations whowere fully supportive of the Bid. Actual cash expenditures were in line with budgetedamounts.


31

3. Government Contributions

Other than the expense reimbursement by the federal and provincial governments of$4.7 million set out in the Statements of Operations in the audited financial statements,there were no direct government contributors. In addition, the Province of Ontarioadvance was fully repaid.

4 Disclosure of Government Contributions

See #3 above.

5. Contingent Liabilities

Under GAAP, financial statement disclosure does not require the specific identificationof officers, directors or suppliers within the notes to the financial statements. As such, noidentification has or will be provided.

6. Fundraising Events

The external fundraising organization, a Canadian firm, was selected after following theagreed upon tendering process. Neither the firm nor its senior officers were directors orofficers of the bid.

Prior to paying any expenditures, internal controls within the Bid ensured that saidexpenditures were reasonable and supported by appropriate backup documentation.

7. Olympic Reception

The cost of this event was not in the range of $750,000 to $800,000, as noted byCouncillor Walker, but closer to $350,000 to $400,000. Numerous organizations wereinvolved in organizing and carrying out the event from security to entertainment tocatering. No one organization provided all services for this event.

8. Compensation

The financial statements for the Bid have been prepared in accordance with GAAP as setout in the Handbook of the Canadian Institute of Chartered Accountants.

Neither the Handbook nor the incorporating statute for the Bid requires the disclosure ofthe compensation paid to the five highest paid officers of the corporation.

I can certainly confirm that the directors of the Bid did not receive any Directors fees andthat the Chief Executive Officer and the Chief Financial Officer did not receive anyemployment compensation.


32

9. Bid Book

The preparation of the Bid Book was coordinated by a senior official of the Bid.Considering the size and complexity of the Bid Book, its preparation involved advisorsspecializing in a wide variety of areas, including legal, environment, transportation,security, finance, architecture and construction.

It should be noted that of the total $4.6 million cost to produce the Bid Book $1.4 millionwas in cash and $3.2 million was from in kind contributions.

10. Review of Olympic Legacy Facilities

The review of the Olympic Legacy Facilities was one of many projects contained in thetripartite Waterfront agreement between the City, the Province of Ontario, and theFederal Government. The total cost of this project was $42,340 of which the City’s sharewas one-third, which was paid from the corresponding Waterfront project capital budget.

The scope of the review involved five key elements:• Completing an inventory of current recreational and sports facilities in the broader

region;• Reviewing the operations and uses of legacy facilities in other Olympic cities to

ascertain successful models• Identifying potential roles and uses for the Olympic legacy facilities in meeting local,

regional and national needs for quality recreation and sports facilities;• Identifying potential operating models that incorporate private sector involvement;

and• Ascertaining the public sector’s financial obligations associated with operating and

maintaining these facilities

I trust the above responses will meet your requirements.)

2008 toronto olympic and paralympic · 2002-06-05 · toronto city council economic development and...

Documents