VANCOUVER - Vancouver 2010 Olympic organizers said Friday in their latest quarterly report that operating expenses are climbing as venue-construction costs decline.

The organizing committee -- known as VANOC -- is also reporting a boost in its cash balance for the three months ending Jan. 31, which rose by more than $16 million from the end of October, to $56.5 million.

"Venue-development expenditures were down from the previous quarter as activity slows in the winter season and several large venues reach substantial completion,'' chief financial officer John McLaughlin said in a conference call with reporters.

"Operating expenditures continue to grow as the level of activity across VANOC ramps up.''

So far, VANOC has spent $466.3 million on venue construction, almost 79 per cent of the budget, he said.

"This represents the substantial completion of four outdoor and one indoor venue,'' McLaughlin said, adding the venue development budget remains on schedule and on budget.

Its venue development central contingency remains adequate to protect against the remaining $125.5 million in the venue construction budget, the financial report said.

"While challenges remain, we are pleased with the progress of the venue program during a period of rapidly rising costs in the construction industry,'' McLaughlin said.

VANOC's deferred operating expenses in the second quarter jumped to $43.1 million, compared with $25.7 million for the period ending Oct. 31, when unrealized foreign-exchange gains or losses were removed.

The majority of expenditures were on sport, technology and staff as 87 new hires boosted full-time staff to 590 to date.

Net deferred operating revenues in the last quarter also grew to $43.1 million, well up from $6.7 million in the previous quarter thanks largely to more sponsorship money.

All operating revenues and expenses are deferred before Games time in accordance to Canada's generally accepted accounting principles.

VANOC said it has now entered into domestic sponsorship agreements worth about $709 million, more than 90 per cent of its overall target of $760 million.

VANOC's total venue-development expenditures for the quarter were $38.4 million, compared with $63.3 million in the previous quarter and now total $466.3 million.

"The next two years will see very significant increases in spending as we move from our planning phase into operations,'' McLaughlin said.

As venues near completion, VANOC will now begin to shake them down with sporting events leading up to the Games, which now are less than two years away, said chief executive officer John Furlong.

Facilities on Cypress Mountain were opened for freestyle and snowboard athlete training and the Whistler Creekside venue hosted the an FIS Alpine World Cup event.

Furlong said VANOC is preparing to host 18 sports events, one more this year and 17 in 2009 -- 13 in February and March.

VANOC literally weathered an important test this month at the Alpine World Cup event.

Working with Environment Canada, Furlong said organizers were able to accurately predict weather conditions and shift the women's downhill start time by 30 minutes to run the race during a favourable weather window.

"The fact we could stage the event reduced our operational risk,'' he said. "It eliminated the costly need for a significant delay and may even have prevented outright cancellation of the event.''

Furlong said organizers also learned lessons about moving course workers and machinery, the maintenance of consistent snow conditions on the course and snow clearing and track preparation.

Furlong also said VANOC has received 38,982 applications from potential Games volunteers and processed more than 31,000 of them for the 25,000 needed volunteer workers.

Another index of interest is traffic on the vancouver2010.com web site, he said.

"We now have a general information update subscription list of over 100,000 individuals and a ticketing and merchandise contact demand list of over 90,000 persons,'' Furlong said.

Website page views in February alone equalled the total number of page views for the first four months of last year.