Vancouver's finance director is recommending the city take over the financing of the Olympic athletes village to save money and ensure the project is completed on time.

Kenneth Bayne will take his message to city council Tuesday with the hope it borrows the remaining $450 million needed to finish the village and advance the next construction payment due to developers.

"Providing this type of support is a highly unusual role for the city to play," Bayne said in a report.

"However, the refusal of the current lender to provide funding to complete the project suggests that this may be the only way to ensure project completion to meet the guarantees given to (the organizing committee)."

City officials received authority to take out the loan on the project during a special sitting of the B.C. legislature over the weekend, giving them the right to borrow money without going to referendum.

While the remaining cost on the project is only $450 million, there was no restriction in the legislation on how much the city can actually borrow.

Bayne said the interest is the biggest fiscal problem with the current financing structure and that the city's takeover of the project could help cut the rate from as much as 11.5 per cent to as little as five per cent.

But he noted in his report that the city's role as financier isn't without risk.

That may include a downgrade of the city's triple A credit rating that could make it harder to borrow other funds until the athletes village loan is paid off.

Two credit agencies put the city's credit rating on a watch last week after it first made the details around the village financing deal public.

Bayne suggested the city find a way to borrow the money by March 3.

In the meantime, he said Vancouver could make the February payment to developers by using their $29-million down payment on the prime piece of waterfront land that's home to the village.

The costs of the $1 billion project, which will house 1,100 athletes during the Games before being converted to private housing, break down into $193 million for land, $750 million for construction and $125 million for cost overruns.

The city still owns the title to the land and the project's current lender, Fortress, has paid out $317 million on the initial construction loan.

But the company stopped payment in September and the city has been covering construction cost since then through a $100-million loan to the developer.

Bayne said in his report that the city will expect Millennium to pay back the money for the cost of development before it makes any profit.

Just over one-third of the 850 units that will be available to the public after the Games have already been sold, though not all of the units are currently on the market.

While the Olympic organizing committee, known as Vanoc, has repeatedly said the village's problems rest with Vancouver, its executive vice-president in charge of marketing and sponsorship acknowledged Tuesday that the problems are tainting the Games as a whole.

"When you hear the words Olympic bailout, people assume that these are costs that are being spent because of the Games, which is simply not the case," said Dave Cobb at the announcement of a new sponsor for the Games.

"If the village, for example, . . . makes $200 million, I don't think people are going to be saying that's Olympic profit and contributing it to us."

With files from The Canadian Press