A key agreement outlining what city services Los Angeles will provide for the 2028 Olympic Games and how the cash-strapped city will be reimbursed for its extra work is now six months late.
High-stakes talks over that agreement between the city and the private Olympics organizing committee LA28 have dragged far past an Oct. 1 deadline, sparking concern from city officials and observers that taxpayer dollars could be on the line.
City Controller Kenneth Mejia, who audits and scrutinizes city finances, called the delay "deeply troubling."
"The City needs a guarantee from LA28 that they will not go over budget and will pay for all of the additional security, sanitation, transportation, administrative, and any other costs associated with the Games," Mejia said in a statement to LAist. "The preparation and execution of these events should not come at any cost to Los Angeles taxpayers."
The 2028 Olympics are intended to be privately financed, and an existing city agreement with LA28 states that the Olympics organizers, not L.A., will pay for extra costs for public services in support of the Games – like policing and traffic control.
But the nuts and bolts of that arrangement have not been finalized, and if the agreement leaves L.A. exposed to unexpected or additional expenses, taxpayers could end up paying many millions.
Hosting the Games is already an enormous financial risk for Los Angeles. The city is the financial backstop for the Olympic Games, meaning if the organizing committee runs into the red, L.A. will pick up the bill, along with the state of California.
The extra staff and resources the city will dedicate to the Games represents another area where L.A. may end up with surprise costs.
Why is the agreement delayed?
Neither the city nor LA28 have shared publicly what's holding up the deal.
Past public meetings and comments indicate that the two sides may disagree over the scope of LA28's obligation to cover city expenses.
At a December city council meeting, the city administrative officer and council members discussed the boundaries of where LA28's responsibility for a service like traffic control ends and the city's responsibility begins.
The city's Chief Legislative Analyst Sharon Tso, who is leading negotiations with LA28 along with the City Administrative Officer, told LAist in an email Wednesday that the city is still discussing the terms for things like cost estimates, service levels, and timelines for repayment.
"We continue to work diligently with LA28 to finalize the agreement," Tso wrote. "I do not have an anticipated completion date at this time."
Jacie Prieto Lopez, Vice President of Communications and Public Affairs for LA28, said in a statement provided to LAist that the organizing committee was working with city leadership to finalize the agreement.
"We remain engaged in good faith negotiations and look forward to our continued partnership with the City of Los Angeles," she said.
Once the agreement is completed, it will be submitted to the city council and mayor.
LA is counting on federal funding
LA28 isn't the only entity expected to pay L.A. for Olympics-related costs. The city also is banking on money from the federal government, which has allocated $1 billion for security costs.
The city administrative officer told the council last year that city spending on security at the Olympic venues, like for local police, should be covered by those funds.
But exactly how much federal money the city of Los Angeles will actually get is yet to be determined. And it's possible that money could face delays – a problem World Cup host cities including Los Angeles encountered in the run-up to this summer's tournament.
