LA City Council approves deal with LA28 on Olympics spending. Huge financial risks remain

The City of L.A. is still on the hook for a potentially infinite amount of money if the 2028 Olympics and Paralympics are a financial failure.

But in the latest attempt to moderate that risk, the Los Angeles City Council voted 10-4 Wednesday to approve an overdue agreement with the private Olympic organizing committee LA28.

What to know about the agreement 

Matt Szabo, the City Administrative Officer who negotiated the agreement with LA28, spoke at Wednesday's council meeting.

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Courtesy L.A. City Council

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The deal lays out how LA28 will repay the city for services rendered during the Games, like traffic control. It establishes that the city will seek reimbursement for the cost of policing venues from the federal government, which is overseeing Olympics security.

The council also approved an amendment to a 2021 agreement between the city and LA28 that allows the city to tap an LA28 contingency fund to recoup security costs if the federal government doesn't cover those expenses.

Matt Szabo, the City Administrative Officer who negotiated the agreement with LA28 alongside the city's Chief Legislative Analyst Sharon Tso, acknowledged the agreement had big limitations. At the same time, he told the council Wednesday that he believed it was the best bet at protecting the city.

" This is not an agreement that is intended or even has the capability of eliminating risk that the city has agreed to take on," Szabo told the council. "The purpose is to limit the risk to the greatest extent possible. And we do believe that it achieves that."

Still, some in city government said the agreement doesn't go far enough to protect taxpayers.

"Despite being delivered months behind schedule, it still fails to establish a clear baseline of City services, financial protections for Los Angeles taxpayers, and accountability that the City needs to successfully host the Games," said Councilmember Monica Rodriguez, who was one of four councilmembers to vote against the agreement, in a statement.

The agreement now heads to Mayor Karen Bass and Council President Marqueece Harris-Dawson for a signature with LA28.

Concerns about the deal with security costs looming

A sticking point for dissenters is security costs — which are expected to be massive. Organizers and the city are counting on the federal government to pay for public safety at Olympic venues that are considered part of a "national special security event."

LA28 has not included security costs in its $7.1 billion budget — a fact that City Attorney Hydee Feldstein Soto criticized earlier this year.

The federal government has so far allocated $1 billion for security costs for the Olympics. Exactly where those federal funds will go has not yet been determined, and there's no guarantee they will cover all of L.A.'s policing costs.

Los Angeles Police Chief Jim McDonnell estimated LAPD personnel costs alone could exceed that total, putting the cost for his department at $1.15 billion in one budget memo issued earlier this year.

Protections for the city are limited

Under an agreement approved by the council Wednesday, if L.A. is not reimbursed by the federal government for all its eligible expenses, it could dip into LA28's contingency fund of $270 million before the private organizing committee could use that money for any legacy projects.

Here's the catch: that bucket will first be used for any costs that Olympics organizers still owe if they run out of revenue — meaning if the Olympics don't turn a profit, the city's access to that money will depend on how much is left for the taking.

" LA28 has no real incentive not to bankrupt us," said Chris Tyler with the community organization Strategic Actions for a Just Economy in public comment. "And if they come in under-fundraised and over-budget, taxpayers will be on the hook for billions of dollars potentially."

Szabo, the city administrative officer, said later in the council meeting that the Olympics turning a profit was in L.A. and LA28's best interest.

" We are joined at the hip here," he said. "They want a successful Olympics. They want to have a successful legacy for those '28 Olympics. We want a successful Olympics."

The agreement is late — and some still say it was rushed

At the Wednesday meeting, several city council members introduced six amendments to the agreement with LA28, aimed at clarifying or tightening LA28's obligation to the city.

All but one proposal was referred to committee for further discussion, and weren't included in the final agreement. Council President Harris-Dawson warned the council that approving amendments would send the city back into negotiations with LA28 that had already dragged on for years.

Councilmember Eunisses Hernandez, who introduced two amendments seeking to regularly audit LA28's finances and guarantee reimbursements for unexpected "health and safety incidents" related to the Games, responded saying she hadn't had adequate time to consider the deal.

" I have Dodger Stadium in my district, which is an Olympic venue," she said. "So you're asking me to make a decision on something that's going to impact us for years to come, and particularly within the heart of my district, but I was only briefed two weeks ago."

City Controller Kenneth Mejia also criticized the process in an interview with LAist.

" Why are we rushing through this thing so fast?" he said, calling the deal "fiscally irresponsible" and asking: "Why are we not trying to maximize protections for the city today?"

Some, though, told the council they thought the agreement, which was due Oct. 1, 2025, was already too delayed.

" Every additional month of delay reduces the run[way] for detailed planning for our businesses," said Jacqueline Iniguez with the L.A. Area Chamber of Commerce in public comment. "The city and LA28 now need to move forward together quickly to keep the 2028 games on track." 

More big agreements ahead 

Jacie Prieto Lopez, a spokesperson for LA28, said Olympics organizers were proud of the final agreement, saying it "delivers on our commitment to execute a safe, secure, and fiscally responsible Games that benefit Los Angeles for decades to come."

The agreement approved by council Wednesday will serve as a master document as the city now goes on to execute "Venue Service Agreements" – even more specific agreements between LA28 and the city on what services will be provided at each venue in the city.

Other municipalities hosting Olympic venues will also have to execute their own agreements with LA28 on reimbursement.

How those agreements are inked will also have implications for the city of Los Angeles. It's the financial backer of the entire Olympics, whether the venues fall inside city boundaries or not.