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≡ CITY COST RECOVERY ≡
The Los Angeles City Council approved two motions on Tuesday related to the 2028 Games by a 14-0 vote on Tuesday, one directly specifically at recovering City costs.
It directed the City staff to “finalize and present to Council within 14 days” an agreement with the LA28 Olympic and Paralympic Games organizing committee for the payment by the organizers of City costs related to the Games.
This is the “Enhanced City Resources Master Agreement” (ECRMA) which was due to be completed by 1 October 2025, but which has become bogged down in a disagreement over, significantly, security costs.
A March memorandum from City Attorney Hydee Feldstein Soto to the Council noted the delay and the prime issues:
● “The ECRMA as drafted by LA28 limits the obligation to reimburse City costs before LA28 is permitted to create its own legacy fund with the surplus.”
● “Thus, there are two remaining issues in the ECRMA that must be resolved in the City’s favor for LA28 to fulfill their promised ‘no cost to taxpayers’ foundational principle – (1) what happens if the federal government does not pay the assumed $1 billion and (2) what happens if the City’s extraordinary expenses exceed $1 billion?
“In either situation, the Office believes that all surplus funds must reimburse the City and its taxpayers first as promised before any surplus funds are available for a legacy or tribute fund.”
Tuesday’s motion directs the City Administrative Officer, City Legislative Analyst and the City Attorney to finish the ECRMA pronto with specific requirements:
● “LA28 shall reimburse the City for all Enhanced City Resources (ECR) exceeding the City’s ‘normal and customary’ operations required for and in direct support of the Games.”
● “Reimbursement shall include the costs of ECR at the time of delivery.”
● “LA28 shall reimburse the City for all LA28-requested infrastructure improvements beyond the normal and customary responsibilities of the City” and also
● “A payment schedule shall be established to provide advanced payment to the City for estimated costs of ECR based on when the costs are anticipated to be incurred.”
● “LA28 shall satisfy its financial and other obligations specified in the Host City Contract, the Games Agreement, the ECRMA, and any other relevant agreements with the City, prior to declaring or disbursing any surplus funds.”
The current agreement between LA28 and the City from 2021 requires LA28 to fund a “deficit” account of $270 million, to pay the City’s initial share of any deficit ($270 million) before the State of California’s responsibility to pay the next $270 million kicks in. But the City has unlimited liability beyond that.
The negotiations have dragged on now more than seven months past the originally-expected conclusion of this agreement and the City Council has become extremely worried that it will be stuck for a huge bill at the end, especially for security.
Last week, Captain Shannon White of the Los Angeles Police Department explained during the Council’s budget hearings, referring to the $1 billion Federal Olympic security appropriation in the One Big Beautiful Bill Act of 2025 (known as “OB3″):
“Salaries alone will greatly exceed what there is, what is available … that’s knowing what we will deploy as the City of L.A. from our own resources, can move beyond what OB3 can properly fund and knowing that other municipalities will be looking to attach to that [funding], as well as the City beyond just Fire, Police and DOT [transportation].
“When we ran those calculations, we exceeded the billion dollars on our own salaries that are deployed towards those Games, and so I would like to offer some clarity on that to make sure that as we’re moving forward, ‘maybe OB3 can take care of this,’ we certainly as the City of L.A. will greatly exceed what is available.”
Police Chief Jim McDonnell noted that “LA28 confirms that they have zero police or public safety budget, and while they do have a security budget, it doesn’t cover law enforcement.”
Something has to give, and soon.
¶
The other motion passed by the City Council directs the Chief Legislative Analyst and Bureau of Contract Administration to report on whether the LA28 plan for procurement satisfactorily meets the Council’s requirements for local spending, with quarterly reports.
Further, the agencies are asked for “recommendations for policy, reporting, and enforcement mechanisms that the City Council may pursue to protect the City’s financial and economic interests, and to ensure that LA28 procurement commitments result in measurable, transparent, and equitable economic benefits for City of Los Angeles businesses.”
No timeline was included in the motion.
¶
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