The Los Angeles City Council voted 10-4 to approve a financial agreement with the LA28 Olympic organizing committee that creates a $270 million contingency fund meant to shield taxpayers from cost overruns at the 2028 Games.

Four council members voted against the deal, warning it still leaves the city exposed to potentially unlimited losses. City Controller Kenneth Mejia followed up on Aug. 27 by submitting a formal financial data request to LA28, saying he intended to "use my full authority under the City Charter to open up LA28's books," as Spectrum News reported.

The council approved the amended Enhanced City Resources Master Agreement (ECRMA) on Aug. 12. The agreement spells out how Los Angeles will be reimbursed for services it provides during the Olympics, such as street sweeping and traffic officers, that are not eligible for federal reimbursement. The agreement had been due in October 2025 but was not submitted until June 2026.

How the money works

If the Games lose money, LA28 would first draw from its own $330 million internal contingency fund, as the Los Angeles Times reported via the Post Guam. After that, LA28 and the city would tap a second $270 million fund set up to protect taxpayers.

Beyond a $600 million total deficit, the city is guaranteed to cover the next $270 million. The state would then cover another $270 million. Past that threshold, the city faces unlimited liability, according to MyNewsLA.

City Administrative Officer Matt Szabo, the city's lead negotiator on LA28 agreements, told the council the deal does not have the capability of eliminating the financial risk the city agreed to take on when it signed up to host the Games. He said LA28's reports show the organizing committee is meeting its sponsorship and revenue targets.

Dissenters say deal falls short

Council members Monica Rodriguez, Eunisses Hernandez, Ysabel Jurado and Nithya Raman voted no and called for the agreement to be rewritten.

Rodriguez said after the vote that the agreement "fails to provide any safeguards for Los Angeles taxpayers and most assuredly risks the city's fiscal stability." She warned that public safety costs alone could surpass $1 billion if an emergency or major weather event strikes during the Games. In April, Rodriguez had sent LA28 a letter raising that concern.

The Los Angeles Police Department and other law enforcement agencies are expected to provide about $732.2 million in Games-related security, the Westside Current reported. Those costs are not covered by the agreement the council approved.

The council sidelined separate proposals from council members Imelda Padilla, Hernandez and Raman that aimed to reduce the city's financial exposure. Raman's proposal, which would have required LA28 to use any surplus revenue to pay outstanding city costs, was sent back to the council's Ad Hoc Committee on the 2028 Olympic and Paralympic Games.

One amendment did pass: a requirement that LA28 pay for an audit after the Games before city funds can be tapped to cover costs exceeding revenues. LA28 must still approve that change.

Olympic budget up $2 billion since 2017

When the city agreed in 2017 to serve as the financial backstop for the Olympics, the budget stood at $5.306 billion. It has since grown to $7.263 billion, according to the Controller's Office.

Mejia said the city missed an opportunity to add stronger protections. "We're already locked into a huge financial liability," Mejia said. "This was one of our big chances to throw in protections for the city and also provide that transparency."

LA28 spokesperson Jacie Prieto Lopez said in a statement that the agreement delivers on the committee's commitment to hold fiscally responsible Games.

The city and LA28 still need to negotiate separate Venue Service Agreements to determine exactly what Los Angeles provides at Olympic venues and how much it will be reimbursed. Those agreements are expected to be finalized by July 2027, with costs set by Oct. 31, 2027. The Summer Games are scheduled to begin July 14, 2028.