L.A. City Council set to vote on 2028 Olympics plan before key financial reports are completed

The Los Angeles City Council is set to approve an agreement to host the 2028 Olympics without knowing the summer Games’ budget or receiving an independent evaluation of the spending plan.

The council is expected to vote as soon as next week following an agreement reached between the International Olympic Committee and LA 2028, the bid committee for L.A. to host the Games.

The committee, a private nonprofit seeking the Games, prepared a $5.3-billion budget for the 2024 Olympics that was analyzed by accounting firm KPMG.

The committee will prepare a new budget for the 2028 Games, LA 2028 Chief Executive Gene Sykes said in an interview Friday, but that spending plan won’t be finalized for months, he said.

The lack of financial details highlights how quickly the IOC, the bid committee and city leaders are moving to complete the 2028 Olympics deal. The accelerated process is criticized by NOlympics LA, a group opposed to the city hosting the Games.

However, bid committee leaders say no venue changes are expected for the 2028 Games, and they will receive an increased contribution from the IOC.

The IOC will award the Games in September and a City Council vote is needed by mid-August, officials said.

City Council members said they are still reviewing the plan following a briefing Friday by Sykes and city advisors.

“I see no red flags so far,” Councilman Mitch O’Farrell said. “But I’m going to take a very critical eye at these reports.”

O’Farrell said the KPMG analysis for the 2024 budget “looked really strong.” The council will receive regular updates about the budgets from the Olympic committee in the coming years, he added.

Securing the 2028 Games requires the council’s approval of both the host city contract and a memorandum of understanding with LA 2028 and the yet-to-be-formed organizing committee that will run the Games.

The host city contract reflects the city’s commitment to host the Games in 11 years and puts Los Angeles taxpayers on the hook for cost overruns if unforeseen expenses arise.

The council is planning a second committee hearing on the Olympics next week, followed by a full council vote, and City Council President Herb Wesson has vowed to thoroughly study the deal.

“We will vet the proposal,” Wesson said earlier this week. “We’ll scrub it, scrub it and rescrub it.”

NOlympics LA organizer Jonny Coleman said he was shocked that the council would vote without knowing the budget.

“Whether you like the Olympics or not, this is a terrible process,” Coleman said. “If they don’t have any of the details, they shouldn’t be moving forward.”

Sykes said the IOC has given the committee until March 2019 to finalize agreements with venue operators for the Games.

The budget for the 2028 Games will be released at some point before that date, he said. KPMG will also review the spending plan for the city.

IOC’s deal with the bid committee includes new sponsorship sales, retention of a potential surplus, and funding for youth sports programs throughout the city. Those details will be factored into the 2028 budget, Sykes said. Inflation models will also be used for cost and revenue estimates, he said.

Overall, the 2028 Olympics plan is the same as the one for 2024, Sykes said. That proposal is low-risk because it uses existing venues such as the Coliseum, Staples Center and Pauley Pavilion, experts say.

A city report released Thursday by the offices of the city administrative officer and the chief legislative analyst outlined several concerns about the 2028 Games.

The report notes “the bid committee is preparing a revised budget for the 2028 Games. As a result, the city has not had an opportunity to conduct a budget validation of the 2028 Games budget.”

Also, hosting in 2028 increases uncertainties “concerning future economic and political conditions,” the report states.

The report also addresses state legislation that provides for $250 million in state taxpayer support to cover cost overruns. However, that legislation was for the 2024 Games, according to the report.

Given the state Legislature’s schedule and ability to introduce a new bill or change the existing one, “the question of state support may not be resolved until 2018,” the report stated.

At Friday’s hearing, Councilman Paul Krekorian said the city needs assurance from the state about the $250-million guarantee. The state also may need to increase the guarantee because of inflation, he said.

“We are taking on some added risk with the state guarantee because it could be that they don’t act,” Krekorian said.

Overall, city representatives were largely positive at Friday’s meeting about the 2028 Olympics agreement. Chief Deputy City Atty. Jim Clark told council members that “the risk in this deal is acceptable.”

dakota.smith@latimes.com

Twitter: @dakotacdsmith

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UPDATES:

8:15 p.m.: This article was updated with additional details.