Photo by John Schreiber.
Photo by John Schreiber.

The nonprofit committee competing to bring the 2024 Summer Olympics and Paralympics to Los Angeles will pay for the city to hire an outside expert to study the financial impacts of hosting the games, under an agreement approved Friday by the City Council.

The council voted 11-0 to sign an agreement with the Los Angeles 2024 Exploratory Committee, or LA24, that sets ground rules for the city’s role in the formal bidding process to bring the Olympics to Los Angeles.

The agreement between the city and the bid committee, a privately run nonprofit, precedes larger conversations and decisions around the costs for staging the Olympics and the likelihood that city funds would be used.

The City Council and the mayor will be asked to back a “host city contract,” which is needed for the Olympics to move forward in Los Angeles, in the coming months. The contract could include a provision that the city would be on the hook to pay for additional costs if the Olympics goes over budget and insurance is unable to cover those costs.

Along those lines, the agreement calls for LA24 to pay for the city’s cost in hiring an “academic institution or a nationally recognized accounting firm” to scrutinize the revenue and expenditure projections in LA24’s operating budget for the Games.

The process for selecting the financial expert is still being worked out and will be subject to city leaders’ approval, Assistant City Administrative Officer Ben Ceja told the Ad Hoc Committee on the 2024 Summer Olympics, which approved the agreement before it went before the full council.

A competitive bidding process for selecting the expert will be used, Ceja told City News Service.

The financial study should be completed by September, prior to votes on “key guarantees and the host city contract,” according to a city report.

LA24 is also getting ready to submit its first “candidature package” — which focuses on concept and strategy for the Games — to the International Olympic Committee in February.

LA24’s attorney Brian Nelson told the ad hoc panel that the hope is to present a final list of Olympic Village site options to the city prior to the Feb. 17 deadline for submitting the first application package.

Initial LA24 plans were to put the Olympic Village next to the Los Angeles River, in a Lincoln Heights railyard known as “Piggyback Yard.”

City advisers warned last year in a preliminary review of an earlier Olympics budget that the site “may significantly exceed the projected $1 billion,” with more than half of the budget possibly going toward just remediation and relocation costs.

The agreement approved today includes setting ground rules for how the city and LA24 would work together in preparing “candidature files and guarantees required by the IOC,” according to Cielo Castro, an aide to City Administrative Officer Miguel Santana.

The mayor and the City Council would have a say in whether city funds will be used on the bidding process under the agreement terms, which state that LA24 “may not legally obligate the city to expend funds related to the IOC Candidature without first obtaining approval of both the mayor and the council.”

The agreement also notes that LA24 does not expect the city will be asked to expend funds on the bid process.

Costs incurred during this time will mostly be for payments required as part of the three candidature packages that LA24 must make to the IOC. The costs total about $250,000 and are expected be covered by LA24, city officials said.

The agreement also sets the stage for efforts to lobby the federal government to designate the proposed 2024 Olympic Games in Los Angeles as a “National Special Security Event.”

That designation would allow the U.S. Secret Service, under the Secretary of Homeland Security, to manage security operations for the event, with the federal government covering the bulk of security costs — expected to be among the larger expenses of hosting the Olympics.

The “National Special Security Event” designation has been given to other Olympic Games hosted in the United States and is also used for presidential inaugurations and the Republican and Democratic national conventions.

The agreement states that the city will “cooperate in good faith to seek assurances from the U.S. government” that security for the 2024 Games will be given the designation, and as a result be the responsibility of the federal government.

City officials say the agreement — which only covers the bid period and expires either when the International Olympic Committee chooses a host city or on Dec. 15, 2017 — is aimed at protecting city funds, giving city leaders more control over any issues affecting the city and increasing transparency during the two-year bidding process.

The agreement does not cover issues related to the planning and construction period for hosting the games, nor does it apply to the actual staging of the Olympics.

While the city has already signed a “joinder” contract to express support for efforts to bring the Olympics to Los Angeles, this latest agreement was necessary to make clear the city’s involvement in LA24’s bid efforts, city officials said.

“I believe that this MOU does make the city an equal partner … in the sense that it doesn’t go forward without the city,” Chief Legislative Analyst Sharon Tso told the ad hoc committee.

“Your approval will be required on all of the key agreements that LA24 has committed to, not only working with the city staff, but also going out to the community and getting their input. That is also part of being an equal partner, as well,” Tso said.

City officials said community meetings are being planned for each of the city’s 15 council districts to give the public a chance to weigh in on Los Angeles’ Olympics bid effort.

— Staff and wire reports

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