LA WATCHDOG--On Wednesday, the City Council will most likely authorize Mayor Eric Garcetti and City Council President Herb Wesson to execute a legal agreement with the United States Olympic Committee that will require the City of Los Angeles to indemnify the USOC and the International Olympic Committee against any losses if LA is selected as the host city for the 2024 Summer Olympics.
The execution of this agreement is a mandatory requirement if our City is to represent the United States in its efforts to host the 2024 Summer Olympics.
At the same time, the City Council will vote to "create an Ad Hoc Committee on the 2024 Summer Olympics to oversee and coordinate the City's bid and participation in hosting the 2024 Summer Olympics." This committee will be chaired by City Council President Herb Wesson and will consist of six other members of the City Council.
Garcetti has indicated that the Games will cost $4.1 billion, not including a $400 million contingency fund, and will generate an operating profit of $150 million. But the media and the public do not have any financial information or supporting documentation to verify these projections. We have also not been privy to any details on the costs associated with the preparation of the venues for the Olympics, infrastructure improvements (including the Olympic Village to house the athletes), security, City services, and any other related expenditures.
To put this in the proper perspective, the costs for hosting the Boston Olympics were estimated to exceed $15 billion while revenues were expected to be less than $5 billion. This resulted in shortfall of over $10 billion.
If the City Council authorizes Garcetti and Wesson to execute the necessary documentation, it must be with the provision that the City Administrative Officer (with the assistance of a nationally recognized consultant) prepare a comprehensive report by Thanksgiving outlining all of the costs, revenues, and risks associated with the 2024 Olympics. This would include not only the operating expenses for the 17 day extravaganza, but expenditures for venues, infrastructure, security, City services, and other related expenditures.
The CAO's report must also address the City’s plan to eliminate the risk of cost overruns. This may include having the County and the State absorb a proportional share of the risk, the hiring of an experienced and well financed operator like AEG, reaching an agreement with the unions not to strike, and preventing the City Council from meddling in the operations of the Olympics.
The City may try to sequester information, asking us to rely on the judgment Mayor’s office and the City Council’s newly formed Ad Hoc Committee on the 2024 Summer Olympics. But trusting our City’s politicians who will be termed out when the bill comes due is not in the cards given City Hall’s demonstrated lack of respect for our wallets.
Only last week, City Hall short changed the taxpayers by almost $1 billion by entering into a phony baloney settlement with class action lawyers involving the City’s illegal collection of the 10% Telephone Users’ Tax. Two weeks ago, Wesson and Garcetti refused to disclose the budget busting terms of the City’s new labor contract with its civilian unions. And last month, City Hall, which is already fleecing DWP Ratepayers for over $1 billion a year, is contemplating a $200 million back door tax increase in connection with the five year, $1.4 billion increase in our water and power rates.
We all want Los Angeles and Southern California to host the 2024 Summer Olympics. But we cannot trust City Hall with our money, especially when it involves promises made today involving expenditures in the future. That is why the process involving hosting the Olympics needs to be open and transparent so that we can be sure that the risk of our cash strapped City absorbing cost overruns is eliminated. We do not want to have a multiyear financial hangover.
(Jack Humphreville writes LA Watchdog for CityWatch. He is the President of the DWP Advocacy Committee and a member of the Greater Wilshire Neighborhood Council. Humphreville is the publisher of the Recycler Classifieds -- www.recycler.com. He can be reached at: [email protected])
-cw
CityWatch
Vol 13 Issue 69
Pub: Aug 25, 2015
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