Ad hoc Los Angeles committee flags soaring LAPD liability payouts, explores insurance and performance‑based budgeting

The Ad Hoc Budget and Finance Advisory Committee of the City of Los Angeles spent much of its Feb. 6 meeting reviewing a subcommittee report that says police department liability payouts have risen sharply and are straining city finances.

"LAPD right now has liability payouts that have surged, from $15,000,000 in 2020 to about $107,000,000 in 2025," said Derek Johnson, summarizing the subcommittee's findings and citing city controls office data and local reporting. Committee members said those payouts contributed to total city liability expenditures substantially above budgeted amounts.

Golden Batchelder, a UCLA fellow supporting the committee, presented year‑by‑year liability figures used by the subcommittee: fiscal 2024–25 $155.4 million; fiscal 2023–24 $104 million; fiscal 2022–23 $35 million. Batchelder added a per‑person comparison showing Los Angeles’ per‑resident liability spend is close to or slightly below peer cities when normalized for population.

Why it matters: committee members said escalating payouts force tradeoffs across city services. "These costs are currently extracted from the general fund," the subcommittee argued, leaving the general fund "starved" for flexible dollars, and prompting questions about how to hold departments more directly accountable for legal costs.

Policy options discussed included shifting liability payouts from the general fund to department budgets, exploring private insurance or alternative indemnity structures, adopting performance‑based budgeting that ties allocations to key indicators, unified accounts receivable systems to improve revenue collection and data analytics to flag officers with high litigation risk.

"We're actually looking at a few things — privatizing liability, performance‑based mechanisms, linking allocations to performance reviews for not just law enforcement but all departments," Derek Johnson said.

Committee members asked for more detailed breakdowns by liability type — wrongful convictions, misconduct, collisions and personnel litigation — and the subcommittee said it will submit supporting documentation and a breakdown of those categories.

The committee did not take formal action on policy changes at this meeting. Staff and the committee's fellows were directed to help corroborate the numbers, draft possible motion language for Council District 5 and identify follow‑up research needs ahead of the next meeting.