I'm very surprised the LOC is responsible for prize money. Could you imagine if host cities had to provide prize money to the Super Bowl winner? Any prize money should be paid by sponsors that have Olympic qualification bonus clauses in their contracts or the future bonus you will get by qualifying and running in the Olympics. No need for the LOC to also provide a bonus.
The whole process is just dumb. The only reason any LOC should even consider hosting the trials is a money making investment. Just like hosting the Super Bowl it is a net win for any city. There are costs but they are more than offset but the economic impact. Does anyone do an economic impact analysis of these trials? I think they should be run along side mass participation events. Start the trials and then after 30 minutes start the mass participation event. That would greatly improve the economic impact of these events.