Santa Monica city leaders are being asked to declare a fiscal emergency due to the city’s ongoing budget crisis, according to a city agenda.
A staff report for Tuesday’s City Council agenda cites several challenges, including legal payouts related to a notorious alleged sexual abuser who worked for the city.
The city has paid out more than $229 million in settlements relating to sexual abuse by Eric Uller, a former Santa Monica police dispatcher. The city faces additional abuse claims from over 180 claimants, according to the report.
Uller worked with boys and girls at a police nonprofit’s after-school program. According to a 2018 report by the Los Angeles County Sheriff’s Department, several former Santa Monica city employees told detectives they reported Uller’s misconduct, The Times reported in 2023.
Services in Santa Monica are also suffering, according to the report. During the COVID-19 pandemic, city leaders slashed the city’s budget and eliminated hundreds of positions. City services haven’t been restored to pre-pandemic levels, and several capital projects remain unfunded.
Santa Monica’s recently approved budget for the 2025-2026 fiscal year expects expenditures of $484.3 million, but $473.5 million in revenue, the report states.
The report also cites recent and proposed changes by the federal government, including tariffs and mass deportations, that could affect the local and national economies.
Santa Monica public information manager Lauren Howland declined to comment on Tuesday’s agenda item.
It’s not clear why the city might make this declaration. In general, cities may declare an emergency to give them greater flexibility to take action.
At a March meeting to discuss the crisis, city leaders spoke in explicit and dire terms about the city’s future.
“I’m afraid that we’re careening towards bankruptcy, and I’m worried that we’re thinking a little small here,” said Councilmember Dan Hall, according to the Santa Monica Lookout. “Unless this council takes very bold action, we’re not going to cost correct.”
In April, Santa Monica ended negotiations with Olympics organizers to host beach volleyball during the 2028 Games.
A study released in October found that being a venue city would result in a net loss of $1.45 million for Santa Monica. Still, Santa Monica could see a $10-million profit from tourism generated by the Games.
Los Angeles is also struggling with rising legal payouts, a reduction in city services and higher expenditures due in part to employee raises.
