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Santa Monica Declares Fiscal Distress, Not Emergency, After Unanimous Council Vote

Officials say the designation positions the city to pursue outside funding.

LOS ANGELES, CA – JULY 29: Santa Monica City Hall on July 29, 2016 in Los Angeles, California. (Photo by FG/Bauer-Griffin/GC Images)
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Overview

  • The City Council approved the fiscal distress resolution Tuesday to formalize the city’s financial challenges without triggering a fiscal emergency.
  • Alongside the vote, the council adopted the 2025–26 budget at $793.3 million in total, with adjusted expenditures of $484.3 million against $473.5 million in expected revenue.
  • City forecasts project continuing deficits for several years as leaders work to stabilize finances.
  • Santa Monica has paid more than $229 million to settle sexual-abuse claims tied to former employee Eric Uller, with nearly 200 additional claimants pending.
  • Settlement costs have been covered largely by general fund reserves and more than $52 million in interfund borrowing, following a 26.8% revenue drop in 2020–21 that led to roughly 24% spending cuts and over 400 job eliminations.