“Careening Towards Bankruptcy”: Santa Monica To Declare Fiscal Emergency After Massive Sexual Abuse Settlements

Santa Monica, the liberal coastal enclave in Southern California, is poised to declare a “fiscal emergency” as its financial troubles mount, according to a report by The Los Angeles Times.

The city’s budget has been strained by a staggering $229 million in settlements related to sexual abuse claims against former police dispatcher Eric Uller, with an additional 180 claimants still seeking compensation. Uller was accused of sexually abusing over 200 children, primarily underprivileged Latino boys, from the 1980s to early 2000s. Arrested in 2018, Uller committed suicide before his trial.
The Los Angeles Times reports:

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, according to the Times.

City officials have largely avoided comment ahead of a critical meeting, but agenda notes reveal that concerns about Santa Monica’s precarious finances have been escalating since March.

“I’m afraid that we’re careening towards bankruptcy, and I’m worried that we’re thinking a little small here,” Councilmember Dan Hall warned at the time. “Unless this council takes very bold action, we’re not going to cost-correct.”

The severity of the crisis has already forced Santa Monica to abandon plans to host beach volleyball events for the 2028 Olympics, underscoring the depth of the city’s financial distress.

A study released in October concluded that hosting the 2028 Olympics as a venue city would result in a net financial loss of $1.45 million for Santa Monica, further complicating the city’s strained budget, the Times said.

If approved, the financial emergency would authorize Santa Monica City Manager Oliver Chi to “take all necessary steps to address, alleviate, and mitigate this emergency,” according to the proposed measure.

The average household income in Santa Monica stood at $176,289 in 2023. In the 2020 Presidential Election, Los Angeles County, which includes Santa Monica, voted approximately 71% for Joe Biden compared to 26% for Donald Trump.