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Headlines Show How Santa Monica Overspent Its Way Into a Gaping Fiscal Hole Before Coronavirus Hit

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By Lookout Staff

April 30, 2020 -- As Santa Monica prepares to make the most radical cuts in staffing and services in its 145-year history, here are some of the headlines that help explain how it got into such a deep financial hole before the coronavirus pandemic struck.

In 2010, Santa Monica had about 90,000 residents -- a population that has held steady over the past 50 years -- and a budget of $553.6 million, $255.1 million of that in the general fund.

That year, City officials warned the City's budget deficit could reach $52 million by 2014 unless cuts were made ("City Faces Increasing Budget Shortfall," February 1, 2010).

Following are sample headlines that help explain what has happened since:

Council Passes $1 Billion Two-Year Budget; Shifts More Than $150 Million in RDA Money
June 27, 2011 –- The city council approved a scaled-back two-year budget for Santa Monica that still tops $1 billion, though its architects warned that forces beyond their control dictate caution and the figures may still change.

Santa Monica’s Billion Dollar Budget Reflects Sluggish Uptick
June 5, 2015 -- General fund revenues are projected to top $757 million over the next two years. Most of it will go toward employee compensation, including salaries, City pension contributions, healthcare benefits and workers compensation costs -- accounting for about 72 percent of General Fund spending.

Santa Monica Municipal Budget Among Highest Per Capita in California

November 15, 2016 -- The City of Santa Monica's $1.1 billion biennial budget was among the highest in the state and is driven by “unbelievably excessive employee compensation,” according to a researcher for Transparent California, a statewide watchdog group.

“The Wolf is Here,” Santa Monica City Manager Warns as Budget Woes Mount
May 25, 2017 -- With shortages in revenue set to double, Santa Monica City Manager Rick Cole on Tuesday warned “the wolf is here” as the City Council took its first dive into a record $1.57 billion biennial budget for the 2017-2019 fiscal year. Total spending for the first of the budget’s two years is $773.7 million, or 26 percent higher than this year’s budget.

City of Santa Monica Prepares to Bond Nearly $77 million for Greenest Building in California History
August 4, 2017 -- Tackling a project touted for its environmental features and blasted for its cost, the Santa Monica City Council next Tuesday will hold a public hearing on its plan to bond out almost $77 million for a new uber-green annex to its 1938 City Hall.

City of Santa Monica on Top List of Biggest Public Pensions in California
August 10, 2017 -- A total of 190 retirees of Santa Monica’s City government are receiving annual public pensions ranging from $100,000 to $250,000, a new analysis of 2016 public pension data statewide by a California watchdog group has found.

Pension Costs to Climb Almost 75 Percent at Santa Monica City Hall, Think Tank Estimates
January 29, 2018 -- Total pension costs at Santa Monica City Hall will climb almost 75 percent by the 2024-2025 fiscal year, as the City continues to shoulder a huge unfunded liability -- or pension obligations it failed to fully fund -- and ongoing annual payments, according to a new analysis by a Sacramento-based think tank.

City Officials Won't Reveal Cost of Voting Rights Lawsuit Until Case is Closed
March 5, 2019 -- Santa Monica taxpayers will have to wait until the voting rights lawsuit ends to learn what the City has spent fighting the nearly three-year-old case. Community activists have speculated in public meetings and on social media that the City's legal bill has reached $20 million.

Santa Monica Adopts $800 Million Plan to Fight Climate Change
May 29, 2019 -- Santa Monica Tuesday night embarked on an $800 million 10-year plan to fight climate change that is likely the most costly and ambitious initiative of its kind for a city its size in the nation.

Santa Monica Tops List of California Cities with Biggest Pensions
September 13, 2019 -- The City of Santa Monica this year will make separate payments to 28 retired employees whose pensions were so large they exceeded IRS limits, an analysis of pension data by The Lookout found. In fact, Santa Monica had more retirees whose pensions exceeded the federal limit than any other city in the state.

But the fiscal hole was being dug long before 2010. A Lookout series titled "A Bang for the Buck?" explored the City Council's spending practices in 2003. Below are links to the stories and the City's responses.

Great Expectations or Spending Spree?
A Tale of Two Cities: How Santa Monica and Pasadena Spend Their Money
LETTERS -- City Officials Respond: Apples and Oranges & Bad Math

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