By Jorge Casuso

March 6, 2025 -- Santa Monica officials are exploring an unprecedented $460 million bond measure to pay for capital projects traditionally funded by ongoing City revenues.

The bond, which would mark a radical departure for Santa Monica, would bankroll a long-list of projects in a proposed General Fund Budget kept afloat by drawing an estimated $60 million from already depleted reserves ("City Must Use Savings to Stay Afloat," March 3, 2025).

The General Obligation Bond, included in the staff report for Saturday's Special City Council meeting, "would provide the necessary funding for long-term investments in transportation, public safety, parks, sustainability initiatives, and other key projects," staff wrote.

Such projects are part of a General Fund budget that is significantly funded with business-related tax revenues that have fallen below the City's projections.

The bond -- which requires a two-thirds vote -- would generate the revenues by taxing Santa Monica property owners, likely making it the largest bond in the City's 150-year history.

"The magnitude of this bond represents a turning point," said Marc Verville, the Chair of the City's Audit Subcommittee.

"The traditional model to subsidize resident services and investments is no longer able to keep pace with the City's requirements and inflation."

The Finance Department's five-year forecast shows that General Fund expenditures will "significantly exceed revenues" over the next three fiscal years, even with the use of new business license and parking facility taxes, said Finance Director Oscar Santiago.

A decrease in consumer spending -- including on cars, restaurants and hotels -- has prompted finance officials to revise the revenue projections made last May by an annual average decrease of approximately -7.2 percent, according to the staff report.

The City's "precarious financial situation" is driven by "economic factors and organizational challenges" that include inflation, a "lag in international and business travel" and the shift to "hybrid work."

It also is driven by "unresolved legal liabilities of unknown magnitude," that include $230 million in settlements to 236 plaintiffs in child sex abuse cases, with another 153 new claims recently filed.

The City also is fighting an eight-year-old voting rights lawsuit filed by Latino plaintiffs that will hike a legal bill that had reached $14 million last November.

The City's attitude towards its business sector also isn't helping, Verville said. "The struggling business environment reflects a lack of dedication and focus on improving the commercial sector," he said.

"Instead, the City is using this (economic) decline to tear down revenue supporting business infrastructure," such as public parking garages and lots to develop affordable housing that doesn't bring in revenues ("Council Sets Aside 3 Affordable Housing Sites," March 3, 2025).

If approved, the bond would pay for 75 unfunded capital projects totaling $459 million that have not been prioritized and include $41.3 million to maintain and retrofit parking facilities and $204 million for parks, according to staff.

If the Council directs staff to explore the bond, staff will work over the next six months "with a polling consultant, engage stakeholders, and perform public outreach."

Staff also will conduct a preliminary poll "to determine public appetite and interest and feasibility of a 2/3 vote for a General Obligation Bond."

"If polling shows favorably and the polling consultant sees interest exceeding the 2/3 voter requirement, staff would recommend a proposed bond measure sometime early 2026 to mid-2026, for inclusion on the 2026 ballot," staff wrote.

The Special Council Meeting will take place at 9 a.m. Saturday in the Main Library, Multi-Purpose Room, 601 Santa Monica Boulevard.