By Jorge Casuso

March 10, 2025 -- With one member worried Santa Monica could be "careening towards bankruptcy," the City Council on Saturday floated both predictable and extraordinary ways to balance its upcoming budget.

The ideas included selling City properties, including the Fairview Branch library, and exploring a record $460 million bond to stop relying on depleted reserves to keep the General Fund in the black ("City Officials Considering Unprecedented Bond," March 6, 2025).

At the special meeting, the Council also established an Economic Development Ad Hoc Subcommittee and "moved to streamline the City’s strategic priorities to more intentionally focus on three core concepts," City officials said.

The priorities are "economic opportunity and growth," "clean streets and safe neighborhoods" and "affordable, livable and secure housing for all."

The Council also asked staff to craft a biennial budget for Fiscal Years 2025-27 that "curbs all discretionary expenditure growth" and "emphasizes a focus on added revenue generating opportunities."

These include eliminating the 90-minutes of free parking in Downtown parking structures, which would generate $8 million a year, and using code enforcement to pressure property owners into "activating" long vacant commercial buildings.

It also includes charging market rates for events at City facilities, as well as for film permits, and boosting digital advertising Downtown.

Assistant City Manager Susan Cline called Saturday's budget workshop "an important meeting at a critical time, we hope even a pivotal moment."

The City is "using all available funds to keep the lights on and the work moving forward," Cline said. "We've had to use funds from every source possible over the last five years."

This time, that won't be enough, warned Councilmember Dan Hall.

"I'm afraid that we're careening towards bankruptcy, and I'm worried that we're thinking a little small here," Hall said. "Unless this Council takes very bold action, we're not going to cost correct."

Deputy City Manager Christopher Smith, cautioned that the City was in its fifth year of "deferred maintenance," was using outdated equipment and was struggling to retain its workforce, which has 175 fewer positions than it did before the coronavirus shutdown in March 2020.

He noted this was taking place as action requests from residents have skyrocketed -- from around 10,000 requests before 2020 to 50,000 today -- due to the use of 311 calls, as well as deferred maintenance.

Smith also noted that staff's workload had also increased as Councilmembers place more and more discussion items on the agenda that require research.

The number of 16 Items has seen a "significant uptick," from 60 in 2018 to 119 in 2024, Smith said. So far this year, the newly seated Council has placed 41 discussion items on the agendas for the four meetings held this year.

"This is an important moment for alignment," Smith said. "The more we can put our (staff's) work into our budget, the better we're able to plan, prioritize and ultimately achieve" the Council's priorities.

Mayor Lana Negrete said it was time for City staff to return to the office after five year's of remote work.

"We have to buckle down. I see this as a business," said Negrete, who owns the Santa Monica Music Center. "We need to lead by example. That means coming to work within our own organization.

"I don't see how you build organizational culture without being face to face, which would allow staff to share the work and ideas."

Negrete also noted the move would help boost the local economy, which is struggling, by "bringing back foot traffic" to restaurants that are often empty or closed for breakfast and lunch.

Negrete also asked the City Attorney about the mounting legal costs incurred in the 8-year-old voting rights lawsuit that had cost the City some $14 million as of last November.

City Attorney Doug Sloan said the City would spend an estimated $6 million in the current and upcoming fiscal years fighting the lawsuit filed by Latino plaintiffs.

"I think that's an insane amount of money," Negrete said.

She noted that the money being spent could be used to fund Measure K, which voters approved by a three-fourths margin in November to enhance public safety and create safe routes to school using a tax hike on private parking lots.

One cost-cutting option floated by staff would move the funds to pay for shortfalls in existing programs, a move shot down by Councilmembers on Saturday.

Both Councilmembers Hall and Jesse Zwick pushed for selling City properties as a "last resort" to pump money into the Housing Fund, which has been used to help pay $230 million in sex abuse settlements.

"I think my municipal finance textbook bolded and underlined 'do not sell City owned land except in extreme circumstances,'" Hall said. "We are facing that."

Near the end of the budget discussion, Zwick suggested selling the Fairview Library that reopened in 2022 using a self-service model.

"I think we need to think about whether we are getting anything out of keeping that library open," said Zwick, noting the money could be used to restore programs at other branches.

Zwick suggested "shutting it down and disposing of the land."