By Jorge Casuso
September 5, 2025 -- In an unprecedented move, the City Council on Tuesday is expected to officially proclaim that Santa Monica's government is experiencing a "fiscal emergency."
While the proposed resolution does not "obligate the City to take any specific actions" or give the City Manager additional powers, it directs him "to take all necessary steps to address, alleviate, and mitigate this emergency."
The resolution notes that the City has not recovered from the coronavirus shutdown declared five and a half years ago and faces 180 sexual abuse claims after paying more than $229 million to settle 229 previous claims.
As a result, the City has been depleting its general fund reserves, which are currently at 61 percent of prepandemic levels, staff wrote in a report to the Council from Acting City Attorney Heidi Von Tongeln.
The "fiscal distress" is only expected to worsen, with the fiscal year budget adopted by the Council on June 24 already failing to meet its adjusted expenditures of $484.3 million and $473.5 million in expected revenue.
"The recent financial forecasts anticipate that the City will continue to operate a structural deficit for several years, and the City faces ongoing uncertainty that revenue projections may come in lower than expected," staff wrote.
The brief three-page resolution, which sheds no new light on the City's dire financial straits, comes less than one and a half months after City Manager Oliver Chi took over the City's top administrative post.
The resolution, staff said, "highlights these factors in identifying local fiscal distress in Santa Monica, and would further direct the City Manager to take all necessary steps to address, alleviate, and mitigate the current financial exigency that exists in the City.
"Of note, the attached Resolution would not obligate the City to take any specific actions to address the fiscal emergency, nor would it grant the City Manager powers that exceed those set forth in the City Charter and Municipal Code," staff wrote.
"Rather, the proposed resolution is intended to serve as a tool to help strengthen the City’s arguments and various applications for funding and / or fiscal relief when interfacing with various grant funding, regulatory, and other governmental entities."
