By Jorge Casuso
September 15, 2025 -- An item on last week's City Council agenda expected to be quickly approved with no discussion generated national headlines before it was adopted with an emphasis on what it won't do.
The item -- which articulates the reasons Santa Monica is in "fiscal distress" -- does not reduce services, cut staffing, grant the City manager emergency powers or declare a fiscal emergency.
And it will have no impact on the City's top AAA credit grade from S&P Global Ratings and Fitch Ratings, said City Manager Oliver Chi, who placed the item on last Tuesday's Consent Calendar.
If the Council failed to adopt the item, which brought out worried members of the community, there would be "no negative consequences," Chi told the Council.
What the resolution does is "articulate and capture in one place all of the different challenges the City is facing from a financial situation," Chi said.
"No matter how much (staffing, police officers and resources) we have in the City, there's always going to be a need for more," the City manager said.
The resolution is a tool that can be used to help implement "a citywide game plan" scheduled to be presented to the Council next month that lays out ways to tackle Santa Monica's fiscal crisis by realigning City operations.
The resolution also will help the City work with State, Federal and regulatory agencies, such as the California Coastal Commission, and to seek grant funding.
"Every year," the City has been "scrounging" for money, said Chi, who took over the City Manager's post on July 14. "We can't operate an organization in that manner. There's no stability there."
The resolution was unanimously approved as the City faces declining revenues from sales taxes, transient occupancy (or bed) taxes and parking revenues, Chi said.
It has also paid out some $229 million to settle four rounds of child sexual abuse cases filed by 229 plaintiffs against a former City employee that date back decades.
The cases against Eric Uller, a volunteer with the Police activities League who took his life shortly after his arrest in 2018, have been depleting the City's reserves, with a fifth round of cases filed this year by 180 additional plaintiffs.
"We've gone from having $300 million to $400 million in cash (reserves), to having $150 million," Chi said, noting that $60 million had been set aside to balance the current budget.
Chi called the lawsuits "a massively important issue" the City has been trying to expeditiously address.
In a letter to the Council, community activist Nikki Kolhoff questioned the City's strategy of automatically settling all claims.
"To be clear, all victims should be compensated," Kolhoff wrote. "But we don't know who the victims are, and who is entitled to compensation, because the city has settled for lump sums, without question, the entire time.
"We are told that the city was advised the first batch of $34 million would resolve all claims based on the statute of limitations, so the city paid. That advice turned out to be incorrect, but instead of pushing back on future claims, the city keeps paying."
City officials note future payments could end if the State legislature approves Senate Bill 577, which reduces the statute of limitations for childhood sexual assault cases against public entities.
Tuesday's resolution, Chi said, lays out the City's efforts to settle the cases.
The Youth Law Center announced last Wednesday that the bill will not advance in the 2025 legislative session
Missing from the resolution in the ongoing voting rights lawsuit against the City that has been winding through the courts since June 2016.
As of November 6, 2023, the latest data available, the City had been billed $12,803,149 for legal fees by Gibson, Dunn & Crutcher, one of the most expensive law firms in the country.
The case -- which if the City loses would require Council district elections -- is now back where it started in Superior Court after working its way up to a State Appellate Court and the California Supreme Court.
