Santa Monica City Council
September 9, 2025

Resolution Identifying
Local Fiscal Distress
September 9, 2025
Item 4-S
September 9, 2025
Item 4-S
September 9, 2025
Why Outline the Local Fiscal Distress?
• Raise awareness regarding the City’s financial condition • Strengthen arguments for:
• Regulatory relief to assist with revenue generation
• Limitations on ongoing and future potential liabilities • Pursuing grants and other funding opportunities
• The resolution developed:
• Sets forth the details of the City’s current financial condition in one document; and
• Helps institute a broader strategy intended to achieve ongoing fiscal stability moving ahead
Item 4-S
September 9, 2025
Item 4-S
September 9, 2025
What Are The Primary Causes of Local
Fiscal Distress?
Decreased Revenue • The COVID-19 pandemic resulted in a sudden 26.8% decline in revenue • The Federal government has discussed or implemented several economic policies which may impact the national and local economy, inflationary environment • Recent financial forecasts appear to project continue decreases in sales tax, TOT, and parking revenues • Without further action, the City will continue to unsustainably operate with a structural deficit Increased Liabilities • The City has paid over $229 million in settlements relating to alleged sexual abuse purportedly committed 20 to 30 years ago by a former City employee • Currently, the City faces 180 additional abuse claims Item 4-S
September 9, 2025
Item 4-S
September 9, 2025
A Few Key Considerations
Adopting the resolution outlining details related to the City’s fiscal distress. . .
• Does not reduce City services or cut staffing…
• Does not grant the City Manager any emergency powers… • Does not declare a fiscal emergency as defined by the State Government Code…
Item 4-S
September 9, 2025
Item 4-S
September 9, 2025
What Happens Next?
• The City is working to develop both a budgetary
stabilization and overall City realignment plan, which we will present for review in late October
• While the financial challenges facing Santa Monica are real, staff is confident that the strategy being developed will help achieve stability
Item 4-S
September 9, 2025
Item 4-S
September 9, 2025