City Council
Report
City Council Meeting: January 27, 2026
Agenda Item: 10.A
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To: Mayor and City Council
From: Heidi Von Tongeln, Interim City Attorney, City Attorney's Office, Administration
Subject: Introduction and First Reading of an Ordinance to Amend Santa Monica Municipal Code Chapter 4.66 to Provide for Recall of Workers at Hotels on City-Owned Property and Hospitality Businesses on the Santa Monica Pier and Adding Chapter 4.69 to Provide for Retention of Workers at Hospitality Businesses on the Santa Monica Pier
Recommended Action
Staff recommends that the City Council:
1. Adopt a finding of no possibility of significant effect pursuant to Sections 15061(b)(3) (Common Sense Exemption) of the California Environmental Quality Act (CEQA) Guidelines; and
2. Introduce for First Reading the proposed Ordinance amending Santa Monica Municipal Code Chapter 4.66 to provide for recall of workers at hotels on Cityowned property and hospitality businesses on the Santa Monica Pier and adding Chapter 4.69 to provide for retention of workers at hospitality businesses on the Santa Monica Pier.
Executive Summary
On July 8, 2025, the City Council – at the request of Mayor Torosis, Mayor Pro Tem Zwick, and Councilmember Raskin – gave direction that staff develop and return with right to recall and labor peace ordinances for full City Council consideration.
Consistent with that direction, the City Attorney’s Office has consulted with the City Manager’s Office and the council sponsors of the item. Through that assessment process, we identified a preference to prioritize ordinances related to the Recall of Workers and Retention of Workers at this time. Accordingly, this report has been 2 of 6
prepared for the City Council to consider a proposed Ordinance which aims to do the following:
1) Amend Santa Monica Municipal Code Chapter 4.66, Recall of Workers, to provide for recall of laid-off hotel workers on City-owned property and hospitality workers on the Pier; and
2) Add Santa Monica Municipal Code Chapter 4.69, Retention of Workers, to provide for retention of hospitality workers at the Pier for a period of 90 days after a change in control of the business.
Discussion
The City of Santa Monica, host to millions of visitors annually, has a long history of supporting its tourism and hospitality industries, as well as supporting the wellbeing and rights of workers in those establishments.
For example, on December 11, 2001, in response to the terrorist attacks on September 11, 2001, which exacerbated already declining economic conditions, the City Council adopted Ordinance Number 2031 (CCS), adding Chapter 4.66, Recall of Workers, to the Santa Monica Municipal Code, which created requirements for the recall from the layoff of workers of businesses located in the Coastal Zone and extended Downtown Core that had gross receipts of $5 million for that location in the year 2000.
Further, on September 10, 2019, the City Council adopted Ordinance Number 2614 (CCS), adding Santa Monica Municipal Code Chapter 4.67, Hotel Worker Protections, which, among other things, provides retention protections for hotel workers in the event of a change of hotel ownership or control.
In recent years, the City’s financial and economic outlook has changed dramatically.
The COVID-19 pandemic resulted in a sudden 26.8% decline in General Fund revenue in FY 2020-21. The City has faced challenges achieving its revenue, expenditures, and General Fund reserve targets during the past several years. The recent financial forecasts anticipate that the City will continue to operate a structural deficit for the next two years.
In addition, the federal government has discussed or implemented several economic policies, including tariffs, mass deportations, tax cuts, and deregulation, which may 3 of 6
impact the national and local economy. Some economists predict that the national economy will continue to be an inflationary economic environment with rising costs of goods and labor.
Against the backdrop of this economic setting, on September 9, 2025, the City Council adopted Resolution Number 11698 (CCS), identifying local fiscal distress due to the current financial condition of the City, including the significant drawdown of reserves and interfund payment obligations, coupled with uncertain revenues and increasing costs and liabilities warrants.
After identifying local fiscal distress, the City quickly identified opportunity on the horizon. On October 28, 2025, the City Council adopted the Santa Monica Realignment Plan, predicated around restoring safety, revitalizing key civic spaces, growing economic activity, rebuilding City organizational strength, and returning the City to fiscal balance. And, over the next several years, the Los Angeles region will become a global stage for some of the world’s most watched sporting and cultural events, which will draw millions of visitors, concentrate international media attention, and generate significant economic activity across Southern California.
On December 16, 2025, the City Council discussed the City’s participation in these upcoming events, beginning with activities on the Pier to support the FIFA World Cup in June and July 2026; a collaboration to produce a new music and cultural festival series on Santa Monica beach in the Fall of 2026; a week of fan-focused programming and broadcast activity on the Pier as part of Super Bowl LXI, which is scheduled to return to SoFi Stadium in February 2027; and summer 2028, when the Olympic and Paralympic Games will bring global audiences, cultural festivals, and hospitality activations to venues throughout the region.
Although there is reason for optimism as the City implements the Realignment Plan and prepares for upcoming major events, forecasts for the local and national economy threaten hospitality and tourism businesses, which could lead to layoffs. And changes in ownership, control, or operation of hospitality businesses on the Pier can trigger mass layoffs and displace employees who are skilled, knowledgeable, and experienced in providing a safe, clean and enjoyable experience for the millions of visitors who come to the Pier each year.
The proposed Ordinance was developed to advance worker protections while furthering the City’s economic recovery efforts. The Realignment Plan’s goals are furthered by 4 of 6
protecting the City’s investments in hotels located on City-owned land and hospitality businesses located on the Santa Monica Pier. The success of the upcoming major events is strengthened with a stable workforce to support local businesses.
What the Proposed Ordinance Will Do
If approved, the proposed Ordinance will amend Chapter 4.66, Recall of Workers to:
• Require the operators of hotels on City-owned property and hospitality businesses on the Pier with five or more workers to offer positions that become available after the effective date of the Ordinance to laid off workers who:
o Performed at least two hours of work within the geographical boundaries of the City for an employer in a particular week;
o Were employed by an employer for six months or more; and o Had a separation date after September 9, 2025, that was due to lack of business, a reduction in force or other economic, non-disciplinary reason. • Offers are required to be made in writing, and workers shall be given no less than 10 days in which to accept or decline the offer.
• The current provisions for recall of workers from layoff from businesses located in the Coastal Zone and extended Downtown core that had gross receipts of $5 million for that location in the year 2000 remain unchanged.
The proposed Ordinance will also add Chapter 4.69, Retention of Workers, which will:
• Require the retention of workers at hospitality businesses on the Pier with 5 or more workers for a period of 90 days after a change in control of the business; and
• Provide for noticing to workers of the change in control, that offers of employment be made in writing, and that workers shall receive a performance evaluation after the 90-day retention period.
Additionally, the Ordinance:
• Exempts nonprofit businesses;
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• Excludes managerial, supervisory, or confidential employees; • Allows for supersession by a bona fide collective bargaining agreement; • Prohibits retaliatory actions by employers against workers who seek to exercise or enforce their rights under the Ordinance; and
• Provides for remedies, including enforcement through a civil action or injunction, with possible damages for violations and recovery for attorney’s fees in enforcement actions.
Given that tourism is one of the largest industries in the City and in the entire region, establishing the worker recall and retention standards in the proposed Ordinance were crafted in an attempt to improve worker working conditions while also providing benefits to the local and regional economy overall.
Environmental Review
The action taken by the City Council is exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) (Common Sense Exemption) of the CEQA Guidelines, which states that CEQA does not apply, “where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment”. The measures are administrative in nature in that they provide for worker protections through requiring recall and retention of certain workers on City-owned property. Therefore, it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.
Fiscal Impacts
None.
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Prepared By: Heidi Von Tongeln, Interim City Attorney
Approved Forwarded to Council
Attachments:
A. Amendments to Chapter 4.66 (Worker Recall and Retention) B. Written Comments
C. PowerPoint Presentation