The Santa Monica City Council is voting to declare a fiscal emergency at the next council meeting.
Councilmembers will be asked to approve the declaration at Tuesday’s meeting, and if the motion passes, it would give City Manager Oliver Chi the authority to “take all necessary steps to address, alleviate and mitigate the emergency,” according to Section 2 of the resolution to declare the fiscal emergency.
“The City Council declares that, as a result of the city’s current financial condition, uncertain revenues, and increasing costs and liabilities, the city is experiencing a fiscal emergency,” reads Section 1 of the resolution.
City officials further broke down the reasons for the fiscal emergency declaration, including impacts from the COVID-19 pandemic (reductions in revenue, budget and jobs) as well as financial struggles (challenges achieving revenue, expenditures and reserve funds coupled with uncertain financial forecasts) and the sexual assault case settlement payout involving former city employee Eric Uller (roughly $230 million to 229 alleged victims).
Other reasons for the declaration include federal economic and immigration policy shifts.
“The City Council has determined that 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 declaring a fiscal emergency,” officials concluded in the declaration.
It’s not just Santa Monica that’s struggling financially; in June, Los Angeles City Controller Kenneth Mejia announced that over 600 layoffs were “on the table” as the city prepared to declare a fiscal emergency due to massive liability payouts, overspending and revenue shortfalls.
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