In light of the continuous decline in municipal revenue and the increasing amounts of sexual assault compensations, the coastal city of Santa Monica in Southern California is set to decide on Tuesday (9th) whether to declare a state of financial emergency.
According to a staff report by interim city attorney Heidi Von Tongeln, the City Council will consider a resolution to declare a financial emergency, enabling the city manager to take actions to address this crisis. The Santa Monica Daily Press also reported that the City Council will vote on this matter during the meeting on the 9th.
Santa Monica is located approximately 20 miles west of Los Angeles and is facing multiple challenges, including a growing homeless population, recent closures of businesses, and an increase in violent crime, especially in the downtown Third Street Promenade area.
In May of this year, the city government took measures to revitalize the city by creating an “entertainment zone” in the downtown area to attract residents and tourists for shopping, dining, and drinking locally. The new plan allows people to drink alcohol outdoors in plastic cups.
However, John Alle, co-founder of the Santa Monica Coalition, told Epoch Times after surveying residents that 86% of those interviewed do not go to restaurants or shops because they feel walking or parking on the streets is not safe.
According to Von Tongeln’s report, the city government has been facing financial issues since the COVID-19 pandemic.
Governor Newsom issued a stay-at-home order in March 2020, requiring the closure of non-essential businesses, churches, parks, playgrounds, and beaches. Face-to-face classes in most public schools were also suspended, with restrictions lasting for nearly a year.
As a result, Santa Monica has been heavily impacted. The city’s revenue for the 2020-2021 fiscal year decreased by 27%, leading to budget cuts of around 24% and the elimination of nearly 300 permanent positions and over 120 temporary positions.
Von Tongeln wrote in the report, “The latest financial forecasts indicate that the city government will continue to have structural deficits in the coming years, and ongoing uncertainties mean that revenues may fall short of expectations.”
The report pointed out that municipal services have not returned to pre-pandemic levels, and many infrastructure projects are still lacking funding support.
The city has also passed an annual budget exceeding revenue by $10.8 million (starting from July 1 of this fiscal year). With expenditures likely to increase further, the city’s income prospects are even more uncertain.
According to city officials, the city has paid over $229 million to a former city employee as settlement, who claimed to have been sexually assaulted two to three decades ago. These settlement funds primarily come from reserves of the general fund and borrowing exceeding $52 million from various city funds.
The report indicated that this occurred after California revised its laws in 2019, effectively removing statutes of limitations on sexual assault cases.
Santa Monica is also facing over 180 sexual assault lawsuits (by the same city employee), seeking compensation in the millions of dollars. The employees’ report stated that these compensations will be paid either in a lump sum during court judgments or settlements.
The decline in revenue caused by the COVID-19 pandemic and the expenditures on court settlements have brought Santa Monica’s general fund reserve down to 61% of its level before the pandemic.