Santa Monica, California, is preparing to declare a fiscal emergency following a devastating financial blow tied to a series of sexual abuse settlements totaling over $229 million. The payouts stem from decades-old allegations involving former city employee Eric Uller, whose actions and the city’s handling of them have pushed one of the nation’s wealthiest coastal cities to the brink of insolvency.
The abuse claims center on Uller’s alleged misconduct between the late 1980s and early 2000s while he was employed by the city and volunteering with the Police Activities League, a city-run nonprofit targeting youth outreach. Uller committed suicide in 2018 before facing trial. In April 2023, the city reached a massive settlement agreement of $122.5 million with 124 victims, pushing total payouts to nearly $230 million. This financial burden has drastically depleted Santa Monica’s reserves and raised alarms over the city’s long-term fiscal health.
City services are already stretched. During the COVID-19 pandemic, officials slashed budgets and eliminated hundreds of public positions. Since then, essential services have not fully recovered. Capital improvement projects remain unfunded, and efforts to reinstate previous service levels have stalled due to fiscal constraints. The emergency declaration would not impose immediate cuts but could enable access to new funding sources or legal leeway in managing the city’s budget.
The city’s economic troubles are compounded by a sharp decline in retail and commercial tax revenue. Santa Monica Place mall recently defaulted on its mortgage, major retailers like Nordstrom have exited, and the once-thriving Third Street Promenade now suffers a 25 percent vacancy rate. This decline in commercial activity threatens a further drop in property tax income, deepening the financial hole.
Santa Monica, often criticized for its progressive spending priorities on climate initiatives, criminal justice reform, and resisting federal immigration enforcement, has redirected significant public resources away from core infrastructure and public safety. Though not officially a sanctuary city, its policy direction has mirrored those that deprioritize immigration enforcement and traditional law-and-order governance.
In light of these ongoing challenges, the city council will consider formalizing the fiscal emergency in the coming days. While largely symbolic, the move reflects the dire reality of a city overwhelmed by legal costs, declining revenue, and financial mismanagement driven by political priorities.
