Santa Monica officials on Tuesday declared the city in "fiscal distress," saying a $230 million settlement and continuing litigation tied to historic sexual-abuse claims against a former police dispatcher have created an acute budget crisis.
City leaders said the settlement and subsequent payouts to more than 200 alleged victims of former dispatcher Eric Uller are the primary drivers of a fiscal shortfall that they said threatens core services and the city’s long-term financial stability.
The city agreed in April 2023 to pay roughly $230 million to settle claims from dozens of people who say they were sexually abused as children by Uller, who volunteered with the Police Activities League (PAL) in the 1980s and 1990s. Uller was arrested in 2018 and died by suicide while awaiting trial. Since the settlement, officials said, Santa Monica has engaged in four rounds of settlement talks and now faces roughly 180 additional claims.
"We are carrying the weight of more than $229 million in sexual abuse allegations," Mayor Pro Tem Caroline Torosis said at the council meeting. "We owe it to survivors to properly address this, but we owe it to Santa Monicans to protect our city's financial stability."
City Manager Oliver Chi told the council the designation of "fiscal distress" is intended to clarify Santa Monica’s financial condition to outside agencies and to support requests for grants and other aid. He said the city’s approved 2025-26 budget projects $473.5 million in revenue against expected costs of $484.3 million.
The litigation has produced settlements ranging from about $700,000 to just under $1 million, officials said. Although the city has insurance, many payouts have been charged to the city because of policy deductibles and coverage disputes; Santa Monica has sued some insurers to recover portions of those costs.
Victims and court filings allege Uller groomed children in predominantly Latino neighborhoods, invited children into a vehicle he used while on duty or in a privately owned SUV equipped with police gear, and abused youngsters he encountered through PAL. Some alleged victims say they were as young as eight and were abused for years. A former PAL staffer told news outlets she reported concerns about Uller in 1993 and was rebuffed.
The claims surged in part because of a 2019 California law, Assembly Bill 218, which temporarily extended the statute of limitations for historical child-sex-abuse claims. The law allowed victims to file until age 40 or within five years of discovering the abuse, prompting renewed lawsuits against school districts, counties and cities across California.
Former Mayor Phil Brock and other officials said the litigation has attracted aggressive contingency-fee attorneys, raising settlement costs. City officials also cited pandemic-era revenue drops, new tariffs and what they described as prior years of unnecessary spending as additional pressure on the municipal budget, but emphasized the Uller-related claims as the most significant single factor.
Santa Monica has said it will present a financial plan to the City Council in late October. Chi said aspects of the city’s options could include pursuing additional insurance recoveries, negotiating payment plans with claimants, applying for state or federal assistance and identifying operational efficiencies, though he did not lay out a detailed strategy at the Tuesday meeting.
Councilman Oscar de la Torre and other local figures have described earlier efforts to raise concerns about Uller, saying those complaints were not adequately addressed at the time. The city faces both civil litigation and continuing political scrutiny over whether officials and institutions failed to act decades ago.
City leaders said they will continue to prioritize support for survivors while seeking ways to shore up municipal finances. "There is no doubt that the financial circumstances facing the city are serious," a city statement read, noting the fiscal-distress designation is one tool staff identified to coordinate a broader response.
A formal declaration of fiscal distress does not automatically trigger state intervention, but it signals to regional and state entities that Santa Monica is seeking additional help and may qualify for assistance or altered oversight as officials weigh next steps.
The council scheduled follow-up sessions as the city develops its plan, with officials saying they intend to balance obligations to survivors with efforts to maintain public services and protect the city's fiscal health.