Santa Monica, once a bustling California beachside city known for its lively downtown and tourist-friendly vibe, is now grappling with a financial emergency.
The city recently declared “fiscal distress” after paying out a staggering $230 million to victims of a former police staffer accused of widespread sexual abuse.
This payout has pushed the city perilously close to bankruptcy.
City leaders say that years of financial missteps, pandemic-related slowdowns, and new tariffs have strained budgets, but the primary factor threatening the city’s survival is the fallout from the scandal involving former police dispatcher Eric Uller.
The Horrific Abuse That Shook the City
Court records reveal that Uller targeted children in predominantly Latino neighborhoods, often using either an unmarked police car or a personal SUV equipped with police gear to lure victims.
In addition, he spent decades volunteering at the Police Activities League (PAL), a nonprofit supporting underprivileged youth, where he allegedly abused dozens of children throughout the 1980s and 1990s.
Uller wasn’t arrested until 2018, and he tragically took his own life that same year while awaiting trial.
The case unleashed a wave of lawsuits against the city, alleging negligence and cover-ups, and the associated legal costs continue to drain Santa Monica’s finances.
City Leaders Speak Out on the Financial Burden
“The financial situation the city is dealing with is certainly serious,” City Manager Oliver Chi told the City Council on Tuesday.
Mayor Pro Tem Caroline Torosis added, “We are carrying the weight of more than $229 million in sexual abuse allegations.
We owe it to survivors to address this, but we also need to protect Santa Monica’s financial stability.”
In April 2023, the city agreed to a $230 million settlement for over 200 victims abused by Uller, one of the largest settlements of its kind.
Since then, the city has faced additional claims, with about 180 more cases pending.
Legal Battles and Insurance Struggles
Former Mayor Phil Brock noted that some lawyers pursuing claims have been “unscrupulous,” adding to the city’s challenges.
Although Santa Monica carries insurance, many settlements—ranging from $700,000 to nearly $1 million—have been paid out of the city’s own pocket due to policy deductibles.
The city has even filed lawsuits against some insurers to recoup a portion of these expenses.
The approved 2025-26 city budget projects $473.5 million in revenue, but expected expenses now total $484.3 million, leaving a notable shortfall.
Stories of the Victims
Victims reported that Uller groomed children by inviting them to play in his police vehicle, a process that gradually escalated into molestation and rape.
Some victims were as young as eight, with abuse continuing for years.
Michelle Cardiel, a former PAL staffer, told the Daily Mail in 2022 that she reported Uller to the program’s director in 1993 after a child complained of inappropriate behavior.
Instead of taking action, she said she faced threats of reprimand for “gossiping.”
Similarly, City Councilman Oscar de la Torre tried to expose Uller in the early 2000s but said no action was taken and alleged the council retaliated by defunding the youth center he helped manage.
Law Changes Spur New Wave of Claims
In 2019, California Assembly Bill 218 temporarily extended the statute of limitations for historic child sex abuse cases.
Victims could now file claims until age 40, or within five years of discovering the abuse.
Because most of Uller’s victims were under 40, this legislation triggered a surge of lawsuits against cities, counties, and school districts—including Santa Monica.
City officials are cautiously hopeful that new bills under consideration could limit claims under this law, providing some financial relief.
Declaring Fiscal Distress to Seek Support
While initially planning to declare a “fiscal emergency,” city officials opted instead for a “fiscal distress” designation to signal to state agencies and grantors the seriousness of Santa Monica’s situation.
“This resolution is a tool to institute a broader strategy,” city leaders explained, though details of the plan remain pending. A full strategy is expected in late October.
Chi emphasized, “No matter how many resources or officers we have, there will always be more needs than we can meet. Our goal now is to use what we have as effectively as possible.”
A City at a Crossroads
Santa Monica now finds itself at a critical juncture—balancing the urgent need to compensate survivors of horrific abuse with the equally pressing need to maintain financial stability for its residents.
How the city navigates this delicate balance in the coming months will shape its future for years to come.