May 22, 2018 -- Santa Monica’s City government will require “tangible and likely painful” changes in the coming years as it shudders under $461 million in red ink for unfunded employee pensions and other costs continue to outpace revenue, a new fiscal update warns.

The report by City staff updates the 2017-2019 $1.57 biennial budget and begins looking ahead to its two-year successor, which is likely to face a deficit of about $7.1 million in the 2020-21 fiscal year and, as it now stands, a shortfall of $15.2 million the following fiscal year.

“Health insurance and workers’ compensation costs continue to be cost drivers, although the largest challenge is the significant rise in the cost of pensions,” said the report by the Finance Director Gigi Decavalles-Hughes, the Human Resources Director Donna Peters and Public Works Director Susan Cline.

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