HALF MOON BAY — City officials are still struggling to come to grips with what City Councilman John Muller called "the biggest crisis to hit Half Moon Bay in its history."

City Manager Marcia Raines said no decisions were made at Thursday's emergency council meeting, which was closed to the public because it dealt with litigation — the $37 million ruling handed down against the city Wednesday by a federal judge.

Raines said the council did not formally debate any strategies for dealing with the ruling, which could sap the city's finances for years, because Councilman Jim Grady was unable to attend.

The city will hold a second closed-door meeting at 6 p.m. Monday. The public will be able to speak out on the subject at the council's regularly scheduled meeting Tuesday at 7 p.m.

Muller said Thursday's meeting entailed some "laughing and crying" as council members discussed the ruling of U.S. District Court Judge Vaughn Walker, who found that the city damaged the property of developer Chop Keenan by creating wetlands that rendered his property unfit for development.

Before the meeting, which lasted two and a half hours, the council spent a half-hour listening to the concerns of 15 or so residents who showed up at City Hall, said Councilwoman Marina Fraser.

Fraser said she and her colleagues, like many residents, are worried about what the ruling means for the funding of city services, since the city's annual budget is only about $10 million.

If the city does not appeal Walker's ruling, it will have to pay Keenan's company for the land, a payment process that could require decades of installments, Fraser said.

"I would say a couple million dollars for 20 to 30 years, depending how long that takes to pay it off," Fraser said. "And that's money for important city services."

Fraser, who said she would prioritize health and safety in the event of budget cuts, said she's not going to spend time worrying about the decisions made by prior councils that prompted the city's legal fiasco.

"For me, the most important thing is moving forward at this point," Fraser said. "I can't get bogged down in what happened in the past."

Staff writer Aaron Kinney can be reached at 650-348-4302 or at akinney@bayareanewsgroup.com.