San Bernardino about to seek bankruptcy protection

Published On : 7/11/2012 3:04 PM
From : KVCR
Categories : Local

San Bernardino is about to become the third California city to seek bankruptcy protection. Last night’s unexpected vote by the San Bernardino City Council to go into Chapter 9 bankruptcy came after interim city manager Andrea Travis-Miller and new city finance director Jason Simpson told the council that the budget that went into effect less than two weeks ago is already projected to rack up a 45-million dollar deficit.

The city’s reserve funds are depleted, and San Bernardino faces an immediate cash flow crisis… even if the council were to eliminate everything but the police department. The city has already cut its workforce 20 percent, and has extracted 10-million dollars in employee concessions.

Weeks before the extent of the crisis became evident, San Bernardino Mayor Patrick Morris told KVCR that two factors have helped push the city toward the brink: employee union contracts and pension liabilities, and the loss of redevelopment funds to help balance the state budget:

“We are an old city, and therefore we have an old structure. What does that men, that means we’ve got embedded, strong unions, public unions that have often and still do carry the day politically. They’re deeply involved in the politics of this place, and so they basically elect city councilmen to do their bidding. That’s a problem for us. They’re [the city council] supposed to, by definition, respond to the needs of the voters. What they often respond to, in my experience, has been the needs of the unions.”

Last night’s council vote gives City Attorney James Penman power to begin proceedings for Chapter 9 bankruptcy, which would allow renegotiation of some union contracts, free the city of much of its debt, and maintain the mayor and council as the decision-makers in upcoming budget cuts.

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