San Bernardino city council declares fiscal emergency
Published On : 7/20/2012 10:55 AM
From : KVCR
Categories : Local
It’s official: the San Bernardino City Council yesterday declared a fiscal emergency and voted to pursue bankruptcy.
In the week-and-a-half since the San Bernardino City Council was told it faces a 45-million dollar deficit, empty reserve accounts, and no way to meet next month’s city payroll, the city’s credit cards have been cancelled, vendors and bondholders have been demanding payment in cash, and a stream of city employees have resigned or retired to avoid possible layoffs.
The San Bernardino council waited until this week to officially approve pursuing chapter 9 bankruptcy while it looked into allegations that past city budget officials for years cooked the books to hide deficits, and raided restricted funds to pay monthly bills.
The San Bernardino council has also declared a city fiscal emergency, allowing it to bypass 60 days of negotiations with creditors and go straight to bankruptcy court.
Meanwhile, the Federal Department of Housing and Urban Development confirms that, as a result of the city’s fiscal uncertainties, it will conduct an audit of HUD block grant funds that have been distributed to San Bernardino in recent years.