The San Bernardino City Council, pictured, met on Monday but postponed a declaration of fiscal emergency that would speed its planned bankruptcy filing. The matter is set to be back before the council Wednesday night.
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San Bernardino Employees Worry About Next Paycheck
Sam Macias says in 33 years of working for San Bernardino driving a trash truck, he has never seen the city in such fiscal turmoil. "I thought about retiring in a couple years but it may not last that long, you know what I mean," Macias says. Craig Fiegener reports from San Bernardino for the NBC4 News at 5 p.m. on July 17, 2012.
San Bernardino Residents Plead With Council Not to Declare Fiscal Emergency
San Bernardino resident Cori Lopez says her city’s fiscal crisis is “shameful and ridiculous” and called for the community to become civilly engaged. Lopez was one of many residents who asked the council not to declare a fiscal emergency during a meeting on Monday, July 16. The San Bernardino City Council voted to file for federal bankruptcy protection on Tuesday, July 10, in the face of a $45-million budget deficit. The council decided to postpone deciding whether they should declare a fiscal emergency. Craig Fiegener reports from San Bernardino for the NBC4 News at 6 p.m. on July 16, 2012.
The San Bernardino City Council on Wednesday night declared a fiscal emergency, effectively allowing the city to expedite its bankruptcy filing.
Wednesday night's action would allow the city to make a case it should be exempt from state law requiring municipalities to wait 60 days and negotiate with creditors and employees before declaring bankruptcy.
Councilmembers voted 5-2 to authorize both a fiscal emergency and bankruptcy, which the city has 30 days to file.
The vote came after a decision on the same issues was postponed during a Monday meeting at which speakers from the 213,000-resident city pleaded with council members not to declare fiscal emergency.
At that meeting, the city's finance director reportedly said there had been no sign to the council of internal borrowing that had caused problems in earlier budget years.
Finance Director Jason Simpson told the council that the city borrowed money from restricted funds to meet payroll and other expenses, and then the restricted funds were replenished. Eventually, the city ran out of money to keep doing that.
The borrowing practice, which Simpson admitted was unusual, had not been disclosed to the council, city officials said, according to the San Bernardino Sun.
City Attorney James Penman had previously said 13 of 16 years of budget documents had been falsified, masking the city's deficit, but he did not elaborate until Monday.
The council last week voted to authorize Penman to file for Chapter 9 bankruptcy to ease a dire cash crunch. The council's Wednesday meeting is to in part to avoid mediation and head straight to bankruptcy court.
The proposed fiscal emergency declaration notes the city's "dire financial condition" and states that the city is unable to pay its bills over the next 60 days.
The bankruptcy resolution states that without bankruptcy protection, San Bernardino would be unable meet its payroll, a situation "which would endanger the health, safety and welfare of the citizens of the city."
