San Bernardino appears poised to become the third California city to file for bankruptcy protection so far this year.
Citing the ongoing economic downturn, lack of recovery in the housing market and state funding take-aways, the City Council voted Tuesday to file Chapter 9. Without filing for bankruptcy, officials said, the city probably could not meet its Aug. 15 payroll.
In recent weeks, the cities of Stockton and Mammoth Lakes made similar moves.
If San Bernardino's decision seems sudden, however, it's really not.
The city has been struggling to reinvent itself for years and has been particularly hard hit by the recession. At the same time, city leaders have spent too much time politicking and feuding and obviously not enough time scrutinizing the city's finances.
Were they surprised when Acting City Manager Andrea Travis-Miller and Finance Director Jason Simpson reported to the council only two weeks ago that San Bernardino has a $45 million budget deficit?
City Attorney James Penman said at the meeting Tuesday that for 13 of the past 16 years, the council had been given falsified budget documents - showing the city in the black when it was actually in the red. Did they just discover this?
That's an amazing statement, especially since that period spanned several city managers and interim city managers and finance directors, not to mention elected officials. A serial conspiracy to lie about the budget to the
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mayor and council over 16 years seems far-fetched, so we look forward to learning how Penman came to that conclusion.Penman, incidentally, is the only elected official other than the city treasurer to have served through those 16 years, and has consistently campaigned on his ability to hold the mayor's and council's feet to the fire.
The city attorney is also a major player in the circus that masquerades as City Council meetings. Penman and Councilwoman Wendy McCammack on one side, and Mayor Patrick Morris and his council supporters on the other, appear to spend more time baiting and reacting to each other than they do overseeing the city.
Observers of the city's meetings might find it small surprise that this crew hasn't performed its fiduciary oversight. Politics and personality trump all other concerns.
Still the city has made significant cuts in recent years:
San Bernardino has laid off 20 percent of its work force - more than 250 employees - and has wrung $10 million in concessions from employee unions over four years. Morris points to the $30 million hit to the city from the state's abolition of redevelopment, but says employee costs are still the big thing that must be addressed.
Retirement spending has gone from 9 percent of the general fund in 2006-7 to 13 percent of the general fund in 2011-12 and is expected to account for 15 percent of general fund spending by 2015-16.
McCammack blames overspending by Morris and his council majority on projects like the rapid-transit bus line, the Regal Theater and Operation Phoenix. One has to wonder also about the fiscal effects on the city of woebegone San Bernardino International Airport, which is under federal investigation.
We have little respect for Councilman John Valdivia's abstention from the bankruptcy vote. He was not elected to duck the biggest issue the city faces. In fact, he was elected with safety union backing, ousting an incumbent who was the city's main advocate of pension reform. If escalating pension costs are among the city's fiscal problems, sitting on the sidelines does no good.
City employees will be hurt by civic bankruptcy, and so will every resident and business in San Bernardino. That's the real tragedy here.