Thursday, July 19, 2012

City of San Bernardino, California, to vote on filing for bankruptcy

Los Angeles (CNN) -- The City Council of San Bernardino, California, is scheduled to vote late Wednesday on a resolution formally authorizing the filing of bankruptcy.

The council, scheduled to meet at 5 p.m., is to consider first another resolution declaring a fiscal emergency.

Last week, Interim City Manager Andrea Miller and Finance Director Jason Simpson issued a report stating that the city was facing insolvency and its expenditures are projected to exceed revenues by $45 million. The city's general fund reserves had been as high as $19 million in 2001 but are now depleted, the report said.

Some $10 million to $16 million in annual revenue has evaporated in recent years as taxable sales dried up and property values plummeted in the city of 211,000 residents, the report said. San Bernardino is about 60 miles east of downtown Los Angeles.

Prior agreements reducing city salaries are now ending, "creating an increase in salaries and benefits of $10 million effective July 1, 2012, and increased costs in future years as merit increases resume," the report said. Read More