For a city that barely registers a blip on the radar, barring its notorious crime rate, San Bernardino’s bankruptcy gained national attention last week with a Chapter 9 filing, one of only three cities in the state this year to declare bankruptcy.
From top to bottom, the move now impacts the entire city structure as the city council prepares to spend the coming weeks working to preserve the essentials, once they can agree on exactly what is essential.
“They keep talking about, ‘we’re going to keep the essentials,’ and that description of essentials is different for each councilperson,” said Sixth Ward Councilman Rikke Van Johnson.
Councilman Johnson said it’s unclear which services will take the big hit, but everyone is expected to fight for their pet projects. If the money isn’t there, he said it will be very hard to hold on to those projects no matter how hard the fight.
Last week, the council voted for bankruptcy to deal with its $45.8 million gap, and the city’s inability to make payroll for its employees next month. Most everyone points to two problems that spurred the collapse – loss of redevelopment dollars that was part of a state mandate last year, and the police and fire departments’ salary and pension on the General Fund.
Of all city employees earning six-digit salaries, Mr. Johnson said that over 60% of top earners work in the fire department. Overtime is a huge problem because when someone calls in sick, the city not only pays sick pay, but also overtime for whoever fills in.
The weight of the police and fire departments, and unwillingness of the fire department to take the sacrificial cut when other unions conceded was a major part of the economic crisis, he said.
“That all ends with this Chapter 9 filing,” he said. “We’ve got to develop a plan and we’ve got to see the plan through.”
The city has formed a committee of council members to decide how to spend the remaining 25 percent of the General Fund.
Drawing more ire last week, allegations of accounting fraud from city attorney James Penman did not help matters. Johnson said that all the information, true or false, should have been completely compiled, and then handed over for investigation.
“There’s no need to shout it out from the mountaintops,” he said. “If it proves to be false allegations, then you open our city to litigation.”
He plans to hold Town Hall meetings to keep the lines of communication open for the community, and will fight for whatever he can keep for the Sixth Ward.
Local businesswoman Delores Armstead believes the bankruptcy is just a reflection of long-standing greed and poor decision making that the city has endured for decades.
She said that both the police and fire departments have usurped the city’s General Fund for so long, and other city budgets do not have the high law enforcement pay and pensions like San Bernardino.
“The ones that do, like Vallejo, that’s one of the reasons why they went bankrupt,” said Ms. Armstead, who is also vice president of the Inland Empire African American Chamber of Commerce “It needs to be adjusted.”
Vallejo, which filed bankruptcy in 2008, is listed as one of the top ten best-paying cities in the nation for firefighters on Monster.com, but has since lowered the fire department’s pension rate.
For a city already under a negative stigma, this latest news in San Bernardino is like a big black eye, she said.
“Trying to get businesses to come to San Bernardino, they go through downtown and it’s not exactly a tourist attraction. Something like bankruptcy, businesses are going to wonder if the city is bankrupt, what can they do for me?”