San Bernardino Faces Dramatic Budget Cuts After Bankruptcy Filing
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San Bernardino Faces Dramatic Budget Cuts After Bankruptcy Filing

September 7, 2012

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The city of San Bernardino is facing dramatic budget cuts and internal city council fighting after making the controversial decision to file for bankruptcy, according to a report from the Los Angeles Times.

Sources say that this week’s meeting of the San Bernardino City Council was fraught with “political sniping” and “finger-pointing” just weeks after the city sought bankruptcy protection in federal court.

And the high level of tension understandable, given the harsh reality that the city must cut its annual spending by 30 percent, in order to help plug a budget shortfall of nearly $46 million, according to local sources.

The proposed plan that caused so much bickering at this week's meeting calls for a 30 percent cut in spending, layoffs of at least 100 city employees, the closure of three library branches, and strategic shutdowns of a few fire stations.

And the city’s financial stress is so severe that even these measures would still leave the city with a $7 million budget gap that would have to be filled through other steps.

One possible step mentioned at the meeting was to dip into the city's “restricted funds,” which are a source of last resort, since these funds have been earmarked for emergencies.

The city’s financial situation, however, might qualify as an emergency, as plummeting property tax revenue and the recent recession combined to sink the city’s fiscal health.

According to Interim City Manager Andrea Travis Miller, if the City Council can’t access the restricted funds, it won’t be able to meet its next payroll, which would bring the city even closer to “falling over the cliff.”

Of course, by calling its bankruptcy attorney, the city of San Bernardino has given itself some breathing room, and a good chance to get its financial house back in order, despite a budget crisis that Mayor Patrick Morris has labeled as reaching “staggering proportions.”

And the strained tenor of the council’s latest meeting also reflects tensions over a pending audit conducted by federal authorities that plans to investigate allegedly improper loans the city secured from restricted accounts in its desperate attempt to remain solvent.


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