San Bernardino Bankruptcy


(Best Syndication News) The city of San Bernardino is seeking ways to cover expenses as city officials announced a decision to seek bankruptcy protection. Police and fire officials say services will continue while the city deals with their financial crisis.

The County Sheriff’s department has also opened an investigation into possible criminal activity. Sheriff officials released a brief statement stating they opened an investigation several moths ago. There are few details at this time and the office has not released any names. Reports suggest that some departments are being investigated.

San Bernardino is not the only California city dealing with crushing expenses and declining tax revenue. The city of Stockton has also filed for bankruptcy and other cities may face a similar situation.

The city of San Bernardino says that reserves in the general fund were exhausted years ago and they are encumbered with debt obligations and labor agreements. They are facing a fiscal emergency, according to their executive summary released this week.

“Yet, the city is still facing the possibility of insolvency due to a variety of issues including accounting errors, deficit spending, lack of revenue growth, and increases in pension and debt costs,” said Andrea Miller, the Interim City Manager.

The city has taken steps over the last several years to reduce their costs, but those costs continued to outpace revenue. The recession, falling home prices, and an increase in the number of foreclosures has placed the city in a dire situation.

The city has made some last ditch efforts to avoid bankruptcy. “If these measures do not achieve immediate and substantial cost savings, then the city will have to explore other alternatives to deal with the fiscal crisis, including developing plans for reducing costs further and providing lower service level,” Miller said.

By: Dan Wilson

Image: Chart of Expenses in thousands - Police and Fire top the list.



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