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Bankrupt San Bernardino considers austerity measures

September 4, 2012 |  9:11 pm

San Bernardino bankruptcy
San Bernardino officials on Tuesday night were weighing a dramatic austerity plan for the insolvent city that would close libraries, slash jobs and contract out some services to the private sector.

The plan would shave $22.4 million off the city’s $45.8-million general fund budget deficit--an amount equal to about 30% of the general fund budget. The city filed for Chapter 9 bankruptcy protection last month, making it the third California city to do so this summer.

Interim City Manager Andrea Travis-Miller told the council that the city had no choice but to make deep cuts. Officials also warned that as painful as this round of cuts would be, the city would need to slash much more to balance its books.

“We just don’t have sufficient inflows to deal with the operating costs we have to even provide basic services,” Travis-Miller said. "At this point, we are convinced that if we do not begin to make deep cuts to this organization, we really will not have the cash flow to sustain us very much longer.”

The proposed budget plan would eliminate more than 100 jobs, including 41 non-sworn positions in the Police Department and a variety of positions in other departments ranging from managers to janitors.
Twenty positions were slated to be cut from the Fire Department, triggering nine demotions but no layoffs, and 18 sworn police positions were expected to be eliminated through retirements and resignations.

The plan called for consolidating a number of departments and contracting out functions including custodial services and park and tree maintenance to private vendors.

The budget reductions would probably lead to closing three out of four city libraries, as well as possible rotating closures at fire stations.

City officials were hoping for added cuts from union concessions and budget reductions in the council members’ and elected city attorney’s offices, but even with those added savings, the city would face a projected $7.1-million deficit in the current fiscal year. And the city still must address an $18-million deficit from last year and more than $300 million in unfunded liabilities.

Council members Chas Kelley and Wendy McCammack argued that the city should put more effort into looking for revenue-generating plans, including getting more money from leasing out city property for cellphone towers and moving forward with a “public-private partnership” for some of the city’s waste services.

McCammack accused her colleagues of “kicking the revenue can down the road.”

Kelley also proposed substituting a plan of his own for the slate of cuts proposed by the fire chief, leading one of his colleagues to accuse him of pandering to the union.

“I have a problem with the fire chief bringing us recommendations and then moving forward with a union proposition,” Councilman Rikke Van Johnson said.

Early in the evening, before launching into the budget debate, the council passed an ordinance that would  make it a misdemeanor for city staff to use restricted funds to pay general fund bills without approval from the City Council.(At a special meeting last Wednesday, the council did give staff permission to dip into restricted funds to make payroll).

Many cities borrow from restricted funds to cover occasional cash flow shortages in the general fund, but as San Bernardino faced budget shortfalls in recent years, it has not repaid the borrowed funds as required, contributing to the ballooning deficit and obscuring the city’s dire financial state.
But late Tuesday, the council had not yet voted on the proposed budget cuts.


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Photo: The San Bernardino City Council voted in July to declare a fiscal emergency and file for bankruptcy protection. Credit: Kirk McKoy / Los Angeles Times