CALIFORNIA CITIES COULD SOUND NATIONAL WARNING IN FILING BANKRUPTCY (216 hits)
YOUR NATIONAL NEWS
San Bernardino, CA
City officials of San Bernardino, California tried in prevention to keep its budget in check by cutting spending and salaries along with selling assets only discovered it all was leading to the city's possible filing for bankruptcy. Recently, the city was not able to meet payments to some of its vendors and payroll for its employees are running low and on it way to depletion. The trying pain of financial woes has prompted elected officials to take a sudden move to authorizing the city’s attorney to seek federal bankruptcy protection. This makes San Bernardino the third city in California to file in less than a two week period.
San Bernardino city officials have met with financial difficulties and are eager to not be caught in facing default on payments to employees. Experts in financial bankruptcy said that this could sound an alarm for not only California cities, but cities across state and the country. Much they claim has to do with weak property and sale tax revenues as pension obligations continue to rise. Presently, according to news reports San Bernardino is facing a budget shortfall of $45 million and annual deficits of the next 5 years. Even with cutting jobs from the workforce of 20% over the last 4 years the financial pain has heavily hit the revenues of property and sales taxes.
In the council meeting on July 11, 2012 members voted 4 to authorize and 2 which opposed the bankruptcy filing. City attorney James Penman said the city is likely to declare a financial emergency on Monday, July 16, 2012, but was not clear to announce when a formal bankruptcy would come.