LOS ANGELES — Desert Hot Springs, Calif. is embroiled in a lawsuit with its police union stemming from a decision to slash police salaries to avert a fiscal crisis.
The union sued in February after the City Council cut most police salaries by more than 22%, according to the Desert Sun newspaper.
The parties are due in Riverside Superior Court for a status conference on April 15.
The city won the first round when a judge denied on April 1 a temporary injunction requested by the police union that would have restored salaries and back pay.
An adverse ruling on the injunction would have cost the city $1 million in back pay.
The city is taking steps to try to shrink an operational deficit of more than $6 million amid the threat of a return trip to the bankruptcy court.
The council declared a fiscal emergency on Nov. 19, a required first step before declaring Chapter 9 bankruptcy.
Without cuts to police salaries, the Riverside County resort city of 26,000 near Palm Springs would have run out of cash by March, according to report presented to the council last year by Bob Adams, interim city manager.
If the city files for bankruptcy, it would be the city's second trip to bankruptcy court. It filed for Chapter 9 bankruptcy in 2001 after losing a legal judgment involving a mobile home park developer. It exited bankruptcy in 2004.
A new filing could endanger the debt it sold to get out of that bankruptcy. The city has $18 million in debt comprised of $8 million in certificates of participation and $10 million in bonds issued to repay the judgment that forced the city into bankruptcy in 2001.
In March, city leaders voted to place a public safety measure on a June ballot that would increase the parcel tax on vacant land from about $30 to $372 per acre if approved by two-thirds of voters, according to the news report.
