LOS ANGELES — San Bernardino announced Thursday morning that the city had reached a tentative agreement with the California Public Employees' Retirement System on missed payments included in the city's Chapter 9 bankruptcy filing.
The details of the agreement are not being released per U.S. Bankruptcy Judge Gregg Zive's gag order on the mediation the city has been undergoing with creditors since Nov. 24.
Negotiations are continuing with all of the city's largest creditors, including for new contracts for unionized employees, said Michael McKinney, San Bernardino Mayor Carey Davis' chief of staff.
The city and CalPERS "entered into an agreement that addresses payments that the city has begun to make to CalPERS on account of prior deferred payments and the currently stayed eligibility appeal," according to the statement.
The most recent figures on the year of missed payments by the city totalled $13 million.
"Pursuant to Judge Zive's instructions and order, all content and details of the mediator's order are to remain confidential and will be shared only when the mediation is completed and/or until the court considers the plan of adjustment," McKinney said.
McKinney acknowledged that CalPERS has been a major focus of the mediation, but he couldn't comment on whether this tentative agreement might mean more focus on other creditors, such as bondholders. Negotiations with the police and fire unions also are ongoing.
According to San Bernardino's 2010 audited financial report, its most recent, the city said it had $223 million of outstanding debt at the end of June 2010, of which $131 million were tax allocation bonds. The city also had $48 million of pension obligation bonds, $12.5 million of revenue bonds and $31 million of certificates of participation.
The city council will vote on a $131 million balanced budget on June 23, McKinney said. That budget includes $10.6 million in payments to creditors, he added.
McKinney said San Bernardino's ability to put forth a balanced budget indicates the city is recovering.
In San Bernardino as in its fellow California bankrupt Stockton, the largest creditors are bondholders, fire and police unions, and the pension fund.
"All we can say, because of the confidentiality agreement, is that we reached an agreement and it will be the basis of the plan of adjustment," said Rosanna Westmoreland, a CalPERS spokeswoman. "We have been engaged in extensive negotiations and made significant progress."
While considered a good sign, neither Westmoreland, nor McKinney could comment on how much longer it might take before the city releases the plan of adjustment that all creditors will have to agree to before the city can exit bankruptcy.
A status hearing is scheduled at U.S. Bankruptcy Court in Riverside at 1:30 p.m. Pacific June 19.
