San Bernardino, the third California city to move toward a bankruptcy filing this year, will defer paying $3.4 million in pension bonds and $2.2 million toward retiree health care to tide it over before seeking court protection from creditors.
The city of 209,000 suspended a total of $6.4 million in payments under an emergency budget adopted Tuesday in a unanimous City Council vote.
San Bernardino's City Council voted July 10 to seek bankruptcy protection and followed up a week later by declaring a fiscal emergency, allowing San Bernardino bypass state-required mediation with creditors and proceed directly to U.S. Bankruptcy Court.
"It is certainly not a long-term solution," interim City Manager Andrea Travis-Miller told the council. "This allows us to operate for a few months as we go to bankruptcy court. The things that we're deferring will need to be paid at some point."
Officials didn't say when the city planned to go to court. The filing is being held up by difficulty untangling previous budgets, said Gwen Waters, a city spokeswoman.
The city is unable to access the short-term credit market and that vendors are demanding up-front cash payments, according to the emergency declaration.