San Bernardino will become the latest California municipality to seek court protection from creditors after the City Council voted for an emergency bankruptcy.
A Chapter 9 petition may be entered in the U.S. Bankruptcy Court in Riverside soon, City Attorney James Penman said Wednesday after the 5-2 vote. He didn’t provide a specific time. The council declared a fiscal emergency to hasten the process.
“This has been a time of immense crisis,” Mayor Patrick Morris said. “The city faces insolvency.”
San Bernardino would join California’s Stockton, an agricultural center of 292,000 east of San Francisco, and Mammoth Lakes, a mountain resort town of 8,200 south of Yosemite National Park, by entering bankruptcy proceedings.
Declining tax revenue, growing worker costs, accounting discrepancies and an almost 12 percent unemployment rate in the San Bernardino area helped drive the insolvency of the city of 209,000 about 60 miles east of Los Angeles.
San Bernardino confronts a deficit that has reached $45.8 million on a general fund of $129.4 million and would probably run out of money before the end of the state-required 60-day negotiation period, Andrea Travis-Miller, the interim city manager, said July 16. The emergency declaration lets the city skip mediation under California law.