San Bernardino is now the third California city to seek bankruptcy protection in recent weeks after Stockton in June and Mammoth Lakes last week. Unlike Stockton and Mammoth Lakes, however, San Bernardino's bankruptcy announcement came as a surprise (only to people who don't know California is broke, of course). San Bernardino the 17th largest city in California and home to 210,000 residents, a decent Cal State school and the first McDonald's ever.
The city council voted Tuesday night to file for bankruptcy due to a budget deficit of $45 million. City staff estimate the city will be out of cash within weeks.
If having to throw their hands in the air and say they're broke weren't enough, City Attorney James Penman had to front everyone off by telling the city council on Tuesday financial documents have been fudged for years, though he isn't sure if there was criminal intent behind the falsification. See, that's why he's a lawyer and not an accountant, obviously. That didn't stop him from saying "evidence of suggested wrongdoing" had been handed to government organizations he wouldn't name. Classy guy, that City Attorney.
Naturally, SB Mayor Patrick Morris had absolutely no idea what Penman was talking about and told Reuters that Tuesday night was the first he was hearing about any kind of falsified or mildly fudged financial info. He did admit that there was this little thing with budget figures not getting reconciled with audited financial statements but said that was probably just "sloppy budgeting analysis" and not anything malicious.
Though SB has made some serious cuts, they're still spending more than they're taking in. One need not be an accountant to see why that would be a problem. Oh and they might not be able to make payroll mid August. No biggie! Or not… “If the employees are not paid on Aug. 15, on Aug. 16 there will be a mass exodus of city employees,” professional troll Penman told the city council before the bankruptcy vote. “People are not going to work when they don’t get paid. Most of our employees will not show up to work. That would include police, fire, refuse, everybody. The city will virtually shut down.”
For a peek at what city employees make in San Bernardino, go ahead and dig on this. The city's payroll manager can make up to $86,615 and no less than $71,256 a year. Not bad… you know, if the city can actually pay them, that is.
The city boasts $243 million of debt outstanding, which works out to per-person debt of $1,506.
Filing Chapter 9 will give SB the opportunity to dodge its creditors for awhile, pay its employees and figure something out in the interim. Might I suggest balancing their budget for starters? You know, I'm no accountant or anything but that might help.
Good luck, San Bernardino!
