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San Bernardino Is Third California City to Opt for Bankruptcy
San Francisco Chronicle ^ | 07/11/2012 | Michael B. Marois and Alison Vekshin

Posted on 07/11/2012 6:16:30 AM PDT by SeekAndFind

San Bernardino’s City Council voted to become the third California city this year to file for bankruptcy, as it struggles with declining tax revenue, growing employee costs and accounting discrepancies in its ledgers.

The council voted 4 to 2, with one abstention, last night to authorize a filing under Chapter 9 of U.S. bankruptcy law. The city of 209,000, about 65 miles (105 kilometers) east of Los Angeles, is so broke it can’t make its Aug. 15 payroll, interim City Manager Andrea Travis-Miller said.

“If the employees are not paid on Aug. 15, on Aug. 16 there will be a mass exodus of city employees,” City Attorney James Penman told the council before the 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.”

A San Bernardino filing would follow Stockton, a community of 292,000 east of San Francisco, which on June 28 became the biggest U.S. city to go into bankruptcy. Mammoth Lakes, a mountain resort of 8,200, filed for protection from creditors on July 3 saying it can’t afford to pay a $43 million judgment, more than twice its general-fund spending for the year.

The Chapter 9 filing would allow the city to suspend payments to creditors while it seeks court approval for a plan that balances its revenue with its debt. Travis-Miller said a filing could take a month to prepare.

Confronting a $45 million budget shortfall, San Bernardino is facing insolvency because of accounting errors, deficit spending, pension and debt costs, and lack of revenue growth, according to a June 26 budget analysis posted on the city’s website.

(Excerpt) Read more at sfgate.com ...


TOPICS: Business/Economy; Culture/Society; Front Page News; US: California
KEYWORDS: bankruptcy; california; democrats; goldenstate; liberals; progressives; sanbernardino

1 posted on 07/11/2012 6:16:36 AM PDT by SeekAndFind
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To: SeekAndFind

So goes California...so goes the nation. Sad!


2 posted on 07/11/2012 6:23:00 AM PDT by Don Corleone ("Oil the gun..eat the cannoli. Take it to the Mattress.")
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To: SeekAndFind

This should be great for business.

Not to mention all those small business’s contracted by the city that won’t get paid.

Hey Obama. Let’s raise taxes and do away with the Bush tax cuts. Lets raise the cost of Medicare too , and lets not forget bringing in more illegals to add to the cost.

America on the right track.

The right track to bankruptcy.


3 posted on 07/11/2012 6:26:45 AM PDT by Venturer
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To: SeekAndFind
Someone, some place, needs to be proactive and think about how a government can be run with minimal employees, minimal costs, and minimal services. It's not going to be a choice, so people should start planning for it now.

My personal belief is that law enforcement ought to be a do-it-yourself affair. With enough George Zimmermans, I think crime rates will be low -- but local governments have to accept that citizens will have to do a lot to protect themselves without risking prosecution.

4 posted on 07/11/2012 6:26:54 AM PDT by ClearCase_guy (Roger Taney? Not a bad Chief Justice. John Roberts? A really awful Chief Justice.)
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To: SeekAndFind
“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.”

Welcome to the real world, mr. City Attorney, where businesses fail and go bust when run by idiots, incompetents, or because of bad luck.

Fire the ones that don't show up, figure out a sustainable budget, and hire new ones. Fire the incompetents who made accounting errors. Live in the real world, and learn from the pain.

But alas, that's not going to happen. Some corrupt scheme of higher taxes, fees, strikes, bailouts, debt, bonds, whining, cries of racism, unfairness, et cetera by democrats will make the situation worse.

5 posted on 07/11/2012 6:37:01 AM PDT by ecomcon
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To: ClearCase_guy

If you want to know how to do that, pick any county in WV that has only one stoplight. Services are minimal along with the taxes.

The only way to minimize government is to choke the cash flow. Otherwise politicians will always use the money to pander to the public.


6 posted on 07/11/2012 6:37:43 AM PDT by meatloaf (Support Senate S 1863 & House Bill 1380 to eliminate oil slavery.)
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To: ClearCase_guy
Within a year in California it will be like the Wild West with everyone protecting themselves, community fire departments and people raising their own food.

This is just the beginning. First the cities, then the counties, an then the state.

7 posted on 07/11/2012 6:38:31 AM PDT by McGavin999
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To: SeekAndFind
Who is John Galt Meredith Whitney?
8 posted on 07/11/2012 6:42:20 AM PDT by BipolarBob
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To: SeekAndFind

http://www.youtube.com/watch?v=y87px1zcYYk


9 posted on 07/11/2012 6:48:52 AM PDT by hkusp40
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To: SeekAndFind
The destruction of the greatest economy in the history of the world continues. Why anyone in their right mind would lend money to a city or state controlled by irresponsible lying politicians is beyond me. The bondholders will face huge losses. It will be interesting to see how much their bonds end up being worth. The cost of borrowing for all municipalities will increase.

Municipal workers may or may not show up for work. Homeowners and honest working citizens will be sitting ducks for criminals. I would fire any worker who didn't show up but I don't know what the legal restrictions are.

Businesses that supply the City will by denied payment. Some will probably lay off workers or close down. Home values will decline. Revenues will decline.

There are several other cities in California and other states in the same situation.

The State of California is effectively bankrupt.

The house of cards is falling apart. Once people realize how bad the situation is and stop lending to cities it will get much worse.

10 posted on 07/11/2012 6:50:00 AM PDT by detective
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To: detective

Hey, I got a great idea. Lets spend a 100 billion on a railroad. That oughta fix the problem.


11 posted on 07/11/2012 7:00:13 AM PDT by technically right
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To: ClearCase_guy

—My personal belief is that law enforcement ought to be a do-it-yourself affair. —

I tend to agree. I sometimes wonder what homeowners in communities in Denver that were in the path of the fire would have done if there were no firefighters. Or how about the brush fires in California that consume so many homes?

Remember the single house that survived in one neighborhood because of the roofing compound it used? And what about doing all you can to remove combustibles around all the homes as the fire approaches? Imagine everyone in each neighborhood working to make the neighborhood effectively “hardened against” the fire entering it.

I’m just thinking out loud here. But the bottom line is as people become dependent, they lose the ability to think for themselves and even entertain the notion that they may have some power to prevent catastrophe.


12 posted on 07/11/2012 7:04:42 AM PDT by cuban leaf (Were doomed! Details at eleven.)
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To: meatloaf

I lived in Pinetop, AZ over a winter in the early 70s. It’s a mountain community at 7,500 ft and gets LOTS of snow. When the money ran out, they simply stopped plowing the roads around March. Fiscal prudence used to be the rule of the day.


13 posted on 07/11/2012 7:11:31 AM PDT by ProtectOurFreedom
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To: SeekAndFind

Brown&Co.just need to raise more taxes that will fix everything like it has worked so well in the past.

/s


14 posted on 07/11/2012 7:53:06 AM PDT by Vaduz
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To: SeekAndFind

Just a few years back this was the fastest growing county in the nation.


15 posted on 07/11/2012 7:56:18 AM PDT by Uncle Chip
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To: ecomcon; All

Of the top 10 employers in San Bernadino, only TWO are Private business. The largest Private Employer is a GROCERY STORE CHAIN, Stater Bros.

The other is a hospital.

HELLO PEOPLE....
Democrats ran out the private businesses!!


16 posted on 07/11/2012 8:27:27 AM PDT by tcrlaf (Election 2012: THE RAPTURE OF THE DEMOCRATS)
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To: tcrlaf
Bears repeating.

Of the top 10 employers in San Bernadino, only TWO are Private business.

The largest Private Employer is a GROCERY STORE CHAIN, Stater Bros.

The other is a hospital.

HELLO PEOPLE....

Democrats ran out the private businesses!!

17 posted on 07/11/2012 8:42:56 AM PDT by Covenantor ("Men are ruled...by liars who refuse them news, and by fools who cannot govern." Chesterton)
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To: SeekAndFind

“If the employees are not paid on Aug. 15, on Aug. 16 there will be a mass exodus of city employees,” City Attorney James Penman told the council before the 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.”

Well, there’s always “the Scranton Solution”...

That is, reduce each and EVERY employee on the city’s payroll to the minimum wage...

Boy, are the democrats going to regret that the mayor of Scranton ever thought THAT one up!


18 posted on 07/11/2012 8:46:26 AM PDT by Road Glide
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To: SeekAndFind

The place is stuffed with illegals.


19 posted on 07/11/2012 11:25:37 AM PDT by little jeremiah (Courage is not simply one of the virtues, but the form of every virtue at the testing point. CSLewis)
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To: little jeremiah

” The place is stuffed with illegals.”

Bout time somebody nailed it : )


20 posted on 07/11/2012 1:31:24 PM PDT by stephenjohnbanker (God, family, country, mom, apple pie, the girl next door and a Ford F250 to pull my boat.)
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To: stephenjohnbanker

And they get free schooling, medical care, probably welfare and all that goes with it, and cost the judicial system - cops, jails, judges etc - big bucks.

Take out the illegals and see how bankrupt SB is. Probably the same with Stockton. Too bad about California.


21 posted on 07/11/2012 1:50:09 PM PDT by little jeremiah (Courage is not simply one of the virtues, but the form of every virtue at the testing point. CSLewis)
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To: little jeremiah

” Take out the illegals and see how bankrupt SB is. Probably the same with Stockton. “

Or any Calif. city.


22 posted on 07/11/2012 2:08:49 PM PDT by stephenjohnbanker (God, family, country, mom, apple pie, the girl next door and a Ford F250 to pull my boat.)
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To: ClearCase_guy
Someone, some place, needs to be proactive and think about how a government can be run with minimal employees, minimal costs, and minimal services. It's not going to be a choice, so people should start planning for it now.

San Bernardino just started that planning process.

23 posted on 07/11/2012 8:44:56 PM PDT by gunsequalfreedom (Conservative is not a label of convenience. It is a guide to your actions.)
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To: hkusp40

How many lines of The Slime can your recite without looking up the lyrics? Thanks for the link to Zappa song.


24 posted on 07/11/2012 8:49:44 PM PDT by gunsequalfreedom (Conservative is not a label of convenience. It is a guide to your actions.)
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To: tcrlaf

I saw an article that new admin hires discovered the crisis, that the previous city administrators had been cooking the budget for the city council for 15 years.


25 posted on 07/11/2012 8:54:33 PM PDT by gunsequalfreedom (Conservative is not a label of convenience. It is a guide to your actions.)
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