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San Bernardino Adopts Bankruptcy Plan

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Lessons from movie "Lincoln" spurs unusual show of unity

By Chris Levister

In an unusual show of bipartisanship, bankrupt San Bernardino adopted an austerity plan on a 5 - 2 vote on Monday, Nov. 26.

The city filed for Chapter 9 bankruptcy protection Aug. 1, after declaring a fiscal emergency due to a $45.8 million budget deficit and a cash-flow crisis that left it unable to pay many bills.

Among other things, the City Council agreed to cut employee benefits and eliminate unfilled police officer positions.

The move comes several days before the city files a court document incorporating ideas from the city's pendency plan, guiding spending decisions while the city is in bankruptcy or until the end of Fiscal Year 2013-14.

The plan reduces employee compensation by $26 million - including some already-approved cuts - and defers another $34.9 million.

The spending document renegotiates the city's obligations to the state's powerful public employee pension fund, a move that would save an additional $35 million by postponing payments over 30 years to the California Public Employee Retirement System (CalPERS).

San Bernardino owes hundreds of creditors millions of dollars, according to its court filings. CalPERS is the largest, and is owed $143.3 million. The city also owes bond holders $46.1 million from a 2006 pension obligation bond.

The Police Department would be reduced from 299 officer positions to 260. That wouldn’t require layoffs, just eliminating vacancies. The Fire Department would reduce

overtime by hiring more firefighters.

By hiring more firefighters, the department would pay regular rates for “floaters” to cover for people on vacation or out sick. That would reduce overtime expenses by 35 percent.

Police and firefighters would have to pay a share of their pension costs. Currently the city funds the entire 9 percent contribution.

The council must present its bankruptcy plan to the court on Friday and took action during a special meeting on Monday afternoon.

San Bernardino city politics are known for being polarized, with council meetings often breaking into shouting matches between rival factions – those who support Mayor Pat Morris and his critics who are aligned with City Attorney Jim Penman.

Morris and Penman, who have feuded often, put aside their differences and led the discussion seeking approval of the plan.

“We have tough fights ahead of us in bankruptcy court, we're facing a real struggle,” Penman said. “If the mayor and city attorney can resolve our differences the council can do the same."

Drawing on an analogy from the movie "Lincoln", Penman cited the political leadership shown by the 16th U.S. President in getting the 13th amendment approved.

“Certainly nothing San Bernardino has ever gone through can compare to the Civil War, but just as the Civil War is considered by many to be the defining moment in American history, this bankruptcy proceeding may well be the defining moment for the city of San Bernardino,” Penman said.

Morris told City Council members that compromise was required.

Some council members, who object to cuts such as the elimination of 18 vacant positions in the police department, said they did not like the plan, but feared that without it the judge might throw out the city's bankruptcy petition.

"It's not a perfect plan," said councilman Robert Jenkins, who is affiliated with the city's unions.

"But San Bernardino has to get past this next hurdle."

While the majority of the council agreed, Councilman Chas Kelley argued strenuously against the plan.

“This budget is the financial equivalent of using leeches to bleed a sick patient,” Kelley said.

“This budget waves the white flag of economic and financial surrender.”

Councilman John Valdivia refused to support the plan saying it goes against some of his core values, including having an adequately staffed police department.

Police Chief Rob Handy had said the department could get along with 260 sworn officer positions, Valdivia said that isn’t enough.

“That’s just not acceptable,” he said. “In a city with all-time high crime rate levels, as dangerous as this city is, I don’t want to be just OK. I want to be exceptional.”

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0 # Alberto 2013-03-30 18:53
Police and teachers unions have had politicians in their pockets for decades. Most police work is revenue raising via traffic violations and showing up the fact. Let me defend myself. I don't need a guy in a blue costume to protect me. Most police only care about their inflated salaries, benefits and pensions. Being as old as I am, I have seen most people in law enforcement get as much in free services out of public fear than their pay. Add civil forfeiture theft! They receive more than free donuts. Police are just soldiers for the state and the state is just the warden of national and multinational corporations. Teachers are mostly glorified camp counselors with partial year work and full year pay. I love my sanitation men though. They do real hard work and do something for my benefit daily. I have never used a public school or university and only once has a cop come to bat for me, the others victimized the victim. Police steal through unions and corrupt politicians.
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