San Bernardino Prepares for Bankruptcy Exit

by San Antonio Attorney

San Bernardino is about to emerge from bankruptcy after a taxing 4.5 years in the process.  The heads of the Southern California city are going to move from cost-reduction to attain solvency en route for improving the economy of the city.

A meeting with Mayor Care Davis, City Council, City Manager Mark Scott, and Scott’s managers to design action-centered work plan.

An initial confirmation of the exit plan was scheduled by U.S. Bankruptcy Judge Meredith Jury on January 27.

San Bernardino, which has about 216,000 people, was able to eliminate $350 million in expenses by means of the bankruptcy process, at the price of estimated $25 million in legal expenditures and huge amounts of time that city employees worked, as stated on the city’s bankruptcy update on Dec. 7.

The bondholders of $50 million outstanding pension debt received a rigorous cut, receiving a 40% recovery.

San Bernardino has been brought into the limelight with other cities in the state because of its authority practices by means of the voters’ approval on Nov.  8 of a recent city charter.

The charter is still subject to the approval of California Secretary of State Alex Padilla.  It is move to change the city from a “strong mayor” system of authority to “council-manager.” Though the mayor will maintain a permanent position, he will have to coordinate the council as one governing body.  Moreover, there’s no more election for City attorney.

According to Scott, the problem with an elected city attorney is that it prevents people from working together because they have different agenda.

In July 2012, San Bernardino filed for Chapter 9 bankruptcy with $45.8 million shortfall.  At that time, the mayor said the city had insufficient money to pay its workers and obligations, and it only had funds that lasted for 60 days.

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