San Bernardino bankruptcy: Other California cities could be next

[Valin]

LA Times:

7/12/12

 

San Bernardino this week became the third California city to seek bankruptcy protection in the last month, and experts say it might not be the last.

 

"There are likely to be more in the future, but it's hard to know, since a lot of struggling cities may manage to work things out,'' said Michael Coleman, a fiscal policy adviser for the California League of Cities. "Some cities may not go into a bankruptcy, but they may dissolve. They may cease to exist.''

 

Once rare, turning to bankruptcy has become a painful but enticing option for cities whose labor costs and municipal debt far outpace anemic tax revenue. The Bay Area city of Vallejo began the current trend in May 2008, filing for Chapter 9 bankruptcy protection because, city leaders said, salaries and benefits for its public safety workers were eating up too much of the general fund.

 

(Snip)

 

This obviously calls for more taxes on the (Evil) rich!

[clearvision]

Stockton CA also declared awhile back and now:

 

A group of Stockton retirees is seeking a restraining order against the bankrupt city's efforts to cut their health benefits, part of the city's "pendency plan" aimed at keeping it solvent while it seeks protections from creditors

.

The city informed retirees by letter they must pay their premiums by July 30 or "medical coverage will be canceled retroactive to July 1."

Promises of lifelong health benefits have been blamed in part for Stockton's failure, which was also brought on by the housing bust, unemployment and borrowing for downtown development that did not bring expected results.

 

It seems lawyers keep being the big winners in the current market.

[Valin]

San Bernardino bankruptcy: Criminal probe underway

7/12/12

 

Law enforcement officials said Thursday that they have an open criminal investigation regarding allegations of misconduct in the city government of San Bernardino, which announced this week it was going to file for bankruptcy.

 

The San Bernardino County Sheriff's Department released a statement confirming the probe but released few other details.

 

"Several months ago at the request of San Bernardino city officials, the San Bernardino County Sheriff’s Department, along with the San Bernardino Police Department and the district attorney’s office began an investigation related to allegations of possible criminal activity within departments of the San Bernardino city government," the statement said. "The investigation is continuing, and details will not be released at this time. Updates will be provided as new information becomes available."

 

PHOTOS: California cities in bankruptcy

 

There have been allegations that some financial documents were falsified to hide the seriousness of San Bernardino's financial woes.

 

(Snip)

[Valin]