San Bernardino becomes 3rd Calif. city in 2 weeks to file for bankruptcy protection

[Shadow]

San Bernardino became the third California city in less than two weeks to file municipal bankruptcy protection Tuesday night when the city council voted to make the move in the face of a $45-million budget shortfall.
Shortly before the council's vote, Interim Mayor Andrea Miller recommended the city of 209,000 seek bankruptcy protection due, in part, to its inability to make payroll over the next three months, the Los Angeles Times reported.

If the payroll is not met, the city attorney says there could be a mass exodus of employees. While the mayor says that's scenario is unlikely, bankruptcy protection gives the city time to avoid payroll delinquency.

The move followed city negotiations that conceded $10 million from employees and slashed the workforce by 20 percent over the last four years, the newspaper reported.

http://usnews.msnbc.msn.com/_news/2012/07/11/12675262-san-bernardino-becomes-3rd-calif-city-in-2-weeks-to-file-for-bankruptcy-protection?lite

[PostmodernProphet]

here in Michigan we have a system where the state steps in and appoints an administrator to run cities that are getting close to bankruptcy...

Michigan enabled emergency managers last year through Public Act 4 (http://www.legislature.mi.gov/documents/2011-2012/publicact/htm/2011-PA-0004.htm), which allows the state to appoint emergency managers who can dissolve local governments, fire public employees, cancel union contracts, and pass local ordinances. (It’s important to note, as some (http://michiganpolicy.com/index.php?option=com_content&view=article&id=1155:michigan-a-state-of-home-rule-local-autonomy-and-emergency-managers&catid=60:urban-affairs-current-issues&Itemid=248) have, that this “new” law is really an expansion of a longer-standing Michigan emergency-manager statute.) The law has sustained significant criticism, even evoking claims of racism (http://www.mlive.com/news/detroit/index.ssf/2012/01/michigan_emergency_managers_di.html), since usually there are white managers appointed to govern cities where a majority of the residents are black (http://datadrivencity.com/census-tuesday-the-black-population/). So far, there are four cities with emergency managers (Flint, Pontiac, Benton Harbor, and Ecorse), reports Michigan Radio (http://www.michiganradio.org/post/u-m-panel-focuses-michigans-emergency-manager-law), and two school districts—Detroit and Highland Park. The city of Detroit may be next (http://www.nytimes.com/2011/12/24/us/detroit-budget-crisis-may-lead-to-outside-manager.html?pagewanted=2&ref=michigan).

http://datadrivencity.com/is-michigans-appoint-of-emergency-city-managers-legal/

[Kathianne]

San Bernardino became the third California city in less than two weeks to file municipal bankruptcy protection Tuesday night when the city council voted to make the move in the face of a $45-million budget shortfall.
Shortly before the council's vote, Interim Mayor Andrea Miller recommended the city of 209,000 seek bankruptcy protection due, in part, to its inability to make payroll over the next three months, the Los Angeles Times reported.

If the payroll is not met, the city attorney says there could be a mass exodus of employees. While the mayor says that's scenario is unlikely, bankruptcy protection gives the city time to avoid payroll delinquency.

The move followed city negotiations that conceded $10 million from employees and slashed the workforce by 20 percent over the last four years, the newspaper reported.

http://usnews.msnbc.msn.com/_news/2012/07/11/12675262-san-bernardino-becomes-3rd-calif-city-in-2-weeks-to-file-for-bankruptcy-protection?lite

I wouldn't be surprised to see the State of Illinois declare bankruptcy in the not too distant future. With the obvious exception of Chicago, most municipalities and counties in Illinois are solvent themselves. I think in part because they recognize the folly of the state.

More on San Bernardino:

http://news.yahoo.com/san-bernardino-california-files-bankruptcy-over-1-billion-021606235--finance.html


...Pension costs will reach $25 million this year, double the 2006 level...

Related? It's the 'retirement benefits!'

http://news.yahoo.com/blogs/ticket/congress-won-t-rescue-postal-defaults-health-care-221219388.html



Congress won’t rescue postal service as it defaults on health care benefits

By Rachel Rose Hartman, Yahoo! News | The Ticket (http://news.yahoo.com/blogs/ticket/) – 11 hrs ago

Congress is sitting idly by Wednesday as the U.S. Postal Service prepares to default on $5.5 billion in retiree health care payments.

The postal service confirmed in a statement Monday that it would default on its payment to the U.S. Treasury due at midnight on Wednesday. It is also prepared to default on a $5.6 billion tab due Sept. 30 to pre-pay retiree health benefits "absent legislation enacted by Congress."


The postal service stressed that the defaults would "have no material effect on the operations of the Postal Service," which would continue to be fully funded, as would services...



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[CSM]

Guess what happens when you have more government employees (local, state, and federal) than employees in the private sector? The problem with self-licking ice cream cones is that eventually they consume themselves.