"With a third California city deciding to declare bankruptcy within two weeks, questions remain about whether they're canaries in California's economic coal mine or just a few outliers that couldn't sustain their spending amid an economic downturn.
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| San Bernardino downtown |
Stockton, with a population of almost 296,000, two weeks ago became the largest U.S. city ever to seek bankruptcy protection. Mammoth Lakes, a Mono County town of about 8,300, followed suit July 3.And the city council of San Bernardino, with almost 212,000 residents, did likewise Tuesday night. Mammoth Lakes is a special case, hit with a $43 million judgment in a developer's breach-of-contract lawsuit; the town's current general-fund budget is only $19 million.
.... "Overall
across the state we're going to see more of these, and I'm surprised to
see anybody surprised by it," said former state finance director Mike
Genest, now a fiscal policy consultant. "Many of us have been predicting
a substantial
number of municipal bankruptcies in California for quite some time, and
those predictions are starting to come true." Times-Herald/Josh Richman/Media News Group (serving Solano and Napa Counties), 7/12/12, "Are cities' bankruptcies flukes, or first dominoes to fall?" Read Article.
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| North of town |
.... On Tuesday, the City Council voted to seek Chapter 9 bankruptcy
protection, a section of federal law for municipalities facing
insolvency. Interim City Manager Andrea Miller told the council that the
city faced a $45.8-million budget shortfall, the equivalent of about
35% of the city’s annual budget, and would not be able make payroll
this summer. "Los Angeles Times/local, 7/12/12. "San Bernardino bankruptcy: Criminal probe underway." Read Article.
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| Home of the 1st McDonald's |
"I have not found that there's anything more than negligence, maybe sloppiness," she told the Los Angeles Times on Thursday. .... The problems stem from weak property and sales tax revenues combined
with escalating pension costs and a loss of state redevelopment funds,
city officials said." Bradenton Herald (Bradenton, Florida)/Associated Press/Amy Taxin and David R. Martin, 7/12/12. "Sheriff, DA investigating bankruptcy-bound CA City." Read Article.
Reference- San Bernardino. City Cata, Wikipedia.
Submitted by Jim Alex
Posted by Kathy Meeh
5 comments:
No deliberate deception in city accounting methods, just sloppiness? Maybe a little ineptitude, procrastination and wishful thinking, too? Oh that could never happen here.
From another article
"City Attorney Jim Penman alleges that for at least 13 years, former city staff falsified past budget documents"
Naw, couldn't happen here.
Locally my concern would be chronic ineptitude and the natural inclination of politicians and their flunkies to hide or spin bad news and pass the buck. Perfectly legal municipal accounting methods leave lots of room for that stuff. They're probably not crooks.
Anon 250, this was staff that may have hidden budget problems. They have more motive to paint a rosy picture then does elected officials.
Anon 521, I don't know about staff having more motivation, but they do have the means, opportunity and
greater insight into the problem.
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