San Bernardino City Council Votes To File For Chapter 9 Bankruptcy
SAN BERNARDINO (CBS/AP) — The San Bernardino City Council voted Tuesday night to file for Chapter 9 bankruptcy.
It will become the largest city in Southern California to file for bankruptcy and the third city in the state to take similar action in the past two weeks.
In a 4-2 vote with one member abstaining, the council directed the city attorney to make the move after administrators explained the dire fiscal circumstances and urged them to vote in favor of bankruptcy.
The city is projected to be $45 million in the hole for the current fiscal budget, and its reserve fund is empty. The council said the budget shortfall is the result of less revenue from property taxes and fewer sales taxes taken in because businesses have closed.
"We have an immediate cash flow issue," said Interim City Manager Andrea Miller, according to the Los Angeles Times.
Miller said the city has already stopped paying some vendors, and may not be able to make payroll over the next three months.
The councilman who abstained from voting, John Valdivia, said he did not trust the information presented at the meeting.
"The taxpayers of this city have been duped, hoodwinked and misguided for the past several years," Valdivia said, according to the San Bernardino Sun.
It was not immediately clear when San Bernardino planned to file.
The city will join Stockton and Mammoth Lakes, which recently filed for Chapter 9 bankruptcy.
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