A view of City Hall in downtown San Bernardino on Wendesday evening. In the wake of the City Council’s formal declaration of a fiscal emergency and filing for bankruptcy, the city’s leaders and residents wonder what’s next? (Gabriel Luis Acosta/Staff Photographer)

By Andrew Edwards, The (San Bernardino County) Sun
Posted: 07/19/2012 02:11:12 PM PDT

Related story: San Bernardino declares fiscal emergency, approves bankruptcy
Catch up: Read more about the San Bernardino financial crisis.
Photo gallery: A state of emergency: San Bernardino formally declares bankruptcy

SAN BERNARDINO – The next step in the city’s move toward filing for Chapter 9 bankruptcy protection will be to prepare a short-term budget that will almost certainly call for a round of layoffs.

“The employees are very cognizant of the fact that there will be layoffs, and that’s why so many are leaving,” said George Swift, coordinator for the Pasadena-based local of the International Union of Operating Engineers, which represents the city’s general employees.

“The only thing we are trying to make sure is that there is enough money in the budget to pay their salaries,” Swift said. “We represent some of the lowest paid employees in the city and a lot of them are living payday to payday.”

The City Council is scheduled to begin talks on the short-term budget Tuesday. The entire bankruptcy process may take 12 to 18 months or even longer if challenged by creditors, Mayor Pat Morris said.

The city has already cut its work force by 40percent over the past four years, Morris said.

At least 14 city employees resigned or retired in the week after the council first authorized staffers to prepare a bankruptcy filing on July 10. On Wednesday evening, the council voted 5 to 2 to both declare a fiscal emergency and formally authorize filing for bankruptcy.

San Bernardino faces an estimated $45million deficit and is expected to be more than $5million in the red at the end of this month. City Hall now has about one month to prepare its filing for delivery to U.S. Bankruptcy Court in Riverside.

The declaration of fiscal emergency may allow the city to avoid a 60-day mediation period with its employees and creditors, but the council must first approve a short-term budget before the case can go before a judge.

“I don’t think it will be good news for anybody. It will be painful,” Morris said.

Acting Assistant City Manager Gwendolyn Waters affirmed that layoffs probably will be included in the variety of short-term budget options that Acting City Manager Andrea Travis-Miller is preparing for the council.

Those plans are still under development and Travis-Miller doesn’t want to show details of potential layoffs before the council meets on Tuesday.

“We don’t want to release a bunch of plans and have a bunch of employees say, `Oh my, God. That’s my job.’ That would be a horrible thing to do to somebody,” Waters said.

San Bernardino has hired Paul Glassman of the Santa Monica-based Stradling, Yocca, Carlson & Routh to be the city’s bankruptcy counsel.

Glassman has advised that the city will need to file its case in about one month, City Attorney James F. Penman said.

To read entire story, click here.