Widespread layoffs or pay reductions for city workers are expected. The city is preparing to file for bankruptcy protection.

 

By Phil Willon, Los Angeles Times
July 25, 2012, 7:50 p.m.

San Bernardino must cut government spending by a third, almost assuredly resulting in widespread layoffs or pay reductions for city workers, as it prepares to officially file for bankruptcy protection, city officials said.

Interim City Manager Andrea Travis-Miller told the City Council that it must cut $45.8 million from the $166-million budget to ensure the city remains solvent throughout the current fiscal year, which runs through next June. Crafting the austerity plan will be required as part of the Chapter 9 municipal bankruptcy process.

“By any definition, a 30% budget cut in a single fiscal year is a severe haircut. Indeed, you might even call it a scalping,” Mayor Patrick Morris said at a special council meeting on the city’s fiscal crisis Tuesday evening.

At the meeting, the seven-member council voted unanimously to suspend debt payments and freeze staff vacancies, saving $5.4 million in July alone, the first and easiest step in what’s expected to be a budgetary bloodletting in the months ahead.

Next month, the council will begin the more difficult cutting. In anticipation of layoffs, city officials already are preparing job placement and financial assistance programs for employees.

San Bernardino became the third California city to declare insolvency this year, joining Stockton in the Central Valley and Mammoth Lakes in the Eastern Sierra Nevada.

Travis-Miller said the 30% cut to the general fund budget would allow to city to live within its expected revenue of $120 million this fiscal year. The city’s police and fire departments will not be immune. Public safety accounts for close to 75% of the city’s general fund budget.

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