San Bernardino Seal

The city of San Bernardino was in court on Wednesday to hear a decision on the Chapter 9 bankruptcy eligibility.

By Ryan Hagen, The Sun
Posted: 08/29/13, 7:19 PM PDT | Updated: 10 hrs ago

SAN BERNARDINO >> The relief city officials felt when a federal judge granted them bankruptcy protection on Wednesday didn’t last long before that same judge and many of their constituents asked a pressing question: Now what?

Now, they’re in a 45-day race to come up with a rough draft of a plan to start satisfying the city’s creditors and balancing a budget that currently is only “balanced” by not paying much of what is owed.

While U.S. Bankruptcy Judge Meredith Jury didn’t order that timeline, her suggestion carries particular weight because the California Public Employees’ Retirement System had alleged that the city was in bankruptcy court for the purpose of delay — and therefore should be ineligible for Chapter 9 protection — and she told the city’s bankruptcy attorney the timeline he proposed seemed unreasonably slow.

Many of the policy-makers who attended the court hearing in Riverside say they feel a sense of urgency as well as the knowledge that painful cuts will likely be part of the city’s longterm plan.

“The important work, the heavy lifting, starts now on this matter of our bankruptcy,” Mayor Pat Morris said Thursday, “because we have to come up with a plan of adjustment, and the judge has made clear that she wants this done sooner than later.”

The city manager and financial consultants are working on a plan now and should have that rough draft complete in about 45 days, he said, although much of the information needed for it will have to be estimated because specifics aren’t available to the city.

Morris and a few other officials agree on some outlines of that plan: It will be painful, it should be negotiated with creditors and hopefully pay them all of what they’re owed, and it must be focused on rebuilding for the future.

But Councilwoman Wendy McCammack said she was worried by the lack of signs of progress on the plan.

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