San Bernardino Seal

By Ryan Hagen, The Sun
Posted: 06/30/14, 9:17 PM PDT | Updated: 30 secs ago

SAN BERNARDINO >> The city passed its budget for the 2014-15 fiscal year Monday night, three hours before the year began.

The 5-2 vote — Councilmen John Valdivia and Benito Barrios opposing — came after warnings on one hand of disastrous effects in bankruptcy court if a full budget wasn’t passed by that deadline, and on the other of dire threats to the city from cuts contained in the budget.

Mayor Carey Davis praised the budget as paving a path out of bankruptcy.

“The Council recognized the importance of showing our creditors, voters and business owners that we are capable of managing the City of San Bernardino within our means,” Davis said in a prepared statement. “…This was a painful budget for many, but this is a major step in making the City a better place to live and work. We thank the people of San Bernardino for trusting this Council to best position us for the future.”

Failure to pass a balanced budget for the full year would have fed into bankruptcy creditors’ arguments to Judge Meredith Jury that the city is woefully disorganized and gets things done only when it’s up against an intractable deadline, argued the city’s attorneys.

“Approval of the city’s 2014-15 budget … tonight (is) in my view, is a critical and necessary step,” said Paul Glassman, the city’s lead bankruptcy attorney, who doesn’t normally attend council meetings. “The city has been in bankruptcy for more than two years. There is a growing sense of urgency. Creditors want the case to move forward, and I’m sure the citizens want the case to move forward.”

That’s the argument City Attorney Gary Saenz made a week ago, when the council — uneasy with the proposed cuts and the lack of written explanations before the meeting — decided at what was intended to be its final budget hearing to reschedule for Monday night.

The city’s slow progress in bankruptcy court relative to other cities in Chapter 9 has become a common theme among its creditors, with Jury showing some impatience herself, and police union attorney Ron Oliner asked at the last hearing for her to set a deadline by which the city must form a plan of adjustment or lose bankruptcy protection.

But closing a fire station and making other cuts to the Fire Department, as this budget calls for, would be worse, Barrios said.

“I can’t support this budget,” he said. “So we take a hit in bankruptcy court — but people are still alive.”

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