San Bernardino Seal

By Ryan Hagen, The Sun
Posted: 07/31/16 – 6:57 PM PDT |

SAN BERNARDINO >> One of the nation’s longest municipal bankruptcies begins its fifth year on Monday And it’s probably its last, officials say.

San Bernardino filed for bankruptcy protection Aug. 1, 2012, swamped by a deficit of more than $45 million — equivalent to 40 percent of the $112 million in revenues the city expects this year — and fearing it wouldn’t be able to make payroll unless a bankruptcy judge stopped creditors from collecting their debts.

That protection isn’t cheap: From 2012 until May 2016, the city spent $18.8 million on bankruptcy-related expenses — attorneys and consultants — according to one of those consultants, Teri Cable of Management Partners.

“The estimate for the current fiscal year, from July 2015 through May 2016, was $6.2 million,” Cable said, “which identifies that a lot of the work has been done in this last year and there’s been an awful lot of progress made on that.”

As a mark of the length of the bankruptcy, voters have replaced most of the city’s elected officials — the mayor, the city attorney, four of the seven City Council members — since the bankruptcy filing, and newcomers fill the top unelected positions as well.

Councilman Fred Shorett is among the few who was on the dais then and now. He says 2016 is better.

“I see us in much better shape,” Shorett said. “We balanced our budget, albeit with some deferrals. We have good new projects coming in, like the Carousel Mall. … We’re still stretched very thin with our staff, and (City Manager) Mark Scott continues to remind us of that, but we’re going to continue to build that back up. I’m optimistic about the future of San Bernardino.”

The first of three California cities to file for bankruptcy in relatively quick succession, Vallejo ended its time in Chapter 9 in 2011 — after less than three and a half years.

Stockton, which filed just before San Bernardino, ended its Chapter 9 status after 28 months.

Detroit took less than 16 months.

Several of San Bernardino’s creditors have criticized its pace over the years, but now an end date is in sight.

Ballots for creditors to vote on the city’s bankruptcy plan were set to be mailed Friday, giving creditors until Sept. 2 to object and the city until Sept. 30 to respond to those objections.

U.S. Bankruptcy Judge Meredith Jury scheduled a confirmation hearing — the final stage of bankruptcy — for Oct. 14.

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