September 1, 2014
SAN BERNARDINO, Calif. (AP) - The city of San Bernardino has declared a fiscal emergency to avoid a lengthy mediation process and head straight to federal bankruptcy court.
The City Council voted 5-2 on Wednesday to declare the emergency and file for Chapter 9 bankruptcy protection amid a dire cash crunch that has officials worried San Bernardino can't meet payroll in August.
The vote could make the city of 210,000 people the third in California to seek bankruptcy protection since last month, following Stockton and Mammoth Lakes.
The city is facing a $45.8 million budget shortfall this year.
Gwendolyn Waters, a spokeswoman for the city manager's office, says the announcement of the bankruptcy plan has further stressed San Bernardino's finances by prompting a dozen employees to retire and vendors to demand cash instead of credit.
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