“Duped, hoodwinked, and misguided…” describes a lot of local governments who promised tax payers so much and ended up saddling them with massive debt. The culprits in this bankruptcy appear to be the same as Stockton: payroll, pensions, bondholders and vendors.
San Bernadino (pop. 210,000) became the 3rd city in California to file for bankruptcy protection in the last 2 weeks.
Stockton (pop. 300,000) and the small town of Mammoth Lakes previously filed under Chapter 9.
Fox News:
The Southern California city of about 210,000 people will also become the second largest in the nation ever to file for bankruptcy. Stockton, the Northern California city of nearly 300,000, became the biggest when it filed for Chapter 9 on June 28. The much smaller city of Mammoth Lakes voted for bankruptcy July 3.
San Bernardino’s City Council directed the city attorney to make the move during a meeting where administrators explained the dire fiscal circumstances and urged them to choose the bankruptcy option.
“We have an immediate cash flow issue,” Interim City Manager Andrea Miller told Mayor Patrick Morris and the seven-member City Council, according to the Los Angeles Times.
Miller said the city is facing a budget shortfall of $45.8 million. It has already stopped paying some vendors, and may not be able to make payroll over the next three months.
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