San Bernardino Struggling To Balance Budget On Last Day of Fiscal YearJune 27, 2014 – In The News
Michael A. Sweet was quoted in the Debtwire article, "San Bernardino Struggling To Balance Budget On Last Day of Fiscal Year.” Full text can be found in the June 27, 2014, issue, but a synopsis is below.
The city council of San Bernardino will have a final opportunity to vote on a balanced budget for fiscal year 2015 on June 30.
Despite having reportedly settled with its largest creditor, the California Public Employees Retirement System (CalPERS), San Bernardino still has not proposed a plan of debt adjustment in its Chapter 9 bankruptcy, said Michael Sweet.
The bankruptcy proceedings, budget proceedings and the process of amending the city’s charter to repeal automatic raises to public safety personnel and give control of shift hours to the mayor and city council are all separate processes, Sweet said.
The judge presiding over the city’s bankruptcy can do little to force the city to pass a budget or amend its charter, according to Sweet, who noted the judge can only encourage the parties to negotiate and confirm or decline the plan once filed.
The charter and plan of debt adjustment are intertwined, however, in that the plan deals with paying off the city’s past debt but the charter determines how employees are paid in the future, Sweet said. “That is why the city needs to reach an agreement on both,” he said.