Workers Fleeing San Bernardino in Droves Since Bankruptcy

March 23, 2013 – In The News
Inland Valley Daily Bulletin

City Council’s decision to file for bankruptcy protection in San Bernardino has caused many maintenance workers to interview for jobs in neighboring cities not struggling with the same fears. In the aging, high-crime city that had already laid off more than 250 workers in the four years before its July announcement that bankruptcy was unavoidable, the signs of cutbacks are everywhere.

That kind of exodus is hard to turn around, according to Michael Sweet, a bankruptcy and restructuring lawyer at San Francisco-based Fox Rothschild, but it isn't unusual.

I'm not surprised that people are looking for employment elsewhere," Sweet said. "There's uncertainty about what the future holds for city employees in San Bernardino, there are fewer people doing the same number of tasks, plus you have the added layer of the bankruptcy, so at least the financial folks, in addition to their day-to-day job, are having to deal with requests for info about the bankruptcy, so it's stressful."

The city's creditors are more skeptical, though, pointing to document requests they say are responded to late or insufficiently as a sign the city might not be eligible for bankruptcy protection - which would force the city to disincorporate if bankruptcy Judge Meredith Jury agreed, city officials say.

Representatives of the California Public Employee Retirement System say the city has been increasingly responsive in recent weeks, and city officials expect some combination of hiring and outsourcing to give the city the financial support it needs without overly straining the city's finances.

Those facing the city in bankruptcy court will be watching closely.