An Update: The Notices of Intention to Circulate Recall Petitions in the Proposed San Bernardino Recall 2013

I’m not sure why this was not posted at the time, but for historical interest, here is a post that supposed to appear in 2013.

By Michael Reiter, Attorney at Law

San Bernardino Residents For Responsible Government, the political action committee behind the proposed recall,  contacted me today regarding the last post on the Notices of Intention to Circulate Recall Petitions in the Proposed San Bernardino Recall for November 5, 2013.

The Petitions were drafted by Michael L. Allan, a Pasadena attorney.  The decision to use process servers was also his decision.  The rest of the petitions will be released to the public on Monday, as listed on their website.  They say they have not filed the petitions against Wendy McCammack and Rikke Van Johnson yet. San Bernardino Residents For Responsible Government says they are giving the office holders 14 days to respond to the petitions.

Per the Charter of the City of San Bernardino, Section 122:

Within seven (7) days after the filing of the notice of

intention, the officer sought to be recalled may file with the City Clerk an answer in

not more than 500 words to the statement of the proponents and if an answer is

filed, shall serve a copy thereof, personally or by certified mail, on one of the

proponents named in the notice of intention. At the time the proponents publish

the notice and statement referred to above, the officer sought to be recalled may

have the answer published at his/her expense. If the answer is to be published the

officer shall file with the City Clerk at the time the answer is filed a statement

declaring his/her intent that the answer be published. The statement and answer

are intended solely for the information of the voters and no insufficiency in the form

or substance thereof shall affect the validity of the election or proceedings. The

notice and statement as referred to above, and the answer, if it is to be published

shall be published at least once in a newspaper of general circulation, as described

in Sections 6000 to 6066 of the Government Code, adjudicated as such.

Seven (7) days after the publication of the notice, statement and answer, if it

is to be published, the recall petition may be circulated and signed.

The information you obtain at this blog is not, nor is it intended to be, legal advice. No attorney-client relationship is established by reading or commenting on this blog. You should consult an attorney for advice regarding your individual situation.

Milligan, Beswick, Levine & Knox, LLP
A: 1447 Ford St. #201
      Redlands, CA 92374
T: (909) 296-6708

The Roots of San Bernardino Charter Section 186: A Political Perspective In Two Posts

By Michael Reiter, Attorney at Law

As San Bernardino looks to review and possibly reform its existing charter, last adopted in 2006, this is one in a series looking back at how the City of San Bernardino arrived at this point.

In the last item, the voters of the City of San Bernardino approved (by three votes)  a charter amendment in 1939 that guaranteed minimum raises to certain members of the police department.

A more in-depth look at the political background is found elsewhere, including the political roots of Charter Section 181-A, and the fiscal effect of San Bernardino Charter Section 181-A on the 1939-40 fiscal year budget of the City of San Bernardino.

The information you obtain at this blog is not, nor is it intended to be, legal advice. No attorney-client relationship is established by reading or commenting on this blog. You should consult an attorney for advice regarding your individual situation.

Milligan, Beswick, Levine & Knox, LLP
A: 1447 Ford St. #201
      Redlands, CA 92374
T: (909) 296-6708

The Roots of San Bernardino Charter Section 186: Chapter One

By Michael Reiter, Attorney at Law

This is the first in a series of articles to help people understand the historic context in which section 186, which currently sets the rate of pay of sworn police and fire employees within the City of San Bernardino.

Before the 1955 adoption of section 186, the people of San Bernardino amended the Charter to include minimum police salaries.

A special municipal election (consolidated with a primary municipal election) was held on March 20, 1939 to vote on Proposed Charter Amendment Number One.

Proposed Charter Amendment Number One read:

It is hereby proposed that Article Ten of the City Charter of the City of San Bernardino, entitled “Police and Fire Departments,” be amended by adding thereto a new section, entitled “Section 181A,” said section to read as follows:

“Section 181A:

(a) That the minimum rate to be paid to the following classifications in the Police Department shall be as follows:

Regular Patrolmen, Relief Patrolmen, Traffic Patrolmen, Special Officers and Plain Clothes Officers–A minimum salary of $135.00 per month, said salary to be increased in the sum of $5.00 per month at the end of each six months’ continuous service until a salary of $175.00 is reached, which salary of $175.00 shall thereafter be the minimum salary to be paid said officer.

Desk Sergeants–A minimum salary of $190.00 per month.

Patrol Sergeants–A minimum salary of $190.00 per month.

Motorcycle Officers–A minimum salary of $155.00 per month, based on one year’s service as a Police Officer, said salary to be increased in the sum of $5.00 per month at the end of each six months’ continuous service, until a salary of $185.00 is reached, which salary shall thereafter be the minimum salary to be paid said officer.

Traffic Sergeants–A minimum salary of $200.00 per month.

(b) That the officer’s length of continuous service elapsing prior to the adoption of this provision shall be included in determining said minimum salaries.

(c) That said section shall not be construed to set out or limit the classifications of members of the Police Department, but is intended solely to establish a minimum rate of pay for those classifications herein referred to.”  Statutes of California, 1939, Chapter 38, Pages 3162-3163.

The results of the election were decided by absentee votes.  The Council canvassed the vote on March 27, 1939 and found: 5,264 votes in favor, 5,261 votes against.  The absentee votes ran 75 percent in favor and 25 percent against.

 

The information you obtain at this blog is not, nor is it intended to be, legal advice. No attorney-client relationship is established by reading or commenting on this blog. You should consult an attorney for advice regarding your individual situation.

Milligan, Beswick, Levine & Knox, LLP
A: 1447 Ford St. #201
      Redlands, CA 92374
T: (909) 296-6708

The Notices of Intention to Circulate Recall Petitions in the Proposed San Bernardino Recall 2013

By Michael Reiter, Attorney at Law

Below are four of the Notices of Intention to Circulate A Recall Petition, or at least unexecuted and undated versions.  The originals were in PDF format which were printed with the home addresses of the petition signers were crudely redacted using a Sharpie Magnum Permanent Marker, and rescanned into PDF.

City Attorney James F. Penman

The reasons for the recall are listed by Scott Beard, the proponent, Wendy McCammack’s appointment to the City of San Bernardino Planning Commission, Rialto-based developer, and Seventh Ward resident:

The grounds for the recall are as follows: Mr. Penman is the duly elected City Attorney, and as such is accountable for the actions of that office and of his subordinates. Mr. Penman has been derelict in his official duties by failing to properly enforce the law regarding personal use of public property by members of the Common Council. In addition, Mr. Penman’s office’s selective enforcement of City codes and his failure to timely update and codify city codes, ordinances, and other matters lawfully passed by the City Council has created confusion and insecurity in the City’s residents and businesses regarding accuracy of the City’s published law.

Council Member Virginia Marquez, First Ward

The reasons listed for the recall in the Notice of Intention are listed by the proponent, Christian Fernando Flores (who was reported in the Sun as a student at California State University, San Bernardino):

The grounds for the recall are as follows: Council Member Marquez was elected to office
in November of 2009 and has since that time has failed to protect the health, safety, and welfare
of the residents of the City of San Bernardino and demonstrated dereliction to the duties of her
elected office by making fiscally irresponsible votes and by supporting fiscally irresponsible
program leading to the misuse of the City’s General Fund. Council Member Marquez’s actions
and failures to act, have propelled the City of San Bernardino into financial crisis, and have led
to the filing for protection under Chapter 9 of the federal bankruptcy laws by the City. The City
of San Bernardino is currently the object of nation-wide ridicule as a result of the mishandling of
the bankruptcy and its proceedings.

Further, Council Member Marquez has violated the public trust by repeatedly failing to
reach consensus with the other members of the San Bernardino City Council on basic issues of
City finances, and ignored advice of the City’s Executive Staff for the previous two years
regarding financial concerns. Her actions have led to massive reductions in City services and
police and fire personnel, causing an increase in crime rates, businesses leaving the City, and
contributed to overall blight within the City.

Council Member Fred Shorret:

The proponent of the recall against Fred Shorett, 4th Ward Council Member, Stephen T. Dawson, who is the chairperson of the United  Transportation Union, states:

The grounds for the recall are as follows: Council Member Shorett was elected to office in March of 2009 and has since that time has failed to protect the health, safety, and welfare of the residents of the City of San Bernardino and demonstrated dereliction to the duties of his elected office by making fiscally irresponsible votes and by supporting fiscally irresponsible program leading to the misuse of the City’s General Fund. Council Member Shorett’s actions and failures to act have propelled the City of San Bernardino into financial crisis, and have led to the filing for protection under Chapter 9 of the federal bankruptcy laws by the City.
Further, Council Member Shorett has violated the public trust by repeatedly failing to reach consensus with the other members of the San Bernardino City Council on basic issues of City finances which would allow the City of San Bernardino to emerge from the bankruptcy proceedings and begin revival of its economy. The City of San Bernardino is currently the object of nation-wide ridicule as a result of the mishandling of the bankruptcy and its proceedings.

Mayor Patrick J. Morris:

Scott Beard, also the proponent of the recall against City Attorney James F. Penman, gives these reasons:

The grounds for the recall are as follows: Mayor Morris was elected to office in February of 2006 and has since that time has failed to protect the health, safety, and welfare of the residents of the City of San Bernardino and demonstrated dereliction to the duties of his elected office by failing to veto fiscally irresponsible votes and fiscally irresponsible programs leading to the misuse of the City’s General Fund. Mayor Morris’s [sic] failures to act have propelled the City of San Bernardino into financial crisis, and have led to the filing for protection under Chapter 9 of the federal bankruptcy laws by the City.
Further, Mayor Morris has violated the public trust by repeatedly failing to facilitate consensus with the members of the San Bernardino City Council on basic issues of City finances, and ignored advice of the City’s Executive Staff for the previous two years regarding financial concerns. His action and inaction have led to massive reductions in City services and police and fire personnel, causing an increase in crime rates, businesses leaving the City, and contributed to overall blight within the City.

The original PDFs, which are not the embedded redacted versions you see here, have some metadata that explains a little about the origin of the PDFs that were obtained. The Notice of Intent  involving Mayor Patrick J. Morris was created on April 28, 2013 at 10:04:50 PM, with the application being Microsoft Word 2010, with “Michael” listed as the author.  The Notice of Intent to Virginia Marquez  was titled C:\My Files000 — SanBernardinoMatter\NOI.2013.1stWard(Marquez).wpd, also authored by “Michael.”  It was created on April 28, 2013 at 2:19:17 PM.  The original file was on WordPerfect (as you can see by the extension), but the PDF was created by Acrobat Distiller 9.0.0. The Fred Shorret document was created by Microsoft Word 2010, also authored by “Michael.”  It was created on April 28, 2013 at 3:40:59.  The City Attorney James F. Penman document was also on Word 2010, on April 28, 2013, at 10:00:13.

What does this metadata mean?  That whoever created the PDF (but not necessarily the author of the petitions), was named Michael, and that at least one of the documents was created on WordPerfect.  WordPerfect is, or was, largely used by attorneys. No conclusions can be drawn from this metadata.  The Michael may refer to Michael McKinney, the Orange County-based publicist for the recall proponents.  It could be someone else entirely.

Unfortunately, the petitions to recall Second Ward Council Member Robert Jenkins, Third Ward Council Member John Valdivia, Fifth Ward Council Member Chas Kelley, Sixth Ward Council Member and Mayoral Candidate Rikke Van Johnson and Seventh Ward Council Member Wendy McCammack were unavailable.

The information you obtain at this blog is not, nor is it intended to be, legal advice. No attorney-client relationship is established by reading or commenting on this blog. You should consult an attorney for advice regarding your individual situation.

A: 300 E. State St., Suite 517
Redlands, CA 92373-5235
T: (909) 296-6708

The Recall Process Under the Charter of the City of San Bernardino

By Michael Reiter, Attorney at Law

The current Charter of the City of San Bernardino, Article VII is entitled “Initiative, Referendum and Recall.”  Section 122 of the Charter reads (with annotations):

Section 122. The Recall. Proceedings may be commenced for recall of the

holder of any elective office of this City and the election of a successor of the

holder sought to be removed by the service, filing and publication of a notice of

intention to circulate a recall petition. Such proceedings may not be commenced

against the holder of an office unless, at the time of commencement, the holder

has held office for at least ninety days and no recall petition has been filed against

such holder within the preceding six months. A petition demanding the recall of the

officer sought to be recalled shall be submitted to the City Clerk. The petition shall

be signed by not less than fifteen percent (15%) of the voters of the City, or in the

case of a City Council Member elected by ward twenty-five percent (25%) of the

voters of that ward, according to the County Clerk’s last official report of

registration to the Secretary of State. No signature may be affixed to the petition

until the proponents have served, filed and published a notice of intention to

circulate a recall petition, containing the name of the officer sought to be recalled

and the title of his/her office, a statement in not more than 500 words of the

grounds on which the recall is sought, and the name and address of at least one,

but not more than five proponents. The notice of intention shall be served,

personally or by certified mail, on the officer sought to be recalled, and a copy

thereof with a certificate of the time and manner of service shall be filed with the

clerk of the legislative body. Within seven (7) days after the filing of the notice of

intention, the officer sought to be recalled may file with the City Clerk an answer in

not more than 500 words to the statement of the proponents and if an answer is

filed, shall serve a copy thereof, personally or by certified mail, on one of the

proponents named in the notice of intention. At the time the proponents publish

the notice and statement referred to above, the officer sought to be recalled may

have the answer published at his/her expense. If the answer is to be published the

officer shall file with the City Clerk at the time the answer is filed a statement

declaring his/her intent that the answer be published. The statement and answer

are intended solely for the information of the voters and no insufficiency in the form

or substance thereof shall affect the validity of the election or proceedings. The

notice and statement as referred to above, and the answer, if it is to be published

shall be published at least once in a newspaper of general circulation, as described

in Sections 6000 to 6066 of the Government Code, adjudicated as such.

Seven (7) days after the publication of the notice, statement and answer, if it

is to be published, the recall petition may be circulated and signed. The petition

shall bear a copy of the notice of intention, statement and answer, if any. If the

officer has not answered, the petition shall so state. Signatures shall be secured

and the petition filed within ninety (90) days from the filing of the notice of intention.

If such petition is not filed within the time permitted by this section, the same shall

be void for all purposes. The signatures to the petition need not all be appended to

one paper; but each signer shall add to his/her signature his/her place of

residence, giving the street and such other identification as may be required by the

registration law. One of the signers of each such paper shall make oath before an

officer qualified to administer oaths, that the statements therein made are true, and

that each signature to the paper appended, is the genuine signature of the person

whose name purports to be thereunto subscribed. Within thirty (30) days after the

date of filing such petition the City Clerk shall examine and ascertain whether or

not said petition is signed by the requisite number of qualified electors and, if

necessary, the Council shall allow extra help for that purpose, and the City Clerk

shall attach to said petition a certificate showing the result of said examination. If,

by the City Clerk’s certificate, the number of signatures on the petition is shown to

be insufficient, it shall be returned forthwith by the Clerk to the filer(s) thereof who

shall have an additional thirty (30) days from the date the petition is returned to

them by the Clerk to obtain the required number of signatures. The City Clerk shall,

within thirty (30) days after such additional thirty (30) day period to obtain

additional signatures, make like examination of said petition, and, if his/her

certificate shall show the same to be insufficient it shall be void for all purposes. If

the petition shall be found to be sufficient, the City Clerk shall submit the same to

the Council without delay and the Council shall thereupon order and fix a date for

holding said election, not less than fifty (50) days, nor more than seventy (70) days

from the date of the City Clerk’s certificate to the Council that a sufficient petition is

filed.

The ballots used when voting upon said proposed recall shall contain the

words “shall (title of office and the name of the person against whom the recall is

filed) be recalled?” and the words “yes” and “no.”

The Council and the City Clerk shall make, or cause to be made, publication

of notice and all arrangements for conducting, returning and declaring the results

of such election in the same manner as other City elections.

Qualified candidates to succeed the person against whom the recall is filed,

shall be listed on the ballot, except that the incumbent shall not be eligible to

succeed himself/herself in any such recall election.

In any such removal election, if a majority of the votes cast is for “yes” on

the question of whether or not the incumbent should be recalled, the candidate

receiving the highest number of votes shall be declared elected. The incumbent

shall thereupon be deemed removed from the office upon qualification of his/her

successor. In case the party who received the highest number of votes should fail

to qualify within ten (10) days after receiving notification of election, the office shall

be deemed vacant. The successor of any officer so removed shall hold office

during the unexpired term of his/her predecessor. (Effective March 16, 2005)

Any elected official in the City of San Bernardino can be recalled using this procedure.  The limitations are stated above in which the office holder must be in office at least 90 days, and no recall petition has been filed against the office holder in the preceding six months.  The elected officials of the City of San Bernardino are the Mayor, the seven members of the Common Council, the City Clerk, the City Treasurer, and the City Attorney.

The Municipal Code further gives the procedure for recall elections as follows:

2.56.160 Recall elections.
A recall election to remove an elected officer pursuant to Charter Section
122 shall be ordered, held and conducted and the result thereof made known and
declared in the same manner provided in this chapter for municipal primary and
general elections except as follows:
A. Time for Obtaining Signatures. Nomination papers shall be issued and
verification deputies appointed to obtain signatures to nomination papers of
any candidate at any time not earlier than the thirty-fifth day nor later than
five p.m. on the twenty-ninth day before the recall election.
B. Date filed with City Clerk. All nomination papers shall be filed with the City
Clerk not later than five p.m. on the twenty-ninth day before the recall
election.
C. Not earlier than the thirty-fifth day, nor later than the tenth day before a recall
election, the City Clerk shall publish a notice of the election at least once in
one or more newspapers published and circulated in the City. The notice
shall be headed “Notice of Election,” and shall contain a statement of:
1. The time of the election;
2. The offices to be filled, specifying full term or short term, as the case
may be;
3. The hours the polls will be open.
D. Absentee Ballots. Not earlier than the twenty-sixth day, nor later than the
seventh day before a recall election, any voter entitled to vote by absent
voter ballot as provided in Elections Code Section 14620 [See now §3003],
may file with the City Clerk either in person or by mail, his written application
for an absent voter’s ballot. The application shall be signed by the applicant,
shall show his place of residence, and shall make clear to the City Clerk the
applicant’s right to a ballot.
Applications received by the City Clerk hereunder on or after the
fortieth day but prior to the twenty-sixth day before election shall not be
returned to the sender, but shall be held by the City Clerk and processed by
him following the twenty-sixth day prior to election in the same manner as
if received at that time.

(Ord. 3601 (part), 1976; Ord. 2048 §10, 1954.

The information you obtain at this blog is not, nor is it intended to be, legal advice. No attorney-client relationship is established by reading or commenting on this blog. You should consult an attorney for advice regarding your individual situation.

Milligan, Beswick, Levine & Knox, LLP
A: 1447 Ford St. #201
      Redlands, CA 92374
T: (909) 296-6708

“Attention San Bernardino Residents Important City Bankruptcy Information”

By Michael Reiter, Attorney at Law

“ATTENTION SAN BERNARDINO RESIDENTS IMPORTANT CITY BANKRUPTCY INFORMATION” reads the first page of a mailer from the San Bernardino Police Officers Association and the San Bernardino City Professional Firefighters.

The mailer is below (scanned with the back and front first, with the interior page below), and arrived August 4th in post :


The back of the mailer says:

SAN BERNARDINO’S FIREFIGHTERS AND POLICE OFFICERS STAND WITH THE RESIDENTS OF SAN BERNARDINO

Dear San Bernardino Residents,
San Bernardino’s Firefighters and Police Officers go to work each day
risking their lives and their safety to protect the lives and safety of the
City’s neighborhoods and families.
We’re in this together with you. We have your back- and we know you
have ours.
Mayor Pat Morris and his administration must be held accountable for
the failed policies that have driven San Bernardino into bankruptcy.
His failures cannot be excused.
Your tax dollars have been squandered.
Jobs have been run out of the City.
Vital city services needed to protect San Bernardino’s families are
facing devastating cuts that will threaten public safety.
We’re willing to do our part and make our fair share of sacrifice to help
the City balance its budget- just as we have for the last several years.
As the City moves forward into Bankruptcy Court we will keep you
informed to ensure that you have the facts about how San Bernardino’s
bankruptcy will affect you and your family.
We thank you for your continued support and are honored to serve you.
Yours truly,
SCOTT MOSS, President
San Bernardino City Professional Firefighters
STEVE TURNER, President
San Bernardino Police Officers Association
Learn more about the City’s Bankruptcy at
www.sanbernardinocitybankruptcy.com

Page Two continues:

WHY DID THE CITY OF SAN BERNARDINO
DECIDE TO DECLARE BANKRUPTCY?
The City claims to have a $45 million budget deficit that will prevent it from
paying its employees and the other bills it owes by the end of summer.-
WHAT CAUSED SAN BERNARDINO’S $45
MILLION BUDGET DEFICIT?
Mayor Pat Morris and his administration failed to make the tough choices
necessary to honestly balance the City’s Budget.
According to an outside independent expert, “San Bernardino faced years
of deficit spending. It’s structural gap, however, was covered-up instead of
addressed. The city sold assets, borrowed from city funds, borrowed from
banks and bondholders, used one year’s surplus to cover the following
year’s deficit, and raided its reserves.”
IS IT COMMON FOR A CITY TO
DECLARE BANKRUPTCY?
No, it’s very rare. Only one or two cities in the entire
nation declare bankruptcy each year. Recently the
cities of Stockton and Mammoth Lakes declared
bankruptcy, and Vallejo declared bankruptcy in 2008.
Vallejo has completed the bankruptcy process but the
financial benefits are unclear. Vallejo spent $13 million
of taxpayer money on legal bills and still does not
have a balanced budget.

Page Three says:

IS THE COST OF THE SALARIES AND PENSIONS
OF FIREFIGHTERS AND POLICE OFFICERS THE
CAUSE OF THE CITY’S BANKRUPTCY?
No. Pat Morris is falsely making this claim to hide the fact that his failures
to stop wasteful spending and balance the City’s budget have driven San
Bernardino into bankruptcy.
The truth is the San Bernardino City Charter, as approved by the voters,
protects taxpayers by limiting the salaries and benefits of the City’s
Firefighters and Police Officers.
Additionally, San Bernardino’s Firefighters and Police Officers have always
been willing to do their fair share to help balance the budget. They’ve
offered and accepted reductions to their pay and benefits for the last four
years that has saved the City millions of dollars.
Unfortunately Mayor Morris and his administration failed to use the money
from these savings to cut the deficit. Instead the money was used for
wasteful pet projects like the SBX line.
WILL BANKRUPTCY BE BAD FOR
SAN BERNARDINO?
The greatest risk bankruptcy poses to residents is in the area of job creation.
The decision to declare bankruptcy will likely make it more difficult to attract
job-creating businesses to the City because they will be afraid to invest in
San Bernardino.
That would likely result in an increase in San Bernardino’s already high
unemployment rate.

The information you obtain at this blog is not, nor is it intended to be, legal advice. No attorney-client relationship is established by reading or commenting on this blog. You should consult an attorney for advice regarding your individual situation.

A: 300 E. State St., Suite 517
Redlands, CA 92373-5235
T: (909) 296-6708

San Bernardino’s Fiscal Emergency Operation Plan Memo Dated July 23, 2012

By Michael Reiter, Attorney at Law

The City of San Bernardino recently released this memorandum.  The authors of the memorandum, dated July 23, 2012, are Interim City Manager Andrea Travis-Miller and Director of Finance Jason Simpson.  The memorandum is addressed to the Mayor and Common Council.

The summary on the first page says:

On July 18, 2012, the City Council directed the filing of a petition under Chapter 9 of the
United States Bankruptcy Code following the declaration of a fiscal emergency in the
City of San Bernardino. These actions were in response to findings that the financial
state of the City is such that the health, safety, and well-being of the residents of the
City will be jeopardized absent Chapter 9 bankruptcy protection.
This report proposes a Fiscal Emergency Operating Plan, which will enable the City to
operate while it is under Chapter 9 protection and includes recommendations for various
actions related to the City’s Preliminary FY 2012-13 General Fund Budget, which
combined will represent the City’s Financial Plan for FY 2012-13. This Fiscal
Emergency Operating Plan is necessary for the City to operate until the Pendency Plan
is developed under Chapter 9 and is presented for Council consideration as part of this
staff report.

This report covers the funding and operations of the City’s General Fund and does not
include any special purpose or restricted funds with the exception of capital projects.
The budgets for those funds will be provided to the Council by the end of August 2012.

Some other highlights:

From Page 2:

The Preliminary FY 2012-13 Budget has an operating shortfall of $45.8 million and does
not provide for any reserves nor does it address the estimated $18 million negative cash
balance in the General Fund. At Fiscal Year end, the negative cash is expected to grow
to $59.2 million in the absence of drastic measures to reduce the City’s obligations
through restructuring. The City’s financial situation is dire with no revenue or other
funding sources available to balance the City’s budget and address prior years’ deficits.

 

In bold, from Page 2:

The City must create a plan to emerge from this
fiscal crisis that is truly sustainable, with reliable ongoing revenues covering the
full operational costs, both direct and indirect, and sufficient reserves to weather
economic uncertainty, revenue fluctuations, and emergency spending
requirements.

From Page 3:

City staff will be reducing costs through the realignment of the organization and will
present a balanced budget for consideration by the Council during the coming weeks.
However, the actions to date have been insufficient and without further reduction of
costs through restructuring of obligations and severe service level reductions, the City
will be unable to adopt a balanced budget as required by the City’s Charter and the
State Constitution.

General Fund Negative Cash Balance of $18 million dollars as of June 30, 2012:

Overall, the balance of the City’s total cash and investment portfolio, as reported in the
most recent financial statements for the year ended June 30, 2012, (unaudited) was $27
million. Of this balance, 100% was held in restricted funds (assessment districts,
bonds, trust funds, special revenues, and tax measures), and the General Fund has a
negative cash balance of $18 million. While the City continues to hold investment
balances, the balances are from restricted sources not available for general operations.

City’s Unfunded liabilities of $296 million:

In addition to the City’s bonded indebtedness and lease obligations, unfunded liabilities
total approximately $296 million. Unfunded liabilities include unfunded pension
obligations of $195 million, retiree medical of $61 million, compensated absences of $20
million, general liability of $10 million, and worker’s compensation of $10 million.

Actions for the next three months:

The
remainder of the schedule details the actions proposed to be taken to meet the cash
flow needs of the City during this interim time frame. Measures proposed include:
1. Deferring debt and lease payments due in the First Quarter in the amount of
$3,556,972 until some later date. Debt and lease payments include payments for
Pension Bonds and Infrastructure Bank Loans.
2. Deferring the annual debt payment on the New World system in the amount of
$645,000.
3. Maintaining vacancies resulting in a savings of $531,000 per month in salaries,
$158,031 per month in PERS payments, $53,919 per month in health insurance
costs, and $9,200 per month in other benefit payments.
4. Continuing the employment concessions agreed to by the General Unit, Middle
Management Unit, and Management/Confidential Unit in the amount of
$2,994,764. The agreements with the Police Safety, Police Management, and
Fire Management have not expired, and there currently is no contract with the
Fire Union.
5. Deferring the ARC contribution for retiree health due in the First Quarter in the
amount of $2,219,332.
6. Deferring capital improvement projects for the foreseeable future.
Unfortunately, these measures are intended to enable the City to meet its obligations
over a 3-month period and will not result in a sustainable, balanced budget. City staff is
preparing a Pendency Plan which will serve as the budget until the bankruptcy court
approves a long-term Plan of Adjustment. Over the next 30 days, staff will work to
prepare a Pendency Plan that focuses the City’s limited resources on sustaining basic
service delivery, addressing contractual obligations, and establishing a fair,
compensation structure so the City can retain quality employees to provide essential
public services. The Pendency Plan will balance anticipated revenues against
expenditures through a restructuring of the organization and service delivery
necessary to reduce expenditures by roughly 30% of the Preliminary Budget.

The information you obtain at this blog is not, nor is it intended to be, legal advice. No attorney-client relationship is established by reading or commenting on this blog. You should consult an attorney for advice regarding your individual situation.

A: 300 E. State St., Suite 517
Redlands, CA 92373-5235
T: (909) 296-6708