San Bernardino is 3rd California city to file for bankruptcy

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Associated Press

Published: Thursday, July 12 2012 12:15 a.m. MDT

San Bernardino, Calif. voted to file for Chapter 9 bankruptcy this year, joining the ranks of two other California cities that have sought after court protection.

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SAN BERNARDINO, Calif. — The City Council in San Bernardino voted Tuesday night to seek Chapter 9 bankruptcy protection, making it the third California city in less than two weeks to make the rare move.

The Southern California city of about 210,000 people will also become among 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 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 faces 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.

Four council members voted for the authorization, two opposed it and one abstained.

It was not immediately clear when the city planned to file.

Before Stockton, a California city had not filed for bankruptcy since Vallejo in 2008.

Now, with Mammoth Lakes also voting to declare Chapter 9, the state has seen three in two weeks.

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