San Bernardino County Sun
SAN BERNARDINO, Calif. — A full-court press by the city’s administrators, consultants and allies from the community convinced six of the seven council members Monday that it was vital to pass the Plan of Adjustment, pushing the city into the next stage of its nearly three-year bankruptcy.
The vote, with Councilman John Valdivia opposing, comes in advance of a May 30 court-imposed deadline that U.S. Bankruptcy Judge Meredith Jury said she would extend only if “the earth moved” under the city.
But it isn’t the final word on the cutbacks and other changes included in the Plan of Adjustment — creditors still will be able to object to its provisions, and the city will continue negotiating to try to avoid that expensive litigation, City Attorney Gary Saenz said Monday. He and other city officials say they hope U.S. Bankruptcy Judge Meredith Jury will confirm the plan in about a year.
With City Hall’s council chambers nearly full of residents and others pushing both for and against the plan’s passage, there was general agreement that it was a historic day.
“I, no different from the people in this room, value this moment as part of what will become your legacy in great history,” said county Supervisor Josie Gonzales, who represents much of the city of San Bernardino. “... Do not think of yourselves today. Think of 25 or 30 years in the future and let it be said that on May 18, 2015, the leadership of San Bernardino was strong, and honest, and ready to introduce the future.”
The opposing side — which argued, particularly, that outsourcing fire could be disastrous and that outsourcing refuse services was unfair and unhelpful — was summed up by resident Scott Olson.
“Today is the day the City Council committed suicide for San Bernardino,” Olson said before the vote, which he predicted would be in favor of the Plan of Adjustment.
Major components of the plan have been proposed before, by the consulting firm that prepared much of the Plan of Adjustment and by current and past city leaders, but proved controversial and unsuccessful.
Those proposals — particularly outsourcing the Fire Department — received strong opposition Monday, too.
But the city, which faces a May 30 deadline to submit some form of a Plan of Adjustment, must move forward with the plan, officials said.
The move toward outsourcing did not come without warning.
The City Council authorized City Manager Allen Parker in August to seek bids from public and private agencies that might be interested in providing fire services from the city. A May 5 meeting for interested parties drew representatives from San Bernardino County Fire Department, Colton Fire and a private company called Centerra Group.
The city’s Plan of Adjustment was released to the public Thursday, detailing proposed reductions to creditors — including the investors who hold nearly $50 million in pension obligation bonds, whose principal is slated to be reduced to only $500,000 — and internal changes that the city’s consultants and others say will allow it to deliver services for less.
Employees are a priority over outside groups, City Attorney Gary Saenz said earlier, because the city wants to ensure it can keep a workforce.
That’s the reasoning behind agreeing to pay the California Public Employees’ Retirement System everything the city owes them — about $14 million — which is included as part of the plan. That’s one of the only creditors not to be substantially impaired in the city’s plan.
The plan was reviewed Saturday by a “core group” of citizens chosen to represent various communities in the city, many of whom spoke in its support on Monday.
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