San Bernardino Files For Bankruptcy, City Officials Falsified Budget Reports For Nearly 16 Years

San Bernardino and its population of more than 200,000 people has become the second-largest city in the United States to file for bankruptcy.

City officials chose this week to enter into Chapter 9 bankruptcy protection during a highly debated Tuesday night vote.

With a population of 210,000 people only the city of Stockton (300,000 citizens) has filed a larger bankruptcy claim. Stockton filed for bankruptcy protection on June 28. Also filing this year in California was the city of Mammoth Lakes which filed on July 3.

In explaining San Bernardino’s need to file Interim City Manager Andrea Miller said:

“We have an immediate cash flow issue.”

Miller claims the city has a budget shortfall of $45.8 million and has already stopped paying some of its vendors. Miller also claims that the city won’t be able to make payroll over the next three months.

Four council members votes yes to the bankruptcy while two opposed the measure and the final member abstained.

Councilwoman Wendy McCammack told the San Bernardino Sun:

“This is probably the hardest decision this councilwoman will ever have to make in this chair.”

The city fell into disarray after 13 budgets in the last 16 years were falsified to show the city running on a surplus when it fact it was losing money. Abstaining council member John Valdivia said based on falsified budgets he still didn’t trust the current financial state of San Bernardino, noting:

“The taxpayers of this city have been duped, hoodwinked and misguided for the past several years.”

Before Stockton filed in June of this year no other California city had filed for bankruptcy protection since Vallejo in 2008.

It’s not really shocking that San Bernardino and other California cities have been forced into bankruptcy, at the time of the housing market collapse the state had the highest cost of living in the United States with some modest one and two bedroom homes selling for upwards of $1 millions, homes that in other parts of the country would be unlikely to fetch $125,000.

Do you think San Bernardino should be grant bankruptcy protection given its repeated budgetary lies over the last 16 years?