A billboard featuring the San Bernardino mayor and city council members (photo: Gabriel Luis Acosta, San Bernardino Sun)
San Bernardino, already tiptoeing through a bankruptcy minefield strewn with combustible bondholders and pension fund managers, is now edging toward a mass recall at City Hall.
San Bernardino Residents for Responsible Government wants to recall Mayor Pat Morris, City Attorney James F. Penman, City Clerk Gigi Hanna and all seven council members for their role in the city’s financial collapse. The Southern California city of 209,000 declared bankruptcy in July 2012, facing a budget shortfall of $45.8 million.
The declaration of bankruptcy was controversial and unlike Stockton, which was approved for bankruptcy protection April 1, San Bernardino’s case has languished in dispute. Holders and insurers of $50 million worth of bonds issued by San Bernardino have demanded that the city gut municipal services, raise taxes and forego payments to the California Public Employees’ Retirement System (CALPERS).
After initially halting the CALPERS payments, the city resumed them but refused to reimburse the pension fund for the months it had missed. CALPERS opposed the bankruptcy and is demanding the money.
San Bernardino officials claimed the city had just $4.2 million on hand in January and couldn’t make the $1.2 million biweekly payments to the pension fund, much less pay back bondholders. But last week, CALPERS argued in court that the city actually had $26.8 million. According to Reuters, the fund based its assessment on a legal declaration made last month by a financial consultant who has been hired by the city to manage the bankruptcy.
The next court hearing is June 5.
While the city continues to negotiate with creditors and CALPERS and maintain a semblance of city services, the recall group launched its drive a few weeks ago. The deadline for gathering signatures is July 15 and measure would be on the November ballot if it qualifies.
The recall group had to delay filing their request to pursue signatures because, as of Monday, they had not been able to serve Councilwoman Wendy McCammack with the required legal papers. The group claimed she has ducked them 15 or 20 times over the last two weeks. McCammack, who is reportedly thinking about a mayoral run, denied that.
The city attorney says the businessmen bankrolling the recall are the same businessmen who ran city government before and ran it into bankruptcy. Those seeking the recall claim a clean slate of public officials is necessary to move forward.
But underlying the claims and counterclaims of competence, blame and political posturing are fundamental questions about public vs. private control of municipal services and assets in the government’s daily functions and bankruptcy negotiations.