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BERNARDINO, Calif. - (Mealey's)
The San Bernardino City Council on July 18 voted 5-2 to declare a fiscal
emergency, which allows it to file Chapter 9 bankruptcy without first
negotiating with its creditors. City officials said they expect to file a
petition in the next 30 days.
The two councilmen who opposed the motion to declare a
fiscal emergency are John Valdivia, representative for the city's Third Ward,
and Chas A. Kelley, who represents the Fifth Ward.
The city has a population of 211,000.
On July 10, the City Council took a preliminary vote to
move toward Chapter 9 bankruptcy.
The vote taken last night comes after city officials,
including the finance director, issued a report indicating that the city was
facing insolvency and that its expenditures were projected to exceed revenues
by $45 million.
Moreover, the report said that between $10 million and
$16 million in annual revenue had stopped in recent years as property values
Despite a 20 percent reduction in the city's workforce
over the last four years, San
Bernardino did not have enough money on hand to meet
its obligations, according to the report.
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