San Bernardino Is Third California City to Opt for Bankruptcy

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http://www.sfgate.com/business/bloomberg/article/San-Bernardino-Is-Third-California-City-to-Opt-3698752.php

July 11 (Bloomberg) -- San Bernardino’s City Council voted to become the third California city this year to file for bankruptcy, as it struggles with declining tax revenue, growing employee costs and accounting discrepancies in its ledgers.

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Penman said during the meeting that former city employees had understated the extent of San Bernardino’s fiscal woes in “falsified” reports to the council and mayor over the past 16 years. He declined to name anyone. Mayor Patrick Morris, who took office in 2006, said it was the first time he’d heard such allegations.


“This is a wholesale indictment of all of the officials who have served over a number of years,” Morris said in an interview after the meeting. “It’s new information to me.”

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San Bernardino County and neighboring Riverside County form a metropolitan area that had the third-highest foreclosure rate in the U.S. in May, according to RealtyTrac Inc., an Irvine, California-based data provider. The area’s unemployment rate was 11.8 percent that month, compared with 8.2 percent nationwide, according to U.S. Labor Department data.