Among the growing number of entities itching to sue the city of San Bernardino are the San Bernardino Police Officers Association and the San Bernardino Professional Firefighters Association. Both, however, have been stymied in their litigious designs.
All existing lawsuits against the municipality were put on hold as a result of its August 1 filing for Chapter 9 bankruptcy protection in U.S. Federal Court in Riverside. As a further result, the filing of any other suits against the city have been stayed. Several of the city’s contractors, creditors, vendors, associated governmental adjuncts or employee representatives have considered asking or have already asked the U.S. Magistrate hearing the bankruptcy, Meredith Jury, to lift that stay so legal action against the city can proceed.
On March 12, the unions representing the city’s police officers and its firefighters gave indication they will seek leave to sue San Bernardino.
At issue is the police union’s contention that the union’s imposition of across-the-board city employee contracts last month violated California’s labor laws.
On January 28, a divided San Bernardino City Council declared negotiations with most of the city’s various bargaining units to be at an impasse and then voted to impose redrafted contracts on all city employees with the temporary exemption of police management.
Several of the city’s unions protested against the move, saying they were still in the process of making offers and counter-offers. City attorney Jim Penman said the city was on sound legal and procedural footing in unilaterally enforcing the salary and benefit cuts.
The city maintains that once all eight bargaining units are included in the contract adjustment regime, the city will realize savings of almost $26 million  annually from those employee pay and benefit reductions.
The city is wrestling with an “institutionalized” budget deficit which in 2012-13 is equal to $46 million less in income than expenditures. The $26 million in city staff-related reductions were part of a pendency plan submitted to Jury in November.
Police and fire union members, calling the terms in the new contracts “unbearable” and “draconian,” have declared their intention to seek an injunction blocking the salary and benefits cuts from going into effect.
In seeking Jury’s permission to pierce the veil of bankruptcy protection, the two unions will join the San Bernardino Public Employees Association, which represents many of the city’s line employees, and the California Public Employee Retirement System, which assert the city is abusing the federal bankruptcy process by seeking to defer payments to entities, such as themselves, that have under state law a priority claim on money available in the city’s general fund and other coffers.
While those owed money by the city are making those assertions, Paul Glassman, the city’s bankruptcy attorney, and James Penman, San Bernardino’s city attorney, have asserted that the deferrals in payments and concessions on the employee contracts are necessary components of the city’s pendency plan, without which the city cannot find its way out of its financial crisis.
In addition to the savings to be achieved by the employee benefit and payroll reductions, the city is asking for Jury to ratify deferring close to $35 million in debt over the course of 2012-13, with a similar suspension of its payments to creditors and vendors over the next couple of years, until such time as the city’s income again meets its expenditures and solvency is achieved.
Glassman said the pendency plan, in all of its intricacy “shows the city and city council’s resolve to do what is necessary in the Chapter 9 case.”
Jury scheduled a hearing to further discuss elements of the pendency plan for March 5 and a hearing the following day on a current motion by the San Bernardino Public Employees Association to lift the stay.