(July 12) SAN BERNARDINO –The city of San Bernardino, which last year filed for bankruptcy protection but has since had to fend off persistent requests by city employee unions and the state pension system to which those employees belong that the city remain current on payments to them, has made a motion before the bankruptcy court for summary judgment on its bankruptcy case.
Attorneys for the California Public Employee Retirement System and the middle managers represented by the San Bernardino Public Employees Association have lodged objections to the city’s pendency plan, which defers payments to the city’s creditors while the city is working to restore solvency. For a full year, the city suspended payments it was contractually committed to make into the state employees’ retirement system, withholding over $14 million.
On no fewer than six occasions since the bankruptcy filing in August 2012, the city attorney’s office and its hired team of bankruptcy law specialists have had to respond to objections by the lawyers for both the California Public Employee Retirement System and the San Bernardino Public Employees Association.
One recurrent theme in the protests is that the city’s financial responsibility to the pension fund and its employees trumps the claims of all other creditors. Another theme is that the city’s financial position is not as dire as city officials, the city attorney’s office and the city’s bankruptcy attorneys maintain.
City attorney Jim Penman, however, insists that the city is truly foundering and that it has no choice but to adhere to a meticulously laid out operating and spending plan if it is to map its way out of the economic abyss it has fallen into.
The city’s legal team has accordingly made a motion for summary judgment which requests that Bankruptcy Judge Meredith Jury determine that the city is eligible for blanket bankruptcy protection, rejecting further requests by the California Public Employee Retirement System, the San Bernardino Public Employees Association and any others that the city be forced to deviate from its pendency plan, which entails the payment deferrals.
Penman asserts that the cost of responding to the legal objections to the bankruptcy plan is unduly expensive and is hurting the city’s effort to get back on its feet.
Judge Meredith Jury is due to rule on the motion August 28.