The San Bernardino, Calif., City Council voted Monday to ask the Sheriff's Department how much it would cost to outsource policing services, a decision opposed by most of the more than 20 residents and officers who spoke.
But it's time to make tough decisions, the council majority said, in a meeting heavily shadowed by the threat of losing bankruptcy protection after a tense hearing in U.S. Bankruptcy Court in Riverside that morning.
City Attorney James F. Penman and Mayor Pat Morris, who attended the hearing along with Councilwomen Wendy McCammack and Virginia Marquez, repeatedly warned of the dire consequences of not demonstrating the city's seriousness about balancing its budget.
"If we can't get into bankruptcy court and the protection provided by Chapter 9 we will have no city," Morris said.
The decision would give the sheriff six to 12 months to prepare a set of detailed cost analyses, but in general the same officers would be employed for roughly the same pay, Penman said, based on a meeting with sheriff's officials. That would have to be followed by a citizen vote to amend the charter, which would otherwise block the outsourcing.
Normally, Penman said, he also would strongly oppose the move.
"My hat is off to the men and women of our police department... I've always strongly opposed outsourcing," Penman said, but bankruptcy protection is vital. "(Without bankruptcy protection), our creditors will descend on us like ants on a jelly sandwich."
Morris said he wasn't sure whether outsourcing was the right decision, but it was vital to at least look at the numbers.
Four members of the council agreed. Councilmen Robert Jenkins, John Valdivia and Chas Kelley opposed the motion.
Judge Meredith Jury said in court that city needed to file a brief by Nov. 30 arguing to eliminate or consolidate many of the reasons creditors had said the city wasn't eligible for bankruptcy.
That's part of
an extended timeline asked for by the city's bankruptcy attorney, Paul Glassman of Stradling Yocca Carlson & Rauth, but it might be tough for the city to meet.
City officials present at the court hearing said they didn't expect the city's pendency plan -- a more complete version of budget plans that have cut the projected deficit from $45.8million to $16.03million -- to be ready before Nov. 30, as had originally been expected.
And without that, Jury said, it may be difficult for the city to prove it's serious about adjusting its debts -- a requirement for cities to get bankruptcy protection.
"I think the city leaves itself open to exposure if it doesn't get a pendency plan soon," Jury said, saying that she wouldn't give the city another extension. "You'd better have a good idea what it's going to say (to include in the Nov. 30 filing)."
The two creditors who filed what Jury called substantial objections to the city's bankruptcy -- CalPERS and the union representing middle managers, the San Bernardino Public Employees Association -- must respond by Dec. 14, and the parties will appear in court again Dec. 21.
The city had also sought to limit discovery -- creditors' right to request documents and other information before the trial -- until the court agreed what issues would be part of the eligibility battle, saying that producing records that may prove unnecessary would be time-consuming and costly at a time when the city has limited staff and heavy workloads.
Jury said Glassman made a good argument, but she wouldn't impose a stay. CalPERS' attorney said he would try to cooperate with the city, but he wouldn't agree to tie his hands, especially given his mistrust of city officials.
"I think (Glassman) has a client that provides misinformation... and may intentionally provide false information," said Michael E. Lubic, attorney for the pension system, noting that the city is getting attention from the Securities and Exchange Commission, sheriff's investigators and others.
"The city does need outside oversight. There does need to be transparency, and we don't have it."
Lubic said the city had given him the impression it would continue making payments to CalPERS, which the city stopped at the time it filed for bankruptcy Aug. 1 because they said they couldn't afford the payments. He said he understood the law to state that only employees should be paid before CalPERS.
Glassman said Lubic's statement that he didn't know the city was deferring CalPERS payments was "not credible."
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