DIRTY POLITICS EXPOSED IN BANKRUPT CITY OF SAN BERNARDINO

For Immediate Release

Contact: Nicole Wolfe

(909) 886-2994 Ofc (909-277-3825) cell

Date: October 13, 2014

FOR IMMEDIATE RELEASE:       

DIRTY POLITICS EXPOSED IN BANKRUPT CITY OF SAN BERNARDINO

San Bernardino, California October 13, 2014 –Time for Change Foundation held a press conference on the steps of City Hall to expose the dirty politics, once again plaguing the bankrupt City of San Bernardino.  Concerned citizens, community activists, spiritual leaders and the homeless joined with Time for Change Foundation (TFCF) to demand that the City Council do at least what the community does for them, VOTE.  The community united in one voice for Honesty, Integrity and Transparency (HIT) within the city leadership holding signs declaring “Stop the Dirty Politics” and “Cheating is Bad for Business.” 

Kim Carter, Founder/Executive Director Time for Change Foundation, addresses
the crowd demanding an honest and transparent City Council.

TFCF, a local non-profit organization, and low income housing developer, dedicated to serving the disenfranchised, has been denied Federal Home Investment Partnership Funds designed to be administered through the City after winning a recent bid competition for their new low income housing development project.  “We won that competition fair and square. This is about the jobs that are going to be created in our community, it’s about the safe and decent housing that we are going to have in our community,” said Kim Carter, Executive Director and Founder of TFCF, “we’re not going to allow dirty politicians to rob us one more time.  We’re here today about the residents of San Bernardino who can’t afford to be cheated out of one more taxpayer dollar in our city.  We need investments in our community and that’s not going to happen if we keep allowing leadership to come in here and play dirty politics.  Is this city open for business or what?“San Bernardino is a city trying to rebuild itself.  No entity will be willing to come to San Bernardino to invest if the City does not hold to the competition process.

The community, along with the hardworking staff at TFCF want answers.  If the City Council went through the pretense of soliciting proposals, having the proposals analyzed by a Proposal Review Committee, publicly declaring a winner, and writing a Resolution to award the funds, the least the City Council can do is VOTE!  Today, the community called for the City Council to place the project item back on their agenda and to VOTE, publicly, yes or no.  The community is calling for the matter to be moved forward according to the democratic process which has been set in place for the orderly conducting of business.

Sergio Luna of Inland Congregations United For Change (ICUC) asserted “this is a fight that every single person in San Bernardino should take…we at ICUC we are standing with Time for Change in every way possible…we will continue to collaborate until we find justice in our community.”  Reverend Bronica Taylor was passionate, declaring “we are the people. It is our vote that can truly make the change. “

HERE ARE THE FACTS:

 üan open bid competition RFP was released by the City for the purpose of low income housing development

 üa Proposal Review Committee declared TFCF the agency scoring the highest in the  competition

 üthe Mayor and City Council issued a Resolution stating the funds had been identified and were available

 üthe Resolution authorized the City Manager and City Attorney to negotiate terms of the development project

 üthe Resolution was placed on the City Council agenda 9/15/14 and then removed

 üthe Resolution was placed on the City Council agenda 10/6/14 and then removed

Concerned community members gather on the front of City Hall steps in support
of Time for Change Foundation.

No one within the City government will publicly state why this development project is not moving forward in the normal course of business.  The community, attempting to pull out of bankruptcy, has been disappointed once again because of the lack of Honesty, Integrity and Transparency within the new leaders they voted into office.  How can you ask people to vote for you during reelection time when you are sitting in the seat and not living up to the promises of openness, transparency and accountability?  If the City was truly moving forward, the transparency and accountability would be obvious.  Kim Carter reiterated: “This is not about me, this is about the process which is honest, integrity filled and transparent … a healthy competition.  Is any business safe to come here and enter a competition only to be awarded but not rewarded? No one likes a “cheater!” 

The next City Council meeting will take place October 20, 2014 and the public was encouraged to attend and demand answers from public officials, from the dais, in that public forum.  TFCF put the matter publicly to the City Council to place the development project item back on the agenda and for every member to publicly vote to approve or disapprove.

###

Moody's warns bankrupt cities they must cut pension debts

Moody's Investors Services, a major bond rating house, warned Thursday that if bankrupt California cities don't reduce their pension obligations, they risk returning to insolvency.

The warning was aimed directly at two bankrupt cities, Stockton and San Bernardino, but Moody's cited the experience of Vallejo, which emerged from an earlier bankruptcy without reducing its pension debt and is once again facing fiscal turmoil.

"In California, particularly for municipalities with pensions under the California Public Employees Retiree System, or CalPERS, bondholders will likely continue to pay a steep price if bankruptcies remain venues for restructuring debt obligations but pension liabilities remain untouched," Moody's Vice President Gregory Lipitz said in a special report on the California situation.

Stockton did not seek to reduce its pension obligations, despite pressure from other creditors, and has nearly concluded a deal with creditors on a recovery plan.

San Bernardino is still in the mediation process with creditors, but has indicated that it may seek pension modification.

CalPERS backed Stockton's approach to bankruptcy but has been fighting San Bernardino's bankruptcy petition, contending that under California law, public employees' pensions are contracts that cannot be involuntarily "impaired."

No California bankruptcy judge has ruled on whether pensions can be altered but the judge in Detroit's multi-billion-dollar bankruptcy has said that pension obligations are debts that may be subject to modification like other debts.

"Vallejo substantially restructured its compensation structure, including significant cuts to retiree health care benefits, but by failing to address its pension liabilities it remains vulnerable to increasing annual payments," Moody's Tom Aaron, the co-author of the report, said in a statement.

Moody's warned that "Vallejo now faces the risk of a second bankruptcy if its finances continue to degrade. In its budget message the city stated it has a "well below fiscally prudent reserve level" of 5 percent of expenditures and that by (fiscal year) 2015 its budget deficit could reach $8.9 million without corrective measures."

Categories: Pensions

Read more here: http://blogs.sacbee.com/capitolalertlatest/2014/02/moodys-warns-bankrupt-cities-they-must-cut-pension-debts.html#storylink=cpy

Judge Allows California City to Enter Bankruptcy, Largest Municipality to go Bust

Stockton, Calif., became the most populous city in the nation to go broke Monday, after a judge accepted the city's application to enter bankruptcy. 

In the closely watched decision, U.S. Bankruptcy Judge Christopher Klein said the bankruptcy declaration was needed to allow the city to continue to provide basic services. He determined Stockton would not be able to perform "its obligations to its citizens on fundamental public safety as well as other basic government services without" the protections provided under bankruptcy proceedings. 

Stockton was facing a $26 million shortfall when it filed for bankruptcy last summer, the result of the housing bust and soaring pension obligations. After cutting a quarter of their police force and other city services to the bone, officials argued bankruptcy was their only option. 

The city of nearly 300,000 people has become emblematic of government excess and the financial calamity that resulted when the housing bubble burst. 

Its salaries, benefits and borrowing were based on anticipated long-term developer fees and increasing property tax revenue. But those were lost in a flurry of foreclosures beginning in the mid-2000s and a 70 percent decline in the city's tax base. 

The city's creditors wanted to keep Stockton out of bankruptcy -- a status that would likely allow the city to avoid repaying its debts in full. 

They argued the city had not cut spending enough or sought a tax increase that would have allowed it to avoid bankruptcy. 

Matthew Walsh, an attorney for the bond holders, declined to comment after Monday's ruling. 

Attorneys for the city said the city's budget and services had been cut to the bone. 

"There's nothing to celebrate about bankruptcy," said Bob Deis, Stockton's city manager. "But it is a vindication of what we've been saying for nine months." 

The Chapter 9 bankruptcy case is being closely watched nationally for potential precedent-setting implications. 

The $900 million that Stockton owes to the California Public Employees' Retirement System to cover pension promises is its biggest debt. So far Stockton has kept up with pension payments while it has reneged on other debts, maintaining that it needs a strong pension plan to retain its pared-down workforce. 

The creditors who challenged Stockton's bankruptcy petition are the bond insurers who guaranteed $165 million in loans the city secured in 2007 to pay its contributions to the CalPERS pension fund. That debt got out of hand as property tax values plummeted during the recession, and money to pay the pension obligation fell short. 

Legal observers expect the creditors to aggressively challenge Stockton's repayment plan in the next phase of the process. 

By 2009 Stockton had accumulated nearly $1 billion in debt on civic improvements, money owed to pay pension contributions, and the most generous health care benefit in the state -- coverage for life for all retirees plus a dependent, no matter how long they had worked for the city.