Chapter 9 Bankruptcy

Summary of the Recovery Plan Implementation Efforts (as of May 18, 2016)
Click here for a PDF version

The Recovery Plan rests on four key areas of change and improvement by the City, all aimed at improving the fiscal position of the organization. These four key areas are as follows:

a. Efficiency improvements – largely regionalizing or contracting for services
b. Debt and Other Post-Employment Benefits (OPEB) restructuring
c. New revenue and tax increases / extensions
d. Organizational improvements

Subsequent to adoption of the Recovery Plan the City has made diligent efforts to implement components of the Plan. The table below provides a summary of where the City currently stands with respect to the major elements of the Plan. This Table is based on Table 1 – Cost Savings and Revenue Enhancement Actions and Estimates (General Fund) in the May 2015 Recovery Plan. The table shows for each opportunity area the estimated economic benefit, a summary of actions taken towards implementation and the currently anticipated economic benefit either realized or planned. Of note is that implementation is complete or underway on all actions targeted for 2015. In addition, implementation of several elements targeted for 2016 are already underway. 

Update on Major Cost Saving and Revenue Enhancement Actions and Estimates (General Fund)

Cost Savings and Revenue Opportunities Estimated Ongoing (Annual) Savings unless otherwise noted Status 
Efficiency Improvements    
Regionalize or Contract fire and EMS services $7,000,000 – 10,000,000 Implementing – Council voted to annex into San Bernardino County Fire District. Local Agency Formation Commission (LAFCO) assessed and approved annexation, subject to conditions of approval, which included an annual parcel tax of $148.32, and protest hearing/votes. Less than 5% of landowners and registered voters submitted protest votes, moving the annexation forward to the implementation stage. Based on LAFCO and City estimates net economic benefit to the City ranges from $7.4 to $12.0 million annually of which approximately $7.4 million is expected to come from landowners new parcel tax contribution. The higher savings estimate includes resumption of payments for facilities maintenance, equipment replacement and overhead support eliminated from City budget.
Contract business license administration $650,000 to $900,000 Pending - Organizational analysis recommending moving function to Finance completed. RFP in development. Will be complete in 2016.
Contract fleet maintenance $400,000 Pending - 2016
Contract soccer complex management and maintenance  $240,000 to $320,000 Completed. The City has contracted for the operation of the complex by a private vendor effective October 1, 2015. Annual savings are estimated at $300,000. Private vendor has begun a $1M renovation and established a new National Premiere Soccer League team.
Contract custodial maintenance $150,000 Pending - 2016
Contract graffiti abatement $132,600 Pending - 2016
Implement other efficiency improvements $1,000,000 or more Completed. Right of way maintenance and street-sweeping are being implemented with solid waste contracting. 
Health care savings (retirees) Up to $60 million in total savings Completed. Actuarial report is being finalized.
Debt Restructuring    
General Secured Bond Obligations $487,450 Implementing - Agreement has been reached. Documentation is underway.
General Unsecured Bond Obligations – Pension Obligation Bonds Up to all but 1% of obligation or approximately $95 million Implementing - City has reached agreement with creditor. Obligation reduced from $95.8 million to $50.7 million. Annual payments reduced from $3.3 to $4.7M per year to $1.0 to $2.5M per year
Restructuring of other creditor obligations Up to $4,300,000 in total savings Pending - Tentative agreement reached with holder of $527,490 lease purchase obligation
New Fee Revenue and Tax Adjustments  
Seek reauthorization of the Measure Z sales tax in 2021 (requires voter approval) $8,300,000 Pending – 2021. Police resources plan for rebuilding police capacity and improving public safety adopted by City Council
Perform a transient occupancy tax (TOT) audit $200,000 Pending - 2016
Collect new waste management franchise fee (once service has been contracted) $5,000,000 Completed. Council approved a contract with Burrtec. Service began April 1, 2016. Paid a $5M one-time fee plus will increase annual franchise payment to $5M from $2.2M. Sale of equipment nets City $12M.
Increase waste management franchise fee  $2,800,000 Completed. Will increase annual franchise payment to $5M from $2.2M.
Implement water/sewer utilities franchise fee  $1,050,000 Completed. New agreement adopted by City and Water Department.
Update master fees and charges schedule $200,000 Pending - 2016
Implement program for collecting street sweeping parking violations $200,000 Pending. Will be done in conjunction with move to private vendor – 2016
Implement compensation adjustments for all City employees $400,000 and growing (2% adjustment for non-safety employees) Completed. Agreements have been reached with all employee bargaining groups. 
Provide resources to Charter Task Force and schedule election to consider revised Charter $150,000 (one time cost) Pending. A new draft charter is under development and has been reviewed at public meetings. Charter Committee to provide recommendations to Council in May and anticipate November 2016 election. Costs have been less than estimated
Organizational Improvements Ongoing Costs Implementation Schedule
Implement strategic planning initiatives $1,000,000 to $3,000,000 depending on timing and ability to fund Pending. Have completed Police Five Year Resources Plan which calls for additional investment of from $6.7M to $13.3M in annual funding over next five years starting in July 2016. Current model can only fund a portion of total needed
Rebuild corporate support functions $100,000 with a one-time cost of $500,000 Pending. Organizational reviews in process and have preliminary observations and recommendations for Finance, Human Resources and Information Technology

The third amended Disclosure Statement, Plan for the Adjustment of Debts and revised/new exhibits were filed with the bankruptcy court on May 27, 2016. Please see below for links to the latest versions.

Disclosure Statement(s) and Plan for the Adjustment(s) of Debts 
The bankruptcy process includes multiple amended versions of the Disclosure Statement and Plan for the Adjustment of Debts. As settlments are reached and adjustments are made to the City's service models, financial projections are updated and must be reflected in the corresponding document(s).

Below you will find links to each of the versions submitted to the Bankruptcy Court for the Central District of California. 

Filed May 27, 2016
Disclosure Statement (143 pages)

Plan for the Adjustment of Debts - Exhibit 1 - revised ( 78 pages)

Revised Exhibits 3, 6, 6A and new Exhibits 33 and 34 (80 pages)
Exhibit 3 (revised) - City’s Revised Long Term 20-Year Financial Model pg. 3

  • Exhibit 6 (revised) - Chart Listing Lawsuits pg. 8
  • Exhibit 6A (new) - Chart Listing Lawsuits Noticed to BICEP pg. 16
  • Exhibit 33 (new) - Resolution No. 2016-68 - Adopting A Transition and Release Agreement Between the City of San Bernardino and the San Bernardino Fire Management Association pg. 19
  • Exhibit 34 (new) - Resolution No. 2016-83 - Authorizing Execution of Settlement Agreement Between the City of San Bernardino and the Public Agency Retirement System (“PARS”) Participants pg. 44

Remaining exhibits can be found below under second amended filing on March 30, 2016.

Filed March 30, 2016 (second amended versions)
Disclosure Statement
Plan for the Adjustment of Debts - Appendix Ex. 1
Appendix Ex. 2 - 6

  • Exhibit 2 Resolution No. 2015-103 (Authorization to Implement Recovery Plan, File
  • Chapter 9 Plan of Adjustment and Disclosure Statement) pg. 5
  • Exhibit 3 City's Long Term 20-Year Financial Model pg. 18  (updated in third amended filing on May 27, 2016)
  • Exhibit 4 ADR Procedures pg. 23
  • Exhibit 5 BICEP Policy and the Reinsurance Contracts pg. 35
  • Exhibit 6 Chart Listing Lawsuits pg. 130 (updated in third amended filing on May 27, 2016)

Appendix Ex. 7

  • Exhibit 7 Building Detail Report (City-Owned Properties)

Appendix Ex. 8

  • Exhibit 8 Building Maintenance & Costs Reports - Building Detail

Appendix Ex. 9-12

  • Exhibit 9 Street Repairs Report pg. 512
  • Exhibit 10 Street Repairs Financial Plan pg. 598
  • Exhibit 11 Staff Report for the Five-Year Police Resources Plan pg. 1119
  • Exhibit 12 RDA Exhibit pg. 1139

Appendix Ex. 13

  • Exhibit 13 Long-Range Property Management Plan

Appendix Ex. 14-23

  • Exhibit 14 List of City-Owned Personal Property (as of June 2013) pg. 1463
  • Exhibit 15 List of City Non-Fire Vehicles pg.1563
  • Exhibit 16 List of City-Owned Equipment (Excluding Fire Department Equipment) pg. 1577
  • Exhibit 17 Cross Fund Report (dated as of February 29, 2016) pg. 1583
  • Exhibit 18 Chart of City Restricted Funds pg. 1586
  • Exhibit 19 Mediator's Order pg. 1605
  • Exhibit 20 Resolution No. 2015-217 (IUOE - General Unit Employees Bargaining
  • Unit) pg. 1627
  • Exhibit 21 Resolution No. 2015-242 (Management/Confidential Association) pg. 1637
  • Exhibit 22 Resolution No. 2016-12 (Settlement with SBCPF and Fire Safety
  • Bargaining Unit) pg. 1643
  • Exhibit 23 Resolution No. 2015-255 (Police Management Association) pg. 1671

Appendix Ex. 24

  • Exhibit 24 MOU for the Police Safety Bargaining Unit for the Period of July 1, 2015 to June 30, 2020

Appendix Ex. 25-29

  • Exhibit 25 Resolution No. 2015-261 (Middle Management Bargaining Unit) pg. 1710
  • Exhibit 26 Settlement with Pension Obligation Bond Creditors pg. 1723
  • Exhibit 27 Settlement Agreement with Retirees pg. 1732
  • Exhibit 28 Resolution No. 2016-19 (Authorizing City Manager To Take All Necessary
  • Actions to Comply with LAFCO Conditions for Annexation into San
  • Bernardino County Fire District) pg. 1739
  • Exhibit 29 Resolution No. 2016-10 (Approving 10 Year Agreement with Burrtec) pg. 1749

Appendix Ex. 30

  • Exhibit 30 Agreement with Burrtec Waste Industries, Inc.

Appendix Ex. 31-32

  • Exhibit 31 Resolution No. 2016-26 (Authorizing The Transfer Of Certain Real
  • Property Assets From The Successor Agency To The Redevelopment
  • Agency Of The City Of San Bernardino To The City Of San Bernardino) pg. 2013
  • Exhibit 32 Resolution No. 2015-173 (Approving Settlement Agreement With The San
  • Bernardino Police Officers Association) pg. 2024

Solicitation motion 

Filed May 29, 2015
Disclosure Statement with Respect to the Plan for the Adjustment of Debts of the City of San Bernardino including Exhibits (286 pages-25MB file; may take several minutes to download) 05/29/15 
Plan for the Adjustment of Debts of the City of San Bernardino (86 pages) 05/29/15

Recovery Plan in support of Plan of Adjustment (integrated into the Disclosure Statement in March 30, 2016 filing as requested by Judge Jury)
Revised Recovery Plan as submitted to the bankruptcy court on 11/23/15
Recovery Plan in Support of Plan of Adjustment 05/29/15 (as adopted by Mayor and Common Council on 05/18/15 - with final corrections and clarifications - and filed with court 05/29/15
Recovery Plan summary presentation to Common Council (60 pages) 05/18/15
Recovery Plan supporting the Plan of Adjustment (172 pages) PDF 05/14/15
Plan of Adjustment development process presentation to Common Council (25 pages) 01/05/2015

Strategic Plan
Draft Strategic Plan submitted with recovery plan in support of the plan of adjustment (19 pages)
Strategic planning process recap submitted with recovery plan in support of the plan of adjustment (54 pages)
Strategic Planning Workshop video recording 04/24/2015
Community Engagement Roadshow Videos February 2015
Strategic Planning process presentation to Common Council 01/20/2015

Pendency Plan
Bankruptcy Update & Public Input Session 10/14/2013
Pendency Plan 11/27/12
Pendency Plan 11/26/12
Pendency Plan Staff Report 11/19/12
Pendency Plan 11/19/12

Pre-Pendency Plan Adopted
Fire Department Pre-Pendency Plan adopted 10/01/12
Councilwoman Wendy McCammack's 9 Point Plan 09/05/2012
City Pre-Pendency Plan 08/29/2012

Pre-Pendency Plan Adjustments Presented to MCC
Councilman Chas Kelley's Alternative Fire Department Plan 09/05/2012
Councilwoman Wendy McCammack's 9 Point Adjustment Plan 09/17/12 

Bankruptcy Court Documents, Claims and Noticing Agent
The Bankruptcy Court appointed Rust Omni as the official claims and noticing agent in its bankruptcy case. The City makes additional information about its bankruptcy case available at Rust Omni's website, which was set up for the City's case. Important documents that have been filed in the City's bankruptcy case are available under the "Court Docket" tab on the Rust Omni website.

Mayor and Common Council Meetings - Public Session Bankruptcy Updates or Supporting Documentation
Bankruptcy update presentation 07/18/16
Bankruptcy update presentation 06/20/16
Council meeting presentation tax transfer item 02/29/16 (13 pages)
Bankruptcy update presentation 02/16/16 (8 pages)
Bankruptcy update presentation 12/7/15 
2012-205-Resolution Declaring a Fiscal Emergency
2012-206-Resolution Authorizing the Filing of a Petition Under Chapter 9 Bankruptcy

Finance Reports

Media Releases

Refuse Services Documents
News Release - Burrtec service begins April 1, 2016
Integrated Waste Management agreement presentation 01/25/16 to council
Proposed Burrtec Integrated Waste Agreement 1/25/16 (126 pages) as reflected in the Jan. 25 agenda packet.
News release - City to pursue refuse contract with Burrtec - 11/19/15
Presentation document as shown at Nov. 16, 2015 Mayor and Common Council meeting
Refuse RFP Response Analysis and Recommendation (71 pages) - Includes analysis, initial RFP, and bidder question/answers.
09/17/2012 Review and Eval of the Draft Request for Proposals for Solid Waste, Collection and Disposal Services

Fire Services Documents
Fire Annexation FAQs
News Release - City Council approves tentative global settlement agreement with San Bernardino City Professional Firefighters 01/26/16
Fire and EMS delivery service recommendation presentation 08/24/15 (41 pages)
Citygate's Evaluation of Fire Proposals - August 2015 (31 pages)
Centerra Initial Proposal (116 pages)
Centerra Supplemental Proposal in response to Citygate (42 pages)
SB City Fire Initial Proposal (4 pages)
SB City Fire Supplemental Proposal in response to Citygate - part 1 (2 pages)
SB City Fire Supplemental Proposal in response to Citygate - part 2 (3 pages)
SB County Fire District Initial Proposal (43 pages)
SB County Supplemental Proposal in response to Citygate (9 pages)
Citygate Fire Svcs Deployment Study June 2014 - Volume 1 Executive Summary (16 pages)
Citygate Fire Svcs Deployment Study June 2014 - Volume 2 Technical Report (121 pages)
Citygate Fire Svcs Deployment Study June 2014 - Volume 3 Map Atlas (37 pages)
Fire Station Map - Regional (1 page)

For general Chapter 9 Bankruptcy information, please visit the United States Courts and/or The State of California Legislative Analyst's Office (LAO) website. Links to both resources are available under External Links below.

If you have questions, concerns, comments or suggestions, please submit your request in writing by completing a SB Access Online service request form. SB Access Online service request form

External Links
United States Bankruptcy Court, Central District of California - What Happens When Cities Go Bankrupt?
California Legislative Analyst's Office Bankruptcy Q&A