Posts Tagged: bankrupt

Contracting out, bankrupt San Bernardino cuts pension costs

On the outskirts of San Bernardino. (Photo: Steve Heap)

by ED MENDEL posted 05.26.2015

A San Bernardino plan to exit bankruptcy follows the path of the Vallejo and Stockton exit plans, cutting bond debt and retiree health care but not pensions. Then it veers off in a new direction: contracting for fire, waste management and other services. The contract services are expected to reduce city pension costs. Other pension savings come from a sharp increase in employee payments toward pensions and from a payment of only 1 percent on a $50 million bond issued in 2005 to cover pensions costs.

The city of Cerritos may be a trailblazer of sorts among local governments, but it’s leading the way on a trail that local governments probably don’t want to follow. The southern California community, which boasts a population just shy of 50,000 residents, is among the first of several city governments in California to go to the mat against the state controller’s review of its shift of local assets from the redevelopment agency.