A decade on, San Bernardino’s bankruptcy case closed

A federal judge has closed out the bankruptcy case filed by San Bernardino a decade after the city grappled with a dire cash shortage, officials said Monday, Sept. 12.

The city of San Bernardino said in a statement that U.S. Bankruptcy Judge Scott Clarkson closed the case last week because the city had resolved claims and has shown it can pay its outstanding long-term obligations. When the city filed for bankruptcy on Aug. 1, 2012, vendors hadn’t been paid and cash was running out to make payroll.

“The grueling and deep cuts we all experienced are in the rearview mirror of San Bernardino’s history,” Mayor John Valdivia said.

Officials said the city is now in a much better financial position and has been tackling street paving and tree trimming projects and hiring much-needed staff.

10 years after bankruptcy:San Bernardino looks back

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Facing a $45 million deficit in 2012, San Bernardino leaders got the news: ‘We’re broke’
Owing $281 million, bankrupt San Bernardino worried checks would bounce in 2012
In once-broke San Bernardino, ‘scars never go away’ but city moves on

For the current fiscal year, the city has forecast a $2.5 million budget surplus — a far cry from the $45 million budget shortfall that was projected when the city entered bankruptcy, the statement said.

A decade ago, San Bernardino was in tough financial straits thanks to weak property and sales tax revenues, rising pension costs and a decline in state redevelopment funding. It went into bankruptcy amid an unprecedented wave of cities doing so, including Vallejo and Detroit.

In 2017, San Bernardino began paying creditors again under a bankruptcy exit plan. At the time, there were more than 1,000 claims against the city.