LOS ANGELES (Reuters) - Crisis-hit San Bernardino, California, picked a new city manager on Friday at a critical time in its quest to get bankruptcy protection from a federal court.
San Bernardino was forced to look for a new city manager after its acting city manager, Andrea Travis-Miller, quit.
Her resignation coincides with the departure of the city’s finance chief. Both had been the key officials overseeing the city’s bankruptcy application and their departures threaten the city’s ability to achieve it. They had more knowledge than anybody else of the city’s finances and the experience to answer questions from the court and creditors.
The city council voted to hire Allen Parker to replace Travis Miller. According to his resume provided to the city, Parker has been an economic development consultant since 2006.
From June 2001 until December 2006, according to his resume, Parker was chief administrative officer of the Morongo Band of Mission Indians, a federally recognized tribe in California. Before that he was village manager of Maywood, Illinois.
The federal judge overseeing San Bernardino’s bankruptcy application said in a court hearing on Tuesday that the new city manager would be confronted with a steep learning curve.
Various creditors are demanding a wealth of financial documents from the city. The city must also produce a detailed bankruptcy blueprint to explain how it intends to deal with its creditors, a key part of proving its eligibility for bankruptcy.
The city council considered two applicants for the job, and voted unanimously to hire Parker.
“Allen Parker brings a wealth of city management experience to San Bernardino,” the mayor, Pat Morris said. “I have great confidence in his ability...to guide San Bernardino through the difficult decisions we must make in bankruptcy.”
San Bernardino, a city of 210,000 about 60 miles east of Los Angeles, filed for bankruptcy protection on August 1, citing a $46 million deficit for the current fiscal year and little scope to meet its day-to-day expenses. It was the third California city to file for bankruptcy last year, following Stockton and Mammoth Lakes.
The city’s biggest creditor, the California Public Employee Pension Fund (Calpers), has opposed San Bernardino’s quest to seek bankruptcy protection. Without it, the struggling city will likely face multiple lawsuits in state court for unpaid bills, at a time when its officials say it can barely make payroll.
The city pegs its debt to America’s biggest public pension fund at $143 million.
San Bernardino has not made its $1.2 million, twice monthly payment to Calpers since its bankruptcy declaration last August.
No city has ever unilaterally suspended payments to Calpers, which manages pension plans for state government employees and many municipalities and local government agencies around California.
The bankruptcy could be a test case as to whether the pensions of government workers take precedence over other payments in a municipal bankruptcy - a high-stakes issue for pension plans and their beneficiaries, and for the Wall Street bondholders who lend money to governments.
In a statement, Calpers said: “We are very pleased to have Mr. Parker stepping into his new role as city manager of San Bernardino and our executives have already reached out to him personally to welcome him and begin a dialogue with Calpers.”
Reporting by Timothy Reid; Editing by Lisa Shumaker