San Bernardino Faces Recall, Debt, Bankruptcy Issues Ahead of Election

By Samantha Gallegos

Exclusive CityNews Report from Capitol Weekly

Recall elections, pension-linked debt, bankruptcy, a controversial structure, an angry citizenry – you name it, San Bernardino’s got it.

“A lot of (cities) have structural problems in their charters. San Bernardino has probably one of the most bizarre, in terms of local government,” said Michael Coleman with California’s League of Cities. “It impedes on accountability and causes a lot of infighting. It makes it difficult for the city clerk and council to manage the budget.” 

The city not only is facing controversy surrounding its bankruptcy and payments to the California Public Employees’ Retirement System, but voters could also sweep their city representation clean in a recall election this November. 

Eight candidates are angling for the scalps of four city officials facing recall elections. But other incumbents don’t even want to seek re-election, in part because the electorate appears so enflamed.

Political infighting and the city’s financial, crime and unemployment issues led one group of business owners and residents to form a political action committee, soon after the city filed for bankruptcy last year. The downward fiscal spiral stemmed in part from obligations to fund pensions and retirees’ health care. The city missed $13 million in payments to CalPERS and has a $45.8 million budget shortfall.

The miscues prompted the creation of a group called San Bernardino Residents for Responsible Government to unseat three city councilmembers and the city attorney. 

“It is not just the pensions, it goes to bad decisions made on the redevelopment agencies, it goes to bad budgeting decisions over the years and it goes to no economic development really focused in on the assets that the city already has,” said Michael McKinney, a political strategist and the coalition’s campaign manager. 

The effort originally intended to recall all seven members of the city council, the mayor and the city attorney in order to fix what the coalition described as decades of neglect. 

Not enough signatures were collected to recall two councilmembers. Two other members and the city’s mayor have opted not to run for reelection in November. 

But three city councilmembers and the city attorney, James F. Penman, could be unseated in this year’s recall.

“The council, with their infighting, they can’t agree on anything,” McKinney said. 

Others agree.

“I live in the City of San Bernardino. I have three children here and I have eight grandchildren who live here and I’m just tired of the horrible management, infighting, and the toxic political environment that has been created,” said Scott Beard, a local businessman and the recall campaign’s responsible officer and largest donor. “Somebody had to do something at some point. It’s just ridiculous what’s going on here.”

But Penman, one of the targets of the recall effort, says the backers of the recall are looking for leverage to advance business interests. 

“The recall proponents are a group of developers who are trying to get their people voted into offices of the council, the mayor and the city attorney so they can get some projects they want approved by the city,” said Penman. 

Penman contends Beard and his allies want to put candidates on the council in order to have a say in the city’s water deals. 

“San Bernardino has a huge water supply. We have an underground lake that leads to downtown that, depending on the rain fall, has a capacity that sometimes is equal to that of Lake Shasta,” Penman said. “Private companies for years have been trying to buy our water, or take control of it.”

Penman said Beard would need to get approval for projects by a city attorney willing to give a specific interpretation of the city’s charter, Penman notes.

Rather than amend the charter by a vote of city residents to lease out the city’s water system, Penman says the recall proponents want to put someone favorable to their position in the city attorney’s office. Penman pointed to the city of Rialto, which several years ago made a deal to lease out its water system — a deal that Beard supported. Water rates subsequently shot up 54 percent, according to Penman. 

Beard, who supports local lawyer Gary Saenz for the city attorney’s post, called Penman’s claims “an absolute boondoggle.”

“The ability control the water [in San Bernardino]… is so complicated the way the charter is set up. It’s a completely separate board,” said Beard. “The reality is the only thing in the city running right is the water department.”  

The water department has about $80 million in reserves and is run separate from the city council.

“They actually run it right, so why would anyone screw with that? I live on eight and a half acres here… the last thing I want to do is raise water rates,” said Beard. 

McKinney also said the comparison of San Bernardino and Rialto is misleading.

“You couldn’t have two more different situations,” explained McKinney. “The City of Rialto was faced with a water department that was broke; they did not have the financial ability to pull it out.”

McKinney also said the reason for the water rate increase in Rialto was due to the finding of contamination by the chemical perchlorate and the necessary clean up over time. 

Meanwhile, the residents of San Bernardino are being dealt a heavy hand in deciding who should manage their city. 

If the recall effort is successful, the new management will still be stuck with what some believe is a rigid charter prone to creating turmoil among city officials. 

“City charter had locked in a lot of things about city employee compensation levels. Despite where the city’s financial situation is going, the compensation is required by the charter,” said Coleman. “When it says you have to continue at these levels, it makes budgeting very difficult.”

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