San Bernardino is on its way toward solvency after a judge approved the city's bankruptcy plan Tuesday.
The city has been in bankruptcy proceedings since 2012, when it found itself facing an operating deficit of more than $45 million. U.S. Bankruptcy Judge Meredith Jury praised the city government for its cost-cutting efforts over the four-year period.
City officials celebrated the ruling too, though it won't take effect for a few more months, San Bernardino Sun reporter, Ryan Hagen told KPCC's Take Two.
Hagen said the bankruptcy has not only affected the city's finances and municipal services, but also the psyche of San Bernardino residents.
"This was a tough time for a lot of residents, and businesses and potential visitors might not have understood the financial details, but just the scarlet letter of being bankrupt — it's a big blow to a city," Hagen said.
The economic recession, the closure of Norton Air Force Base, and budgeting issues and errors were among the contributors to San Bernardino's financial woes. In its bankruptcy, the city has faced challenges: poor maintenance of parks and streets, and a diminished police force.
As part of the bankruptcy plan, San Bernardino will pay back about one cent for every dollar it owed, saving taxpayers about $300 million. The city now has a balanced budget and a new charter. To cut costs, the city outsourced trash collection and its fire service, cutting its municipal workforce almost by half through that outsourcing, attrition, and some layoffs. The city also managed to not raise taxes and limit spending, Hagen said.
"Although things are certainly tight and there are still lots of services that won't be provided, the city is afloat," Hagen said.
The city's first priority is to hire more police officers and upgrade technology, Hagen said, because San Bernardino has experienced an increase in crime this year. As for a business development, city officials hope simply exiting bankruptcy will attract more businesses to the area.
"It's a city where a lot of people are kind of down on the prospects of the city, but there's kind of a deep resilience there too," Hagen said.