Friday, July 13, 2012

California City Under Investigation Drained Reserve Funds - Bloomberg

California City Under Investigation Drained Reserve Funds - Bloomberg

Law enforcement officials are investigating possible crimes in San Bernardino’s city government, which almost drained special funds to prop up its budget.
The near-bankrupt state of the community of 209,000 east of Los Angeles came to light when a new finance director discovered that previous officials shifted money for workers-compensation and liability insurance to the general fund, said Andrea Travis- Miller, interim city manager.
“The city has relied on a whole variety of one-time measures to balance its budget,” Travis-Miller, who began her job in May, said yesterday. “There have been transfers to the general fund with the expectation that they would be repaid. That became difficult.”
San Bernardino's fiscal crisis is looking more and more like a case of mismanagement occurring in hard economic times in which they lost property tax revenues and also face a huge pension obligation. Thanks to Fred Pilot for the link.

1 comment:

Anonymous said...

Hey that's no different that every self-respecting corporation out there. Look at any financial report giving glowing reviews with a footnote that says "excluding one-time items". Then you have one of these "one-time items" every quarter right into paper prosperity!