SAN BERNARDINO, Calif. (AP) - The city of San Bernardino would slash retirees’ health care coverage and contract for fire and waste disposal services under a proposed bankruptcy exit plan.
The proposal made public Thursday would require the city to pay 1 percent of the $50 million owed to pension obligation bondholders, the Sun newspaper reported (https://bit.ly/1QPFxY3 ).
With the plan, San Bernardino is seeking to emerge from the bankruptcy protection it sought in 2012.
The City Council is expected to vote Monday on the exit plan prepared over the past few months by city leaders, consultants and attorneys. The city has a May 30 deadline to submit what’s called a plan of adjustment to U.S. Bankruptcy Court.
Among the creditors that would be fully paid is the California Public Employees’ Retirement System, with which the city negotiated a settlement in June.
Officials said a structural deficit of more than $20 million remained despite previous deep cuts that included eliminating about 250 employees and deferring $200 million in essential capital maintenance and replacement of fleet vehicles.
Each group of creditors, except ones that would be fully paid, are entitled to vote to accept or reject the proposal. But the city said it will ask the bankruptcy court to force the plan into effect regardless.
Information from: The Sun, https://www.sbsun.com
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