Police and firefighter unions in bankrupt San Bernardino want to sue the city for cutting members’ pay and benefits. Last year the city became the first in California to unilaterally stop paying into the California Public Employees Retirement System (Calpers), and the unions who represent these pensioners aren’t happy. Since the city’s bankruptcy hearing is still pending, none of its creditors, Calpers included, are currently allowed to sue for money owed. But the unions are trying to change that. Reuters has the details:
In December, the bankruptcy judge ruled against an attempt by Calpers to have the bankruptcy stay lifted so the pension fund could sue the city in state court to collect pension arrears.Asking for the stay to be lifted is what the police and firefighters unions will do later this week. The public employees union, representing about 54 mid-level city officials, made the same move last week.
San Bernardino—the third California city to declare bankruptcy last year—has now become a battleground in the war between pensioners and other creditors trying to collect payments from a defunct city. It’s a sadly familiar story: The various blue constituencies are going to war with each other as they each try to extract the last bit of money from near-empty coffers. The city faces stark trade-offs: does it slash services to the young in order to pay pensions to the old? San Bernadino’s schools are in terrible shape and its budget can no longer support basic police and fire protection—but the geezers still want the money they’ve been promised. As more cities go bankrupt, what happens here could set a precedent for similar cases around the state and the county.Interest groups fighting over scraps in the ruins—this is where the blue model leads.