POLITICS

CalPERS: Bankrupt San Bernardino can afford to pay pension fund

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Politics,Beltway Confidential,Michal Conger,California

Bankrupt San Bernardino has more than enough money to pay the $12 million it owes California’s public pension fund, even though the city previously claimed it only had $4.2 million, the California Public Employees Retirement System said on Tuesday.

The city actually had $28.6 million in the bank as of January, a CalPERS attorney told a judge in bankruptcy court, according to Reuters.

San Bernardino declared bankruptcy in August 2012 and stopped making payments to the pension fund, saying it couldn’t afford them. CalPERS says the city now owes $12 million in back payments.

San Bernardino plans to resume payments in July, but that’s not soon enough for the pension fund.

“There are materially different numbers that are coming out,” attorney Michael Lubic told the judge, according to Reuters. ”CalPERS believes there is sufficient cash to pay CalPERS and its other administrative claims.”

A consultant for the city acknowledged in court papers in April that it does have more than the $4.2 million it claimed, according to the Sacramento Bee.

The papers, filed by consultant Michael Busch, said the city had $26.8 million in January and expects to have $33.1 million by the end of the fiscal year.

But because the city has “deferred obligations” of $33.3 million, it won’t be able to pay CalPERS back just yet, Busch added.

“There would not be enough cash available if the city was required to pay all of the city’s deferred obligations during the budget period,” he wrote.

San Bernardino is one of several cases in California that pit federal bankruptcy law against state pension laws. Stockton, the most populous U.S. city to enter bankruptcy proceedings, has continued paying CalPERS even though it can barely provide basic services and stopped paying its other creditors.

 

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