The San Bernardino (Calif.) City Council delayed making payments on pension obligation bonds until September, under an emergency operating plan adopted by the council Tuesday.
In all, the city plans to defer $3.6 million in debt and lease payments, including payments for pension obligation bonds and infrastructure bank loans.
Last week, the city filed for Chapter 9 bankruptcy protection as a result of a $45.8 million budget shortfall. Now the city is delaying paying its debt on $50 million in pension obligation bonds it issued in 2005, according to a report to the City Council from the city manager's office.
The city's annual debt service on the bonds is about $3.4 million.
The city, which is part of the $235 billion California Public Employees' Retirement System, Sacramento, has $195 million in unfunded pension obligations.
The emergency plan was adopted as a stop-gap measure while city officials prepare a “pendency plan,” a budget that will serve “as the road map until the bankruptcy court approves a long-term plan of adjustment,” that would restructure the city's debts and obligations.
