The California Public Employee Retirement System argues that the departure of San Bernardino budget officials and the continued understaffing of the finance department have prevented the city from giving CalPERS necessary documents.
"The city's failure to devote adequate resources to its finance department and to its bankruptcy case calls into question its good faith and desire to effect a plan of adjustment," CalPERS' attorneys write.
They point specifically to the City Council's Jan. 10 decision to give only about half of the $660,000 requested by Finance Director Jason Simpson for financial consultants, despite a December staffing level of only 12 people - less than half what comparable cities have when not going through bankruptcy.
Of eight high-priority items identified by CalPERS, four have not been produced and two have been only partially produced, attorneys Michael Gearin, Michael Lubic and Brett Bissett said in a status report filed Friday.
The city's bankruptcy attorneys replied Monday that they are providing all the information they can and called CalPERS' claims misleading.
"In its report, CalPERS acknowledges that the glass is half full, but prefers to argue that it is half empty," the city's bankruptcy attorneys, led by Paul Glassman, wrote.
They say the city hired the consultants Simpson requested for half the time requested, given the expected departure of Simpson and Acting City Manager Andrea Travis-Miller and the desire to have their successors weigh in, but the city has just as many financial consultants working now as planned.
"In addition, CalPERS is fully aware, and conveniently neglected to report, that the city has added two former municipal finance directors to work on its budget, more than a month ago the city hired two people to complete the city's (Comprehensive Annual Financial Report) for its last fiscal year, and at least four city staffers are working to produce the voluminous amount of documents and information responsive to CalPERS' informal requests," the attorneys wrote.
CalPERS, which along with the union representing the city's middle managers argues San Bernardino does not qualify for bankruptcy protection, asks to defer scheduling related to a trial on eligibility and instead to have another hearing in about two weeks. The city says about three weeks would be a good time frame.
The judge is unlikely to overrule that agreement, said Michael Sweet, a bankruptcy attorney with Fox Rothschild in San Francisco who is not involved in San Bernardino's case.
Today's hearing begins at 1:30 p.m. in U.S. Bankruptcy Court at 3420 12th St. in Riverside.
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