LOS ANGELES, CA (Catholic Online) - San Bernardino has a population of about 210,000 residents and is located 65 miles east of Los Angeles. Its local government declared last month that it had tapped out its reserves and projected spending would top revenue by $45 million in the fiscal year that began on July 1.

The city has "more than $1 billion" in liabilities, and estimated that it has between 10,001 and 25,000 creditors, according to the filing made in the United States Bankruptcy Court, Central California District.

San Bernardino has estimated assets of more than $1 billion.

The city council voted on July 24 to adopt an emergency three-month fiscal plan that would suspend debt payments, freeze vacant jobs and quit paying into a retiree health fund.

"The bankruptcy filing was just to get the protection in place, to kick the process off," a city spokesperson said.

San Bernardino had reported last month that it had $56 million in indebtedness payable from its general fund, the main budget, including payments on a $50 million pension bond. There is an additional $195 million in unfunded pension obligations, $61 million in unfunded retiree healthcare and $40 million of workers compensation.

The California cities of Stockton and Mammoth Lakes have likewise filed for Chapter 9 bankruptcy protection, a special bankruptcy provision for municipalities.

Stockton suffered from the housing crash that was especially devastating in southern California and filed for bankruptcy in June, the largest U.S. city to date to do so.

Several other cities in California are also in deep fiscal trouble and could potentially file for bankruptcy.

Cities have had the option of filing for bankruptcy since the Great Depression, but few cities choose that option. Only about 640 such filings have been made since 1937.

The mayor of Compton, a city outside Los Angeles, said he had asked state auditors to look into unspecified "waste, fraud and abuse of public monies," on July 17. That city could file for bankruptcy by September 1, its financial officials said.

Auditors in Victorville, California, in January said there "was substantial doubt about the city's ability to continue as a going concern."

Officials had reportedly falsified budget reports to the mayor and council of San Bernardino for 13 of the last 16 years, hiding the scale of the city's debt, according to a report by the city attorney.

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