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City Hall, center rear, looms over Court Street Square, which is closed, in downtown San Bernardino, Calif.

San Bernardino files for Chapter 9 bankruptcy

SAN BERNARDINO, Calif. — San Bernardino officials have filed an emergency petition for Chapter 9 bankruptcy in response to the $45.8 million budget deficit the city faces this year, making official a move the City Council approved last month.

"There will be no immediate service reductions or changes in service to the community as a result of the filing," Interim City Manager Andrea Travis-Miller said Wednesday in a written statement.

City officials are working on a plan for the city's operational budget during bankruptcy, and once the plan is complete, reductions may occur, Travis-Miller said.

Travis-Miller hopes to submit a plan for the City Council's consideration within the next three weeks.

The city of 210,000 people declared a fiscal emergency July 18.

San Bernardino became the third California city to declare insolvency this year, joining Stockton and Mammoth Lakes.

After last month's announcement, San Bernardino's finances experienced increased stress when a dozen employees put in for retirement with hopes of cashing out accrued vacation and sick time. The announcement also has spurred vendors to demand cash instead of credit as payment.

Officials say the housing crisis devastated property and sales tax revenues, and the loss of state redevelopment funds took a toll on the city's budget.

San Bernardino is located about 60 miles east of Los Angeles.

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