San Bernardino, Calif., is getting ready for some of the most critical decisions in its nearly three years in bankruptcy as a crucial deadline looms, The Press Enterprise reported on Friday. The city must submit a plan to federal bankruptcy court by May 30. Officials are considering major changes in how the city operates as part of its plan describing how it will deal with its creditors and run on stable financial footing. The city also faces a battle with bondholders owed millions of dollars. Those bondholders, who hold $46 million in outstanding pension bonds, may not be fully paid in the plan. Since entering bankruptcy in August 2012, the city has deferred about $15 million in payments. The city has continued to make payments to creditors with secured bonds on assets such as city hall. Creditors with secured debts could sell off city properties if the city defaulted. Initially, the city also suspended payments to CalPERS but resumed them a year later. San Bernardino has since reached an agreement with CalPERS in which it promises to repay the $13 million in missed payments and continue its monthly dues in full.
