CalPERS says the insolvent city of San Bernardino has enough money to pay its past-due bill to the giant pension fund.
A lawyer for the California Public Employees' Retirement System told a bankruptcy judge Tuesday that the city had $26.8 million in cash in January not $4.2 million as previously claimed. Attorney Michael Lubic's assertions were reported by Reuters and confirmed Wednesday by a CalPERS spokeswoman.
San Bernardino halted payments to CalPERS and other creditors after filing for bankruptcy protection last August.
The San Bernardino case, along with Stockton's bankruptcy, are shaping up as a crucial test of CalPERS' power and the sanctity of public pensions. CalPERS contends that its member cities and counties have no choice but to pay their pension bills in full, even if they have to walk away from other debts.
"CalPERS believes there is sufficient cash to pay CalPERS and (the city's) other administrative claims," Lubic said at a hearing in U.S. Bankruptcy Court in Riverside.
San Bernardino's City Council has voted to resume payments to CalPERS starting with the new fiscal year July 1. But it hasn't established a plan for repaying the more than $12 million in skipped payments.
Lubic based his claim on an April court filing by a city finance consultant, Michael Busch.
Busch acknowledged the city had $26.8 million in January and expects to have $33.1 million when the current fiscal year ends in June.
But he portrayed the city's finances as still fragile. He said the city has delayed a total of $33.3 million in payments to various creditors.
"There would not be enough cash available if the city was required to pay all of the city's deferred obligations during the budget period," he wrote.
San Bernardino City Attorney James Penman couldn't be reached for comment.
Call The Bee's Dale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.