While the city faces a great deal of trouble with its personnel costs, an even more toe-curling potential calamity awaits in the form of hundreds of millions of dollars of liabilities in economic-development grants, according to Warner Hodgdon, an astringent critic of the city government. The city offered the development concessions in the belief that the state would be picking up the tab, but Sacramento has some hairy fiscal problems of its own and is getting ready to leave San Bernardino and other cities twisting in the hot desert wind on those liabilities. Nobody seems to appreciate the irony that San Bernardino’s economic future has been nuked by over-ambitious economic-development programs, and Hodgdon doubts whether the fiscal emergency and bankruptcy will be sufficient to deal with that problem. “I question whether this is a wise move,” he said. “I spent ten years as chair of the economic-development agency. We were an all-American city, not all-American buffoons.”
The buffoonery is epidemic. Little places such as Mammoth Lakes have gone fiscally toes up, as have bigger cities such as Vallejo. Bankrupt Stockton, one of the most dangerous cities in the country, has substantially reduced its police force, and signs of disorder are everywhere: garbage, police tape, vandalized properties. In the city’s Garden Acres neighborhood — a.k.a. “Okieville” — tattooed young men ape the style and mannerisms of Sinaloa gangsters. But like a lot of cities burdened with gigantic pension liabilities, Stockton is paying so many police so much not to police that it can’t afford to pay police to police. Just outside Los Angeles, the city of Compton is probably bankruptcy-bound, too. Compton, once synonymous with ghetto gangsterism, had been making something of a comeback, but like San Bernardino it grossly (and perhaps criminally) mismanaged its finances, shuffling money around from special-fund accounts to pay general-fund bills, leaving it with a looming deficit almost equal to its annual budget. Its bonds are junk, and its auditing firm, Mayer Hoffman McCann, was fined $300,000 for failing to detect irregularities leading up to a 2010 corruption scandal in Bell, Calif. And even that firm won’t sign off on the city’s current financials: It quit rather than publish an opinion on the statements, citing unresolved fraud allegations. Mayer Hoffman McCann: Straight outta Compton.