San Bernardino City Hall in 2009. (Wikimedia Commons)

The decision to file followed a report by city staff that spelled out San Bernardino's exhausted reserves, predicting that future spending would exceed revenue by $45 million in the next year. 

Reuters said: According to media reports, the city attorney general James Penman said San Bernardino's city officials had been submitting false accounting documents for 13 of the last 16 years in an effort to hide the real financial situation of the city.

While the city believes that bankruptcy will save them from disaster, many are concerned that a reliance on bankruptcy protection would interfere with cities' ability to face touch financial situations.  

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