Sunday, February 26, 2012

Stockton, CA - large city considering bankruptcy


Bloomberg Businessweek/Alison Vekshin and Michael B. Morois, 2/26/12.  "Stockton to take steps toward bankruptcy, city manager says."

Stockton national high crime city even with advantages.
"Stockton, California, may take the first steps toward becoming the most populous U.S. city to file for bankruptcy next week because of burdensome employee costs, excessive debt and bookkeeping errors that misrepresented accounts, city officials said today. 

The Stockton City Council will meet Feb. 28 to consider a type of mediation that allows creditors to participate, the first move toward a Chapter 9 bankruptcy filing under a new state law. The council will also weigh suspending some payments on long-term debt of about $702 million, according to a 2010 financial statement. 

“Somebody has to suffer and in this case the city manager has decided it should be the bondholders who suffer,” Marc Levinson of the Sacramento-based law firm Orrick, Herrington & Sutcliffe LLP, which represents the city, said at a news briefing at Stockton’s City Hall today. Stockton, a farming center about 80 miles (130 kilometers) east of San Francisco, has fought to avert bankruptcy by shrinking its payroll, including a quarter of the roughly 425- member police force. At 292,000, the city has more than twice as many residents as Vallejo, California, which became a national symbol for distressed municipal finance in 2008 when it sought protection from creditors. Read more.

ReferencesCity of Stockton website.  Forbes list, ranked #2, Worst places to live, 4:52 minute video, 3/24/10., Jon Stossel and Bill O'Reilly discussion.

Submitted by Jim Alex

Posted by Kathy Meeh

1 comment:

Hutch said...

Pacifica's pension obligation to Calpers is over 20 million http://royceprinting.com/jobs/FOSarchive/2010FOS/05_06_10_PacificaFOS.pdf

It's not "if" we will be in the position of Stockton. It's WHEN.

All these bandaids are not going to save Pacifica's festering rotten limb. We need to amputate, and the sooner the less painful it will be.