"With a third California city deciding to declare bankruptcy within two weeks, questions remain about whether they're canaries in California's economic coal mine or just a few outliers that couldn't sustain their spending amid an economic downturn.
|San Bernardino downtown|
Stockton, with a population of almost 296,000, two weeks ago became the largest U.S. city ever to seek bankruptcy protection. Mammoth Lakes, a Mono County town of about 8,300, followed suit July 3.And the city council of San Bernardino, with almost 212,000 residents, did likewise Tuesday night. Mammoth Lakes is a special case, hit with a $43 million judgment in a developer's breach-of-contract lawsuit; the town's current general-fund budget is only $19 million.
.... "Overall across the state we're going to see more of these, and I'm surprised to see anybody surprised by it," said former state finance director Mike Genest, now a fiscal policy consultant. "Many of us have been predicting a substantial number of municipal bankruptcies in California for quite some time, and those predictions are starting to come true." Times-Herald/Josh Richman/Media News Group (serving Solano and Napa Counties), 7/12/12, "Are cities' bankruptcies flukes, or first dominoes to fall?" Read Article.
|North of town|
.... On Tuesday, the City Council voted to seek Chapter 9 bankruptcy protection, a section of federal law for municipalities facing insolvency. Interim City Manager Andrea Miller told the council that the city faced a $45.8-million budget shortfall, the equivalent of about 35% of the city’s annual budget, and would not be able make payroll this summer. "Los Angeles Times/local, 7/12/12. "San Bernardino bankruptcy: Criminal probe underway." Read Article.
|Home of the 1st McDonald's|
"I have not found that there's anything more than negligence, maybe sloppiness," she told the Los Angeles Times on Thursday. .... The problems stem from weak property and sales tax revenues combined with escalating pension costs and a loss of state redevelopment funds, city officials said." Bradenton Herald (Bradenton, Florida)/Associated Press/Amy Taxin and David R. Martin, 7/12/12. "Sheriff, DA investigating bankruptcy-bound CA City." Read Article.
Submitted by Jim Alex
Posted by Kathy Meeh