Stockton mayor says city considering filing bankruptcy; would be largest US city to file
STOCKTON, Calif. (KABC) -- Stockton is on the verge of becoming the largest American city to declare bankruptcy. Filing could come Wednesday.
Behind the banner calling itself the "All-America City," the Stockton City Council meets to decide whether to become the largest U.S. municipality to ever file for bankruptcy.
Mayor Ann Johnston won't know whether the now-expired 90-day mediation period with creditors worked to prevent bankruptcy until the report is presented later, but it doesn't look good.
"I had hoped, like everyone else, that we would not be at this place and time, that we would get beyond this, we would have solved our fiscal situation," said Johnston.
Before the Great Recession, the city of nearly 300,000 thought the good times would stay forever brought on by the housing boom.
They improved the downtown waterfront with an impressive marina and built a fancy new arena.
They even boosted retiree benefits, giving city workers and their spouses healthcare for life after only one month of service in some cases.
It's a hard lesson.
"Just because money's rolling in doesn't mean you spend it all," said Johnston.
Now banks have repossessed three parking garages and what was supposed to be the new $48-million city hall.
Residents appear split over whether Stockton should declare bankruptcy.
Stockton photographer Arnold Chin was so mad at Forbes for putting Stockton on its "most miserable cities" list twice that he sent the magazine pictures of happy residents. But after being robbed, he's now thinking of moving away because he calls the cutbacks in police life-threatening.
budget, economy, california news, nannette miranda
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