Stockton could declare bankruptcy today
STOCKTON, Calif. (KGO) -- The city of Stockton could officially declare bankruptcy as early as today. It would be the largest city in the country to ever do so.
The city is broke and in debt and time is up. The new fiscal year begins this Sunday, July 1. So the only question is - when between now and Friday, which is the deadline to file for bankruptcy, will the city file?
"I don't know what's going on with our city council, nor do I really understand what's happening with our council period," said Stockton resident Donnell Gaines.
Residents may not understand, but Stockton city leaders are hoping they will be understanding and trusting.
"I would say not to worry because we have it under control," said Mayor Ann Johnston of Stockton.
The city council just voted last night, six to one, to approve a special bankruptcy budget. It's designed to keep the city running day to day and plug next year's anticipated $26 million deficit.
"Unfortunately, it's the equivalent of like cutting off your arm to save the rest of the body," said Stockton City Manager Bob Deis.
The mayor promises police and fire won't be cut any further than they already have been. But, the bankruptcy budget does aim to save money by reducing retiree medical benefits and pensions.
"Did you guys even assume you had to look into this? Did you know it wasn't funded? And if you didn't know, shame on you," said retired firefighter Robert Rodrigues.
Something else that could rile residents, the budget aims to make money through code enforcement and parking tickets. Bankruptcy is a dark cloud over the city, but the mayor is looking for that silver lining.
"It's never over till it's over so we keep hoping with our fingers crossed that we're going to have some kind of settlement or at least a basis of a good settlement that could at least take us into Chapter 9 filing," said Johnston.
That settlement ship may have sailed. The city council voted on the budget yesterday, because Monday was the deadline for the city to reach a deal with creditors to restructure hundreds of millions of dollars of debt under a new state law designed to help municipalities avoid bankruptcy.
bankruptcy, california budget crisis, stockton, economy, california news
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