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Politics : The Obama - Clinton Disaster -- Ignore unavailable to you. Want to Upgrade?

To: Honey_Bee who wrote (66598)	2/25/2012 12:54:06 PM
From: Hope Praytochange	Read Replies (1) \| Respond to of 103300

By MIKE CHERNEY And KELLY NOLAN Stockton, Calif., one of the hardest-hit cities in the country in terms of real-estate foreclosures, is weighing whether to seek Chapter 9 bankruptcy protection from its creditors. "The city is in an immediate and severe fiscal crisis and it is or likely will become unable to meet its financial obligations," City Manager Bob Deis wrote in a memo to council members. "Absent some negotiated adjustments to the city's financial obligations, the city will be insolvent and will have no alternative than to seek bankruptcy protection." The City Council will meet Tuesday to consider a resolution that will authorize the city to enter a "neutral evaluation process" with creditors, which is the first step under state law for a municipality considering bankruptcy. The resolution would also allow the city manager to suspend certain bond payments for the rest of the fiscal year. Mr. Deis's memo called the evaluation process "intense and complex," and said it hadn't been tried by any agency in California. The California law that requires it was just signed by the governor last year. The resolution would also authorize the city attorney and city manager to launch an investigation of the cause of the city's financial doldrums. For the fiscal year that began July 1, 2011, the budget deficit was $37 million, about one-fifth of the city's general fund revenue. According to data from RealtyTrac, Stockton has ranked in the top 10 metro foreclosure rates every year since 2007, when it was No. 1. Meanwhile, the city's unemployment level has nearly doubled since 2006, hovering around 16% in December 2011, according to the U.S. Bureau of Labor Statistics. Stockton, a city of about 290,000, is about 80 miles from San Francisco and 45 miles from the state capital, Sacramento. Last year, Stockton again declared a state of fiscal emergency, allowing it to make steep spending cuts as it tried to rebuild its finances. In a budget message last June, Mr. Deis said Stockton was nearing "insolvency." "Reserves in the general fund are exhausted," Mr. Deis said. He added that the city was straddled with "multiyear labor contracts with escalating costs that simply cannot be paid with anticipated revenues in the foreseeable future." According to Standard & Poor's, the police department made up $84.9 million, or 52%, of preliminary 2012 general fund budget expenses, while the fire department made up $39.8 million, or 30%.