"Calif. city becomes largest in US to file for bankruptcy" June 28, 2012
STOCKTON, Calif. — In opting to become the nation’s largest city to seek federal bankruptcy protection, Stockton took a rare financial step of last resort after struggling with the economic downturn, soaring pension costs, and contractual obligations.
Thirteen cities, counties, and other government entities filed for bankruptcy protection last year — the highest annual level in nearly two decades.
Stockton, a river port of 290,000, was the seventh US municipality to file this year and the first California city since Vallejo, which sought protection in 2008, according to James Spiotto, a Chicago bankruptcy attorney who tracks municipal bankruptcies.
‘‘Filing bankruptcy is time-consuming, expensive, and complicated,’’ said Spiotto, noting that Vallejo spent millions of dollars alone on attorneys and other bankruptcy professionals. ‘‘And you never get the results you desire.’’
Related: Alabama: Bullies and Bankruptcy
Turns out banks are the biggest bullies of all.
That’s why specialists are divided on whether other financially struggling cities, towns, and government entities will follow Stockton to bankruptcy court. Spiotto said it will be hard and expensive for Stockton to obtain financing.
Others also say bankruptcy comes with non-monetary costs.
‘‘Being in bankruptcy is decimating to your staff and morale,’’ said Deborah Lauchner, Vallejo’s finance director....
Like in Detroit?
‘‘Bankruptcy is a huge drain on municipalities, because they have limited ways to create more revenue,’’ said Los Angeles bankruptcy lawyer Karol Denniston.
Because they have taxed damn near everything -- twice.
Stockton City Manager Bob Deis said officials were left with little choice but to recommend bankruptcy after failing to hammer out finance deals with creditors to address the city’s $26 million budget shortfall.
The banks want to be paid in full now, or let's just add some more interest if it's later.
‘‘Unfortunately, we have no comprehensive set of agreements with our creditors that would eliminate the deficit and avoid insolvency,’’ Deis said at the City Council meeting Tuesday night. He said, however, that the city was still negotiating with some creditors and could reach deals with as many as one-third of them.
‘‘We think Chapter 9 protection is the only choice left,’’ Deis said. ‘‘If we get any agreements, those will be honored in Chapter 9.’’
On Tuesday, the City Council voted 6-1 to adopt a special bankruptcy budget to address Stockton’s $26 million shortfall if the city files for bankruptcy, as expected, by Friday.
The city has been hit hard by high crime and the collapse of the housing market in the past three years. It has also dealt with $90 million in deficits through a series of drastic cuts.
The new budget did not call for additional service cuts beyond those that earlier slashed the police force by one-fourth, the fire department by one-third, and other city employees by 40 percent, along with wages and medical benefits.
The new budget would suspend payments for debts and legal claims; reduce payments for retiree medical benefits; further cut some pay and benefits; and increase revenue through code enforcement and parking citations.
I sure don't like the cops handing out more tickets stuff; however, I DO LIKE that FIRST ONE!
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Related: California Bankruptcies
It's the whole state, not just Stockton.
And they approve thi$?
"California legislators OK high-speed rail line" Associated Press July 08, 2012
SACRAMENTO — California lawmakers gave the green light to start building the nation’s first continuous high-speed rail line, a multibillion dollar project to link Los Angeles and San Francisco. In a 21-to-16 party-line vote Friday, the state Senate approved a $2.6 billion bond issue to fund a 130-mile section of the line. The Assembly has approved the bill, and Governor Jerry Brown has promised to sign it."
So how much interest is going to be tacked on to that?
Maybe you ought to bring back the trolley instead.
I see Brown is working for the $pecial interests now. What a far cry from 1992.
In addition to the fiscal bankruptcy there is moral rot on the left coast:
"Calif. official accused of sex assaults" by Amy Taxin | Associated Press, July 04, 2012
SANTA ANA, Calif. — A Southern California city councilman has been charged with sexually assaulting seven women when he was a high-ranking county executive in what prosecutors said Tuesday was an abuse of power and public trust.
Carlos Bustamante, 47, a former Orange County Public Works administration manager, is facing 12 felony charges ranging from false imprisonment to sex offenses stemming from his work at the county over eight years until he resigned his post in 2011.
Bustamante, a Santa Ana councilman, called female employees to his office under the pretense of discussing work and kissed and grabbed them, and sometimes masturbated in front of them, prosecutors said.
What a sickie!
The women were reluctant to come forward, fearing they would lose their jobs for speaking out against Bustamante, who was considered by some a rising star in Orange County politics.
‘‘This case exemplifies an abuse of power, an abuse of position, abuse of women, and abuse of trust,’’ Orange County District Attorney Tony Rackauckas said.
Public servant, right?
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Also see: Scott Peterson appeals ’04 death sentence
Update: Drew Peterson introduces self to would-be jurors
Trial starts in wildfire tied to 5 deaths
Injured Calif. hiker saves rescuer hit by copter blades
Sinking of $3.2 million yacht at Tahoe a mystery
Plane carrying 4 lands safely on California freeway
I'm out of ideas.
