Stockton to pursue bankruptcy? | News
STOCKTON, CA - Several sources report that the City of Stockton will begin the process of declaring bankruptcy at next week's city council meeting.
Because of the high costs of running the city and an ongoing lack of tax revenue, Stockton is considering bankruptcy. It would follow Vallejo as a major California city to go that route.
The first step in that process involves opening a 60 day window in which mediation takes place with the goal of avoiding bankruptcy, that issue is expected to be on next Tuesday's agenda.
One city official said Vallejo ended up spending $11 million in attorneys fees, because the city is responsible for it's own fees and creditor fees. It's estimated Stockton could get stuck with $20 million in attorneys fees.
The city official said Stockton should find another way to solve their financial problems.
"If any municipality declares bankruptcy, whether it's Stockton or anyone else, what really doing is sealing their own economic death warrant, because it makes it that much harder to dig out of an economic hole," California Professional Firefighters Union spokesperson Carroll Wills said.
Caitlin Vega with the California Labor Federation said declaring bankruptcy is bad for jobs, the economy, and the community and that it should be avoided at all costs.
"It really tarnishes the reputation of a community," Vega said. "You look at a community like Vallejo which really struggled since the bankruptcy because who wants to do business in a bankrupt city?"
"Cities should have the authority to be able to determine if they need to seek federal bankruptcy protection," League of California Cities spokesperson Eva Spiegal said. "It's a matter of local control and decision making."
By Tim Daly, firstname.lastname@example.org
Reporter Suzanne Phan contributed to this story. email@example.com