Another Day Another City Files Bankruptcy

“San Bernardino on Tuesday became the third California city in less than a month to seek bankruptcy protection, with officials saying the financial situation had become so dire that it could not cover payroll through the summer.

The unexpected vote came at the suggestion of the interim city manager, who said the city faces a $46-million deficit and depleted coffers….[It is the third California City to file in recent weeks.]
Stockton, a Central Valley agricultural hub with pockets of entrenched poverty, tried to remake itself during the last decade as a refuge for former San Francisco Bay Area residents. It spent money on a marina, a high-rise hotel and a promenade. They flopped.

Residents also got swept up in the boom years, snapping up new tract homes on the city’s outskirts. Soon, many of them were empty, victims of the nationwide foreclosure crisis.

Stockton has one of the highest foreclosure rates in the country.

Tax collection plummeted and the city struggled to pay its debts. It also sized up its labor contracts and declared them unsustainable. Last month — after a lengthy period of mediation — the Stockton City Council voted to stop bond payments, gut employee health and retirement benefits, and squeak by on a spartan budget.

“This is what we must do to get our fiscal house in order and protect the safety and welfare of our citizens,” Mayor Ann Johnston said in a statement when the city filed its bankruptcy paperwork.

Days later, the High Sierra town of Mammoth Lakes — population: 7,700 — also filed for bankruptcy. Its plight had little to do with the recession.”

Here is a link to the video and article: http://www.latimes.com/news/local/la-me-0711-san-bernardino-20120711,0,5646419.story

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