It is being reported that Stockton will take the first steps toward seeking bankruptcy protection from its creditors at its next council meeting on Tuesday, February 28th. Mayor Ann Johnston reportedly commented, "Stay tuned." The Record reports that "While city administrators remained silent on any plans, it became an open secret Wednesday. The Downtown Stockton Alliance board of directors in a public meeting discussed the city's bankruptcy timetable."
Notably, it was only last month that the city's mayor was quoted as saying Stockton wanted to avoid Vallejo's fate, with Johnston stating, "We're not moving in that direction whatsoever." In preparation for what's to come on Tuesday's meeting, City Manager Bob Deis is scheduled to provide a briefing tomorrow on the city's fiscal status.
Ultimately, talks of insolvency have been in the pipeline for quite awhile in the struggling city. Stockton's financial woes have been a persistent headline and severe cuts, especially to public safety, have made the city's dire budget position a sore point, as the city was ranked as having the eighth-highest violent crime rate in the country in 2010. Notably, a state of fiscal emergency has been declared twice since 2010 so that cuts could be imposed on city employees.
If bankruptcy talks proceed, Stockton would become the largest city in the nation to file for bankruptcy. Startlingly, it would be the biggest bankruptcy since Vallejo's in 2008. All eyes will be on Stockton in the next few days as key moves are debated and decided.
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