STOCKTON, Calif. (AP) — The city of Stockton in California’s crop-abundant Central Valley has the second-highest foreclosure rate in the nation and one of the highest crime and unemployment rates. It was named America’s most miserable city in a national magazine — twice.
And now, officials say this river port city of 290,000 is on the brink of insolvency and could become the nation’s largest city to fall into Chapter 9 bankruptcy protection.
The City Council is considering a proposal to continue the city’s fiscal emergency for a third year and use a new California law to enter mediation with its creditors. Council members were still debating the issue and deciding whether to vote late Tuesday.
Stockton would be the first city to test the law, Assembly Bill 506, which is less than two months old. It requires local government agencies to undergo mediation or hold a public hearing and declare a fiscal emergency before filing for bankruptcy.
The Stockton Record reports (http://bit.ly/xw0joN ) that council members also may vote on whether to shift millions of dollars away from special programs, suspend vacation and sick-leave employee cash-outs, and miss payments on outstanding debts.
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