Stockton seeks solvency by slashing
June 21, 2012
Hoping to avoid becoming the latest — and biggest — U.S. city to enter bankruptcy, officials of the California Delta city of Stockton hope to avoid that eventuality by skipping payment of $10.2 million in debt service and slashing employee pay and benefits. (Bloomberg News)
Stockton, with 292,000 residents and known as one of the nation’s top-ten violent crime centers, currently has an operating shortfall of $25.9 million.
A plan will be presented June 26 to the city council to address the situation, said City Manager Bob Deis.
The official has pointed to escalating health costs for pensioners and overstatement of municipal revenue as major reasons for the city’s insolvency. His plan would generate a general-fund surplus of $39,000 by shaving $12 million in expenditures, including $7.1 million in payments for retiree medical benefits for one year. Those retiree payments would then be eliminated the following year.