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3026 Dead
Jun 27, 2012, 11:05:07 AM6/27/12
to
http://www.mcclatchydc.com/2012/06/27/154012/stockton-california-to-file-
for.html
Stockton, California to file for Chapter 9 bankruptcy
Peter Hecht | The Sacramento Bee
STOCKTON, California — Years after betting on a sustained housing boom to
bankroll a waterfront redevelopment and dole out salary and benefit perks
to city employees and retirees, Stockton cashed in its chips Tuesday in a
plan that will lead it into bankruptcy.
The City Council voted to approve an austerity plan, including stopping
bond payments and making deep cuts in retiree health care, as part of a
plan to file Chapter 9 bankruptcy.
The insolvent city of nearly 300,000 residents, home to America's second-
highest rate of foreclosure, is now certain of the additional ignominy of
becoming the largest city in America to declare bankruptcy.
Only six years ago, Stockton had appeared to be a boomtown as median home
prices shot up from $110,000 to $400,000.
Bursting with new tax revenue and anticipating 10 percent annual
increases in its budget resources, Stockton cashed in by selling bonds
for an urban renewal including a $68 million arena and invested $125
million in a pension fund that resulted in fiscal disaster.
On Tuesday night, in preparation for the bankruptcy filing, the City
Council voted 6-1 to enact a plan to slash retiree health coverage
starting this year and possibly eliminate it next year.
Stockton also will use bankruptcy protection to suspend contracts with
its public employee unions to cut city employee pay and benefits. It will
also stop bond payments as it seeks protection from creditors and
renegotiates its debts.
"Unfortunately we're running out of cash very quickly," said Stockton
Mayor Ann Johnston in advocating an austerity plan for seeking Chapter 9
municipal bankruptcy protection. "We don't have the resources to pay our
bills. We have to figure out how we can continue to keep a balanced
budget but provide the basic services for our community."
She added, "It's a sad day in the city of Stockton."
The cuts in health care benefits stirred an emotional response from
numerous retirees, including Geri Ridge, a police records clerk for 26
years. Ridge told City Council members of the two heart attacks she
suffered – the last that ended her career and nearly killed her. She said
she lives on $1,895 monthly retirement income – but now faces the
prospect of spending nearly every penny to replace her lost health
coverage.
"You made promises that we would be taken care of when we retired. Now
you tell me, 'No.' … What is wrong with you people?"
Gary Jones' voice cracked with anguish as he addressed the council.
"If I lose this medical, for me it might as well be a life sentence,"
said the retired Stockton police officer who had surgery to remove a
brain tumor and endured radiation treatment for the past year.
The intense City Council session was marked by Johnston ordering security
officers to remove a woman in the audience for clapping for a speaker
haranguing the council.
That only infuriated Stockton restaurant owner Adolph Egoroff, who
blasted officials for taking a dismissive attitude toward citizens while
bringing fiscal shame on the city.
"Your smirks and your … lack of concern for us does not go unnoticed,"
Egoroff said. "I have a voice for the people of Stockton who do not want
this bankruptcy. "
City Manager Bob Deis told City Council members this month that Stockton
was insolvent and needed an emergency budget plan to be able to pay its
bills after July unless major concessions were reached with the city's
creditors, employee groups and retirees by Monday.
On Tuesday night, Deis said the city was close to reaching deals with
about one-third of its creditors and seven of nine labor groups but that
they weren't enough to balance the budget, though the agreements could
become part of a bankruptcy settlement.
Stockton faces a $26 million deficit in a $521 million city budget after
making cuts to address $90 million in deficits over the past three years.
The city's bond rating is in junk status after disastrous financial
decisions, including selling pension bonds to invest $125 million in a
CalPERS pension fund that is now worth $100 million and will cost the
city $248 million in payments.
A $48 million office building, purchased by Stockton for a new city hall,
was repossessed by creditors along with three city parking garages. The
city did complete a $129 million redevelopment of its waterfront, and the
new downtown arena remains underbooked.
The city, which once counted on a 10 percent annual growth in its general
fund tax revenue, has the nation's second-highest rate for home
foreclosures and a plummeting local tax base.
Read more here: http://www.mcclatchydc.com/2012/06/27/154012/stockton-
california-to-file-for.html#storylink=cpy
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for.html
Stockton, California to file for Chapter 9 bankruptcy
Peter Hecht | The Sacramento Bee
STOCKTON, California — Years after betting on a sustained housing boom to
bankroll a waterfront redevelopment and dole out salary and benefit perks
to city employees and retirees, Stockton cashed in its chips Tuesday in a
plan that will lead it into bankruptcy.
The City Council voted to approve an austerity plan, including stopping
bond payments and making deep cuts in retiree health care, as part of a
plan to file Chapter 9 bankruptcy.
The insolvent city of nearly 300,000 residents, home to America's second-
highest rate of foreclosure, is now certain of the additional ignominy of
becoming the largest city in America to declare bankruptcy.
Only six years ago, Stockton had appeared to be a boomtown as median home
prices shot up from $110,000 to $400,000.
Bursting with new tax revenue and anticipating 10 percent annual
increases in its budget resources, Stockton cashed in by selling bonds
for an urban renewal including a $68 million arena and invested $125
million in a pension fund that resulted in fiscal disaster.
On Tuesday night, in preparation for the bankruptcy filing, the City
Council voted 6-1 to enact a plan to slash retiree health coverage
starting this year and possibly eliminate it next year.
Stockton also will use bankruptcy protection to suspend contracts with
its public employee unions to cut city employee pay and benefits. It will
also stop bond payments as it seeks protection from creditors and
renegotiates its debts.
"Unfortunately we're running out of cash very quickly," said Stockton
Mayor Ann Johnston in advocating an austerity plan for seeking Chapter 9
municipal bankruptcy protection. "We don't have the resources to pay our
bills. We have to figure out how we can continue to keep a balanced
budget but provide the basic services for our community."
She added, "It's a sad day in the city of Stockton."
The cuts in health care benefits stirred an emotional response from
numerous retirees, including Geri Ridge, a police records clerk for 26
years. Ridge told City Council members of the two heart attacks she
suffered – the last that ended her career and nearly killed her. She said
she lives on $1,895 monthly retirement income – but now faces the
prospect of spending nearly every penny to replace her lost health
coverage.
"You made promises that we would be taken care of when we retired. Now
you tell me, 'No.' … What is wrong with you people?"
Gary Jones' voice cracked with anguish as he addressed the council.
"If I lose this medical, for me it might as well be a life sentence,"
said the retired Stockton police officer who had surgery to remove a
brain tumor and endured radiation treatment for the past year.
The intense City Council session was marked by Johnston ordering security
officers to remove a woman in the audience for clapping for a speaker
haranguing the council.
That only infuriated Stockton restaurant owner Adolph Egoroff, who
blasted officials for taking a dismissive attitude toward citizens while
bringing fiscal shame on the city.
"Your smirks and your … lack of concern for us does not go unnoticed,"
Egoroff said. "I have a voice for the people of Stockton who do not want
this bankruptcy. "
City Manager Bob Deis told City Council members this month that Stockton
was insolvent and needed an emergency budget plan to be able to pay its
bills after July unless major concessions were reached with the city's
creditors, employee groups and retirees by Monday.
On Tuesday night, Deis said the city was close to reaching deals with
about one-third of its creditors and seven of nine labor groups but that
they weren't enough to balance the budget, though the agreements could
become part of a bankruptcy settlement.
Stockton faces a $26 million deficit in a $521 million city budget after
making cuts to address $90 million in deficits over the past three years.
The city's bond rating is in junk status after disastrous financial
decisions, including selling pension bonds to invest $125 million in a
CalPERS pension fund that is now worth $100 million and will cost the
city $248 million in payments.
A $48 million office building, purchased by Stockton for a new city hall,
was repossessed by creditors along with three city parking garages. The
city did complete a $129 million redevelopment of its waterfront, and the
new downtown arena remains underbooked.
The city, which once counted on a 10 percent annual growth in its general
fund tax revenue, has the nation's second-highest rate for home
foreclosures and a plummeting local tax base.
Read more here: http://www.mcclatchydc.com/2012/06/27/154012/stockton-
california-to-file-for.html#storylink=cpy
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Not dead, in jail or a slave? Thank a liberal!
Message has been deleted
ColdWarDinosaur
Jun 29, 2012, 5:33:35 AM6/29/12
to
On 6/28/2012 10:51 PM, Mr.B1ack wrote:
> FAR ahead - TOO far. They'd committed a lot of money
> back during the 'boom' when the future seemed sunny
> (bright enough to dazzle the eye it seems - 'cause
> it was hard to miss the falseness, hollowness, of
> that 'boom'). And then the boom went bust ... but
> they'd already contracted for all that construction,
> all those employees and investments and couldn't
> back out.
>
> So it broke them.
>
> A lot of Joe Averages ran up large debts and/or
> took out huge mortgages ASSUMING the good times
> would only get better forever and it's be EASY
> to pay off all those debts.
>
> And it broke them.
>
> So, the question is 'How far ahead is it SAFE to
> plan ?'.
>
> Probably about only two years.
>
> Individuals can manage within those boundaries, but
> it's harder for businesses and MUCH harder for govt.
> The larger the concern, the more important it is to
> plan ahead. Civic projects can take a decade or more
> to complete even in a steady economy. A two-year
> window kinda restricts govt to doing PIDDLY stuff
> rather than 'building the future'.
>
> But maybe that's how it HAS to be now ... maybe for
> a long time to come. Big changes have happened and
> some of the old paradigms and procedures became
> obsolete.
>
Get an independent forensic auditor to go over Stockton's books first...
--
~~
HW
__________________
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http://www.commoncause.org/
http://www.stopbigmedia.com/
http:///www.blackboxvoting.org
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http://mediamatters.org/
> 3026 Dead <de...@gone.com> wrote:
>
>> http://www.mcclatchydc.com/2012/06/27/154012/stockton-california-to-file-
>> for.html
>>
>> Stockton, California to file for Chapter 9 bankruptcy
>> Peter Hecht | The Sacramento Bee
>
> Cities, like big businesses and banks, often plan
>
>> http://www.mcclatchydc.com/2012/06/27/154012/stockton-california-to-file-
>> for.html
>>
>> Stockton, California to file for Chapter 9 bankruptcy
>> Peter Hecht | The Sacramento Bee
>
> FAR ahead - TOO far. They'd committed a lot of money
> back during the 'boom' when the future seemed sunny
> (bright enough to dazzle the eye it seems - 'cause
> it was hard to miss the falseness, hollowness, of
> that 'boom'). And then the boom went bust ... but
> they'd already contracted for all that construction,
> all those employees and investments and couldn't
> back out.
>
> So it broke them.
>
> A lot of Joe Averages ran up large debts and/or
> took out huge mortgages ASSUMING the good times
> would only get better forever and it's be EASY
> to pay off all those debts.
>
> And it broke them.
>
> So, the question is 'How far ahead is it SAFE to
> plan ?'.
>
> Probably about only two years.
>
> Individuals can manage within those boundaries, but
> it's harder for businesses and MUCH harder for govt.
> The larger the concern, the more important it is to
> plan ahead. Civic projects can take a decade or more
> to complete even in a steady economy. A two-year
> window kinda restricts govt to doing PIDDLY stuff
> rather than 'building the future'.
>
> But maybe that's how it HAS to be now ... maybe for
> a long time to come. Big changes have happened and
> some of the old paradigms and procedures became
> obsolete.
>
Get an independent forensic auditor to go over Stockton's books first...
--
~~
HW
__________________
http://www.opensecrets.org/
http://www.commoncause.org/
http://www.stopbigmedia.com/
http:///www.blackboxvoting.org
http://www.freepress.net/
http://www.prwatch.org/
http://www.alternet.org/
http://mediamatters.org/
Message has been deleted
Liberal Here
Jul 2, 2012, 3:29:14 PM7/2/12
to
On Jun 29, 11:29 pm, Mr.B1ack <b...@barrk.net> wrote:
> >> 3026 Dead <d...@gone.com> wrote:
>
> >>>http://www.mcclatchydc.com/2012/06/27/154012/stockton-california-to-f...
> No ... don't bother with a 'waste' witch-hunt. That's
> not really the problem, as I extrapolated above.
>
> Wouldn't hurt to look for some CORRUPTION however ...
> juicy deals between elected officials and certain
> friendly campaign-donating private contractors. Bound
> to be some of that. Hey, why do you think the Feds are
> trying to destroy the Postal Service ? No kickbacks,
> that's why. They CAN get kickbacks and donations out
> of any PRIVATE businesses that take over the Postal
> Service's functions though ....
>
> When in search of Truth, follow the money.
>
> Alas, this planning/execution window issue DOES exist
> for governments (and biz to some extent also). Now
> that the global economy has become a roller-coaster
> and any 'recovery' is likely to be just an on-paper,
> fake, recovery ... how the hell do you plan, execute
> and finance anything that can't be finished RIGHT NOW ?
>
> Hell, you can schedule a new bypass ... and by the time
> you've signed contracts with all the necessary actors
> your tax-base has shriveled like a raisin and you can't
> PAY them. Then they sue you for breech of contract
> because THEY had already spent that money before they
> got it too ..... a real, serious, PROBLEM.
>
> IMHO, the only fix - and it's imperfect - is for govt
> entities to ACCUMULATE the necessary money for what they
> have in mind ... put it somewhere safe until it's clearly
> enough ... and THEN commence with the project. There are
Oops.....then a Bush 1/2 comes along and claims the nasty ol'
government is taking too much of poor Mitt Romney's money...or the
Koch brothers' money.
While I completely agree with the "save to spend" concept (and employ
it in my purcasing behavior, never had an auto loan.....cash every
time) it's you conserva-loons who shake the piggy bank empty before
the targeted project can begin.
> certain issues with this, not least being that the public
> won't like govt 'hoarding' tax money. But, it HAS to be
> done that way ... because 'dynamic funding', relying on
> next years tax revenues, has proven to be fatally dangerous
> in these days and time.
> >> 3026 Dead <d...@gone.com> wrote:
>
> >>>http://www.mcclatchydc.com/2012/06/27/154012/stockton-california-to-f...
> not really the problem, as I extrapolated above.
>
> Wouldn't hurt to look for some CORRUPTION however ...
> juicy deals between elected officials and certain
> friendly campaign-donating private contractors. Bound
> to be some of that. Hey, why do you think the Feds are
> trying to destroy the Postal Service ? No kickbacks,
> that's why. They CAN get kickbacks and donations out
> of any PRIVATE businesses that take over the Postal
> Service's functions though ....
>
> When in search of Truth, follow the money.
>
> Alas, this planning/execution window issue DOES exist
> for governments (and biz to some extent also). Now
> that the global economy has become a roller-coaster
> and any 'recovery' is likely to be just an on-paper,
> fake, recovery ... how the hell do you plan, execute
> and finance anything that can't be finished RIGHT NOW ?
>
> Hell, you can schedule a new bypass ... and by the time
> you've signed contracts with all the necessary actors
> your tax-base has shriveled like a raisin and you can't
> PAY them. Then they sue you for breech of contract
> because THEY had already spent that money before they
> got it too ..... a real, serious, PROBLEM.
>
> IMHO, the only fix - and it's imperfect - is for govt
> entities to ACCUMULATE the necessary money for what they
> have in mind ... put it somewhere safe until it's clearly
> enough ... and THEN commence with the project. There are
Oops.....then a Bush 1/2 comes along and claims the nasty ol'
government is taking too much of poor Mitt Romney's money...or the
Koch brothers' money.
While I completely agree with the "save to spend" concept (and employ
it in my purcasing behavior, never had an auto loan.....cash every
time) it's you conserva-loons who shake the piggy bank empty before
the targeted project can begin.
> certain issues with this, not least being that the public
> won't like govt 'hoarding' tax money. But, it HAS to be
> done that way ... because 'dynamic funding', relying on
> next years tax revenues, has proven to be fatally dangerous
> in these days and time.
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