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Stockton is preparing to default. Santa Ana is outsourcing its fire department. They are not alone. Other California cities, like Bakersfield, are similarly in peril. Much of the problem is due to debt taken on during the real estate bubble and overwhelming public pension liabilities. Probably the only way out for most of these cities [...] Vallejo is the poster child for what’s ailing California cities. It filed for bankruptcy in 2008, a victim of the real estate crash, losing a major employer in the process, and facing pension costs it cannot possibly meet. Its police department was cut by one-third, and no longer has the resources to focus on [...] (My latest for CAIVN) Central Falls, a densely populated and impoverished city of nearly 20,000 in Rhode Island, filed for Chapter 9 bankruptcy on August 1, citing unaffordable pension and retiree health care liabilities. The city said it had no choice after retirees refused to accept any cuts. A retired state Supreme Court judge [...] The city said municipal workers must now pay 20% of their medical coverage and that everything was done to avoid this day but the unions wouldn’t budge. Mish Central Falls was bankrupt years ago and I said so repeatedly. The costs on taxpayers to delay this bankruptcy have been severe. Once states realize that [...] They say no publicity is bad publicity, but doubtless Vallejo doesn’t feel that way after being ranked by two national magazines as a deeply undesirable place to live. Newsweek ranked Vallejo the #2 dying city due to its overall population decline between 2000 and 2009 and its decline in residents under 18. They also [...] During the Great Depression, Congress passed an act saying states and municipalities could file for bankruptcy. The law was challenged and part of it was overturned by the Supreme Court in 1936 in Ashton v. Cameron County Water Imp. Dist. Congress then rewrote the law so that municipalities could file bankruptcy. However, the Supreme Court [...] In 2008, the California city of Vallejo took the unprecedented step of filing for bankruptcy. A combination of falling revenues caused by the collapse of the real estate bubble and rising public pension costs cratered their finances. Other California cities and counties are watching how Vallejo manages, and may well follow suit. Indeed, former [...] Sue is now associated with Forensic Financial Partners. Forensic Financial Partners, LLC provides financial advisory services to government agencies, financial institutions, and counsel. Our skills and background uniquely qualify us to manage large investigations while charting political minefields when pursuing claims against third parties, such as directors, officers, investors, and large builders. Services and [...] Pacific Grove CA may follow Vallejo in filing a Chapter 9 bankruptcy. A primary reason is that CalPERS, the state pension fund, is facing huge losses and can force public agencies like Pacific Grove to make up the difference. A judge recently ruled that the Chapter 9 bankruptcy by Vallejo gives them the authority to [...] |  | ||||
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