Barring a massive and unlikely change, it’s only a matter of time now before the fourth California community this year files for municipal bankruptcy.
Atwater lawmakers/policymakers, as expected, met Wednesday – in both closed and open session -- to discuss the possibility of declaring a fiscal emergency, a move that would circumvent the 2011 California mandate that forces municipalities to the table with creditors for a period of no less than 90 days before a Chapter 9 legally can be filed. They voted to do just that amid a more than $4 million shortfall caused by the lengthy and sizable real estate downturn there as well as the growing cost of employee/retiree pensions and other entitlements.
Though a Chapter 9 bankruptcy has not been filed on the city’s behalf yet officially, declaring the fiscal emergency mirrors the play made by San Bernardino, one of three California communities to file for municipal bankruptcy in the last year, and is as thinly veiled an indicator as possible that such a move is imminent.
-Brian Shappell, CBA, NACM staff writer