Oh Zee's Words of Wisdom: Stockton, CA Filed for Bankruptcy, but What's Next...

Oh Zee's Words of Wisdom: Stockton, CA Filed for Bankruptcy, but What's Next...: Stockton, California files for bankruptcy By Jim Christie SAN FRANCISCO | Thu Jun 28, 2012 11:49pm EDT (Reuters) - Stockton, Californi...

Tonight Stockton Will Decide To Go Forward With Bankruptcy or Not

What would your solution be, if you were one of the council members during all the bankruptcy negotiations with the City's creditors?

One has to begin contemplating, whether our city leaders have even tried to figure this whole problem out, or if they are just sweeping it under the rug? The real question that needs to asked, is when are "we" as a community going to elect accountable people to run this city?

There are plenty of faults that could be dished out, but I'd rather look at possible solutions, rather than focusing on the things in the past that put Stockton in this dreadful financial situation. Staying positive is Stockton's #1 priority, if any do in fact exist.

Let me break down the gist of "staying positive." It may seem hard to do in a city that was ranked the most miserable place to live by FORBES magazine, in 2010 and 2012. But there is always two ways to look at everything, some bad occurrences may show some type of positive results.

Murder is always bad, and some times it is just outright evil. However there is a positive spin to everything, in this case, maybe the person who was shot jumped in the line of fire to protect a woman or child. If this dead man's life can be summed up in one word, it would undoubtedly be "heroic."

Heroes are always looked at in a positive light, even if the hero was a high-school drop-out, who got addicted to multiple drugs, as well as alcohol, and spent six years in the corrections system. His last living moment he was a hero, not only to the girl whose life he saved, but to her entire family, as well as an inspiration to many others in the community.

This is just one example, but to every event in life, there are two ways to look at it!

"The past is the only thing that cannot be changed, so instead, try to apply just as much energy towards benefiting for the future, as you waste dwelling on the past. " Oh Zee (GP)

Vote Tuesday could send Stockton to bankruptcy court

Photo courtesy of Ben Margot


By Peter Hecht
phecht@sacbee.com
Published: Sunday, Jun. 24, 2012 - 12:00 am | Page 1A
Last Modified: Sunday, Jun. 24, 2012 - 3:12 pm

Barely five years ago, Stockton looked like a winner.

Local real estate values quadrupled between 2000 and 2006. City tax revenues skyrocketed. Stockton's general fund was growing by 10 percent a year. The port city redeveloped its waterfront and built a new arena. It gave pay raises to cops and cut deals in 2007 to boost pensions and pay for other employees.

Now Stockton is broke.

After years of bad budget decisions based on an overly rosy reading of the economy, Stockton – population 292,000 in 2010 – this week faces the ignominy of becoming the largest city in America ever to file for bankruptcy.

The City Council has scheduled a vote Tuesday on an austerity program that the city could carry out while in Chapter 9 bankruptcy reorganization, which would provide protection from creditors while it renegotiates its debts. Plans are to slash retired employees' health benefits, and perhaps eliminate them altogether; end city bond payments, and restructure labor agreements.

"The city is insolvent from a service and budget basis today and faces cash insolvency in its general fund by July 1," City Manager Bob Deis wrote to the City Council on June 5 – the same day the council voted to give Deis authority to take Stockton into bankruptcy reorganization.

In an effort to avert a bankruptcy filing, Stockton held last-minute negotiations to seek concessions from bondholders, employee unions and retirees. The city manager is scheduled to tell the City Council on Tuesday whether sufficient savings were found by the Monday deadline.

Deis could not be reached for comment last week. But in a letter he sent to employees on Thursday, he suggested that no miracle rescue is in the works. "At this point, the city must make plans to move forward and use the services and protections in bankruptcy to preserve basic health and safety services for the citizens of Stockton," Deis wrote.

This is not what city leaders had in mind.

Stockton was the place where the median home price shot up from $110,000 to $400,000 in six years. The city issued 3,000 new residential building permits a year between 2003 and 2005.

It was the place with the $129 million waterfront redevelopment, including a gleaming new $68 million arena for a minor league hockey team.

Read more here:

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GP Great O (Z)I ON

Stockton makes Bob Deis the Authority to go through with Bankruptcy

Stockton isn’t giving up on AB 506, but should the confidential mediation fail to realize significant savings by June 25, the city will have just three business days until it is general fund balances reach zero and the city becomes insolvent.

That’s why at Tuesday night’s City Council meeting, a majority of the council authorized the city manager to file for Chapter 9 Bankruptcy protection if AB 506 does fail. It wasn’t a vote for bankruptcy, it was a vote to prepare for a potential bankruptcy.

“We remain hopeful that we can reach an agreement with a sufficient number of our creditors to get our fiscal house in order,” said Mayor Ann Johnston. “However, we must have a plan for any possible outcome to protect the health, safety and welfare of our community and maintain basic services. Without significant fiscal relief, the General Fund will be out of money by June 30, 2012.”

While immediate deficits pose the greatest threat to the city’s solvency, the long-term implications of the city’s structural deficit continue to drive the city’s aggressive approach to cutting costs. According to the staff report produced by the city manager’s office, the “long term obligations approach $1 billion. Relief from such obligations can greatly improve the City’s viability.”

Contributing to that long-term imbalance are costs associated with personnel, including pension and retiree health benefits.






Over the past three years, the city has trimmed $90 million from its budget to ensure a balanced ledger. However, this year the deficit is pegged at another $23 million, $26 million if the city takes certain actions to stabilize its accounts and rebuild a responsible reserve. The annual deficits will continue for the next decade, reaching $46 million by 2015/16 and $56 million in 2020/21. That number could reach $88 million by 20/21, if salaries and benefits are restored to pre-concession levels.

Even as the confidential negotiations of AB 506 continue behind closed doors, , a very public debate continues in Stockton.

Those who supported moving into the AB 506 process – including the city’s mayor and city manager – continue to assert that further cuts to services will endanger public health and safety. Citing recent crime statistics in the staff report, city manager Bob Deis says that violent and gun crime has risen in recent years as a result of cuts to police.

“In 2011, there were 58 homicides in Stockton, an all time record,” reads the staff report. “At this time last year, there had been seven homicides, but as of May 4, 2012 we were already up to 23 for the year. We are also experiencing a 30% increase in gun violence from last year.”

Much of the blame for the current financial trouble has been placed on the city’s retirees and the cost of their healthcare.

In late 2011, those retirees formally incorporated their own association, the Association of Retired Employees of the City of Stockton. They are working to protect the benefits promised to retirees and are preparing to defend those benefits in bankruptcy court.

“While mediation is proceeding, I am no more optimistic today than on the day the City was required to begin the Mediation Process because the City Manager and the City Council (with the exception of Dale Fritchen) continue to publicly attack retiree medical,” writes the Association in a newsletter to members dated June 1.



“As a result of what has been reported to the Board of Directors concerning the real content of the mediation sessions… We are accelerating the process of preparing for a legal defense in bankruptcy,” continued the report to members.

The Association has retained the services of Felderstein, Fitzgerald, Willoughby & Pascuzzi LLP, the same firm that represented CalPERS in Vallejo’s bankruptcy case.

With the 6-1 vote, the city has opened the door to a potential bankruptcy filing.

“We will come through the AB 506 process or chapter 9 with a financially sustainable future,” said Mayor Johnson. “Even though we have inherited this mess, we are committed to doing everything in our power to leave this City better, stronger and healthier.”




Ron Paul asks the RIGHT Questions!

Get out Your Vote Today.

By The Record
June 04, 2012 12:00 AM
STOCKTON - The Stockton Police Officers Association on Sunday announced its endorsements for the upcoming race for Stockton City Council.

The union representing Stockton's police officers picked only one incumbent in four races up for election this year.

That incumbent is District 6 Councilman Dale Fritchen. The group endorsed Moses Zapien in District 4 and Randy Hatch in District 2. In the race for mayor, the group endorsed Anthony Silva. (But the Police used a quote from Greg Pitsch?)

Fritchen is running against Michael Tubbs. Zapien is running against incumbent Councilwoman Diana Lowery and Theresa Velazquez. Hatch is running against Councilwoman Kathy Miller.

In the race for mayor, Silva is running against incumbent Ann Johnston, and Ralph Lee White, Jimmie Rishwain, James Butler and Gregory Pitsch.

The primary is Tuesday. The district city council races will not be decided until November, when voters citywide choose district winners. Only the top two candidates in each district will progress to the November contest.

The mayor's race, however, could be decided if one candidate receives more than 50 percent of the vote Tuesday. If nobody wins a majority of votes, the top two candidates will compete in a November runoff.

Oh Zee's Words of Wisdom: The Future of Stockton is with EVI

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Oh Zee's Words of Wisdom: The Future of Stockton is with EVI

After the realization that oil wouldn't last for ever, why didn't they seek electric cars? It seems to me that the government wanted to hold off on electric vehicles as long as possible. Now with the National Average price per gallon of gas being $4.49, the United States has finally found a manufacturer to provide an alternative.