The California hit parade keeps on rolling as yet Another California city scrambles to avoid bankruptcy.
Atwater, a city of roughly 28,000 in California's Central Valley, may declare a fiscal emergency as soon as next week, but it is trying to avoid becoming the fourth California city to file for municipal bankruptcy this year, its mayor said.
Under California law, a local government must either declare a "fiscal emergency" or go through a 60-to-90 day confidential negotiation process with its creditors before it files for municipal bankruptcy. Since late June, three Golden State cities-Stockton, San Bernardino and Mammoth Lakes-have filed for bankruptcy protection.
"We are planning to stay current on our ... bonds," said Mayor Carol Joan Faul in a telephone interview with Dow Jones Newswires. "We are hoping to avoid" bankruptcy, she said, "but as far as I'm concerned, we may have to declare a fiscal emergency" on Oct. 3.
According to its fiscal 2011 financial statement, Atwater had roughly $95 million in outstanding debt, a mixture of bonds related to its sewer as well its now-defunct redevelopment agency. Ms. Faul said Atwater intends to make an upcoming bond payment of $2 million on its sewer bonds.
Atwater is Burnt ToastOnce things reach this stage, one does not even need to look at the details because it's a done deal.
Yet, I did look further and as expected, public unions appear to be smack in the middle of things as noted in a Reuters article on
Potential Atwater Bankruptcy.
Mike Shedlock
Mike Shedlock is a registered investment advisor representative for Sitka Pacific Capital Management.