Stockton aims to avoid being biggest bankrupt city

Stockton aims to avoid being biggest bankrupt city

STOCKTON, Calif. (AP) — The Stockton City Council plans to vote this evening on sweeping measures to avoid becoming the nation’s largest city to fall into Chapter 9 bankruptcy protection.

At issue is whether to use a new California law to enter mediation with its creditors.

The river port city of about 290,000 in the Central Valley was hit hard by the recession and foreclosures, forcing it to make deep emergency cuts, including to its police department. City leaders say Stockton is on the brink of insolvency and could soon be unable to pay its debts.

The Stockton Record reports that council members also plan to vote on whether to shift millions of dollars away from special programs, suspend vacation and sick-leave employee cash-outs, and miss payments on outstanding debts.