Stockton, a city of 300,000 in California's ailing Central Valley, may become the largest city in the U.S. to declare bankruptcy. Agreements with public employee unions and major bond creditors may be all that stand in the way of default.
Largest U.S. Municipal Bankruptcy Pending For Stockton (Planetizen)
Tea-Party libertarian politics finally coming to a town near you:
Stephen Acropolis, the mayor of Brick Township, New Jersey (pop. 80,000) recently issued pink slips to all 77 employees of the town's Department of Public Works in an effort to cut costs by outsourcing this work to the private sector, reports Nate Berg.Can a Town Get By Without Its Public Works Department? (Altantic Cities)
As expected, Acropolis's move has generated controversy in the community, where the mayor's plan would "place a burden on residents, who will have to find and pay for private services to collect their garbage and recycling."
City council president John Ducey, an opponent of the plan, conjures a scene of complete abandon in describing the likely effect of the mayor's plan, "'The impact will be great. He’s expecting every homeowner to contract on their own. So what if they don’t? People are going to be throwing bags of garbage in the woods and on the beach just to get rid of it. Or into their neighbor’s trash, and then there could be neighbor conflicts,' says Ducey. 'It would just turn the town into chaos.'”
According to Berg, the mayor's budget was introduced last week, and is now in the hands of the town council for review and revision.
Dec. 6 (Bloomberg) -- Municipal-bond defaults, including bankruptcies and the use of reserve funds for payments, may set a record this year as tobacco bonds and AMR Corp.’s Chapter 11 filing push the total to more than double the previous mark, said Richard Lehmann, publisher of the Distressed Debt Securities Newsletter.Municipal Defaults May Surpass Record in 2011, Lehmann Says (Bloomberg)
Adding tobacco debt sold by states such as California and Ohio as well as AMR-backed munis, the total will eclipse the $8.62 billion high set in 2009, Lehmann said today. His newsletter in Miami Lakes, Florida, tracks defaults and uses a broader measure than those applied by other municipal analysts.
Jefferson County, Ala. (WIAT) - Federal Judge Thomas Bennett cleared the way for Jefferson County to officially enter into Chapter 9 Bankruptcy.
The order Overrules objections filed by The Bank of New York Mellon which sought to stave off Chapter 9 and forcing the County to resume negotiations with creditors over the counties multi-billion dollar sewer debt.
The order ensures that the county may continue to operate while reorganizing the debt.
While the order does not specify the amount of debt that Jefferson County will still have to pay, it does find that Jefferson County did negotiate in good faith with creditors to reduce its debt obligations.
Bankruptcy Approved (CBS42)