Oakland reportedly mulls bankruptcy filing

Thomas Lifson
Chip Johnson of the San Francisco Chronicle reports that Oakland, California is considering a bankruptcy filing, which would make it the Golden's State's largest city (so far) to declare itself unable to pay its bills.

"We have asked the (bankruptcy) question because we wanted to know the impact," said District 5 council member Ignacio De La Fuente. "In closed session, the question has been asked, and an answer was given." He would not elaborate.

"It's a possibility," he acknowledged. "Things are that bad." [...]

Consider the city's cash position: Out of next year's general fund of approximately $415 million, police costs are estimated at $212 million, fire protection service $103 million and $41 million in debt service payments. That leaves about $60 million to pay for everything else, from library services to recreation centers to public works.

And that calculation doesn't include $50 million more in deferred debt service in a budget proposal presented to the council last month by Mayor Ron Dellums.

Johnson reports that if federal funds are not secured by Oakland, up to 200 police officers will be laid off, among other measures. In a city hosting such a large population of violent criminals, that could be a catastrophe. A very fine journalist, Johnson notes that municipal employees in California have had quite a run the past few decades, with wages and especially benefits that are the envy of private sector workers.
Chip Johnson of the San Francisco Chronicle reports that Oakland, California is considering a bankruptcy filing, which would make it the Golden's State's largest city (so far) to declare itself unable to pay its bills.

"We have asked the (bankruptcy) question because we wanted to know the impact," said District 5 council member Ignacio De La Fuente. "In closed session, the question has been asked, and an answer was given." He would not elaborate.

"It's a possibility," he acknowledged. "Things are that bad." [...]

Consider the city's cash position: Out of next year's general fund of approximately $415 million, police costs are estimated at $212 million, fire protection service $103 million and $41 million in debt service payments. That leaves about $60 million to pay for everything else, from library services to recreation centers to public works.

And that calculation doesn't include $50 million more in deferred debt service in a budget proposal presented to the council last month by Mayor Ron Dellums.

Johnson reports that if federal funds are not secured by Oakland, up to 200 police officers will be laid off, among other measures. In a city hosting such a large population of violent criminals, that could be a catastrophe. A very fine journalist, Johnson notes that municipal employees in California have had quite a run the past few decades, with wages and especially benefits that are the envy of private sector workers.