Oakland (Calif.) mulls bankruptcy

[marmar]

from the San Francisco Chronicle:



Budget woes have Oakland mulling bankruptcy
Chip Johnson

Tuesday, June 9, 2009

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Even though city officials would prefer to avoid a public conversation, behind closed doors the Oakland City Council has discussed filing for bankruptcy protection in the midst of a $100 million budget deficit.

"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."

Council President Jane Brunner was equally aloof. She ably acknowledged the city's dire financial problem while managing to avoid the b-word altogether.

"We're going to try to avoid it, but am I going to say it would never happen? I can't say that," Brunner said.

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. ........(more)

The complete piece is at: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/06/09/BARI183DJB.DTL

[phantom power]

1. CA is really on the verge of disaster, aren't they.

[aquart]

3. Lotta Republican thinking, real long time.

Oh, and don't forget: ENRON.

[aquart]

2. Debt service.

Don't suppose we could just deduct that from the bailout and consider it paid?

[Winterblues]

4. What this calls for is Tax Cuts....

D'Oh.... for a moment I thought I was a Republican....

[lunatica]

5. I live in Oakland

Oakland needs it's police and firefighters. Not too long ago 4 policemen were shot and killed by a man who had violated parole and who had an illegal semi-automatic in his car. Two police were stopping him for a minor thing but that morning the felon had raped two women and he thought they were after him for that. Later in a shoot out he killed one more and wounded another one who died later. When was the last time anyone heard of multiple cop killings like that?

Oakland is also where there was such a terrible fire in 1991. The fire ultimately killed 25 people and injured 150 others. The 1,520 acres destroyed included 3,354 single-family dwellings and 437 apartment and condominium units. The economic loss has been estimated at $1.5 billion.

[tularetom]

6. Public works projects are rarely paid for out of the general fund

Unless they are for new city buildings, parks or other general purpose projects. Water and sewer utility costs are paid for by the monthly bills charged for the service and any city is free to raise their rates to cover the cost of the project, O &M, or debt service. As far as road costs they are almost totally covered by the state gas tax subventions which may or may not b adequate, but are not a drain on the general fund.

I have never heard of a city that funded major public works capital projects or O & M out of its general fund. It just isn't done.

Want to cut the cost of municipal services? The only way to do it is to reduce the cost of public safety. Cut the police and fire budgets, that's where the money goes and contrary to the lobbying efforts staged by most police chiefs, there is a lot of room for cuts in their budgets. Elected officials are intimidated when these guys parade into the council chambers in their impressive uniforms with all that brass and spit shined shoes and they're afraid to tell them no.