It is largely expected that the City of Atwater will join the ranks of fiscally desperate cities at its scheduled City Council meeting tonight. Facing a looming bond payment and virtually depleted funds, the declaration of fiscal emergency could pave the way for Atwater to become the fourth California city to declare bankruptcy in 2012.
Even before a vote is taken, the City is looking at further and deeper cuts to its workforce. Of the roughly 80 employees left, as many as a quarter will receive lay off notices – including police officers, managers, and civilian employees. Those who retain their jobs are going to be asked to take a 15 percent pay cut. That’s in addition to 10 percent that was lost already to furloughs.
But the outlook is tough for a city where the general fund is millions in the red, reserves have already been depleted, and the city has to make a $2 million bond payment in about a month.
According to the City’s mayor, Joan Faul, the city intends to make that payment. But she also told the national news that people should keep her city in their prayers.
Regardless of actions taken in a month to address bond service, the city is taking steps now to avoid potential insolvency.
State law requires that a city either enter into the AB 506 mediation process – which can take up to 90 days – or declare a fiscal emergency before declaring bankruptcy.