Wednesday, February 25, 2015 | Sacramento, CA
The City of Stockton officially exits bankruptcy Wednesday. The exit ends more than two years of negotiations, settlements, and development of a future fiscal plan.
Being $2 billion in debt forced the City of Stockton into bankruptcy. Now as it exits bankruptcy, the city can move forward in its “Plan of Adjustment” with 20 classes of creditors.
In some cases, the debt principle has been reduced, in others the payment terms changed.
Medical insurance for city retirees has been eliminated altogether.
Stockton City Manager Kurt Wilson says exiting bankruptcy doesn’t wipe the slate clean, but it does give the city a way to pay its debts.
“While we are very stable and can afford where we are today, it doesn’t mean that we’re going to immediately bounce back to the staffing levels or the service levels that we had before the great recession.”
Wilson says the city’s Plan of Adjustment will affect its financial decisions through the year 2053.
At one time Stockton was the largest city to declare bankruptcy.
It was soon replaced in that position by Detroit.