The City of Stockton is set to exit bankruptcy Wednesday.
The city announced the exit date in a press release Tuesday,
"There is cause for celebration," City Manager Kurt Wilson said in a press release. "We have worked long and hard to get to this day. We owe a huge debt of gratitude to all of our City employees for their hard work, dedication, and the sacrifices they have made over the last several years. The stigma of bankruptcy is lifted and we can move our city forward toward recovery."
A federal judge in Sacramento ruled in January that the city could exit bankruptcy. The city's plan to exit bankruptcy "includes the various agreements reached with employees, retirees, capital market creditors, and numerous other classes of creditors, implementing structural changes to the City's operations and finances that would not have been possible outside of bankruptcy."
The press release also states:
Stockton has been able to address over $2 billion in long-term debt and obligations that had overburdened the General Fund and caused both fiscal and service insolvency for the City. With implementation of the plan agreements, the City is fiscally solvent and sustainable.
Wilson, who came to work for the City after it had already declared bankruptcy, has worked with two Councils to lead the City through the final stages of the process. "We emerge from bankruptcy a renewed city, perhaps better prepared for our future than any other city in the State, with a new value system, a thorough understanding of our operations and finances, and the tools to maintain solvency and adjust to economic conditions for decades into the future."
The City has developed a Long-Range Financial Plan (LRFP) to inform and guide financial decisions for the duration of the agreements that comprise the Plan of Adjustment, some of which extend out to 2053. The plan requires fiscal discipline because it is lean and does not allow for increases in employees or services, with the exception of police and the Marshall Plan on Crime.
The city filed bankruptcy in June 2012 after three years of multimillion-dollar deficits.
