The city of Stockton, California is in dire fiscal straits, as recently evidenced by Wells Fargo’s impending repossession of a property purchased by the city in 2007. The property is partly housed by Stockton’s IT department. A San Joaquin County Superior Court judge ruled that Wells Fargo can move forward with repossession the property after the town stopped making bond payments in an attempt to avoid bankruptcy.
The Wells Fargo bank has already repossessed three parking garages previously owned by the town. The building now facing repossession is one which Stockton previously hoped would become its new City Hall.
Town officials are hopeful that the IT department can remain in the repossessed building. Mayor Ann Johnston said about the repo, “We remain hopeful that we can reach an agreement with a sufficient number of our creditors to get our fiscal house in order. However, we must have a plan for any possible outcome to protect the health, safety and welfare of our community and maintain basic services.”
According to the Government Technology article, a mix of a high foreclosure rate, generous employee retirement benefits and risky borrowing contributed to Stockton’s financial ruin.
What can be done to keep local governments spending within their means?