If bankruptcy declared, Stockton promises to pay some bills | News
STOCKTON, CA - If the City of Stockton declares bankruptcy as early as Tuesday, it means the city would stop paying a lot of what it owes to businesses, banks and employee groups.
But, the city has promised it's vendors in a letter the payments will continue.
The title of the letter include "vendors and service providers will be paid." In the body, City Manager Bob Deis wrote, "We rely on your company and will continue to pay you, as we have since our fiscal crisis began."
Among the vendors are companies like Charlie's Day and Nite Lock and Key Service and Cudney Auto Parts. The owners of those companies don't sound concerned their bills to the city will be unpaid.
"As of right now, we have no problem," Marvin Cudney said. "If I didn't think they'd (bills) be paid, we wouldn't let them charge stuff."
"The city is a 'good customer, old customer,'" Charlie Day said. "We had them since we started 50 years ago. Eventually, it (the bills) gets paid somehow. May take six months or a year to pay."
Monday is the last day of mediation between the city and it's creditors. Tuesday it should finally be known if the mediation was successful and bankruptcy is avoided, or if the city takes the next step and declares bankruptcy.
Stockton residents are split on the issue of bankruptcy, with some arguing it would be a black eye for the city with financial consequences for years to come, including making it harder to issue bonds for public projects.
"If everybody files bankruptcy where will the country go? So try to find a situation for how you can handle (it)," Stockton resident Lakhbar Singh said.
Others argue it's time for Stockton to make a fresh start and they point to the City of Vallejo, just emerging successfully from bankruptcy, as an example.
"From what I gather, it's making a comeback. So is it a bad thing? Not necessarily. I suppose it's just one of those things we'll have to wait and see," Stockton resident Bal Singh said.
In his letter to vendors, Deis said payment to those companies comes from the city's restricted funds category and that money can't be used to help Stockton overcome it's fiscal crisis.
Stockton spokespersonConnie Cochran agreed.
"(It) lets people know exactly how we'll be operating and it calls for continuing to pay our employees, vendors and our service providers," Cochran said.