LOS ANGELES. - The California city of Stockholm declared bankruptcy and is likely to file for chapter 9 bankruptcy protection on Wednesday.
In a 6-1 vote, the city manager Bob Deis made the announcement today. Councilman Dale Fritchen was the only one who dissented, telling the USA Daily, "I am not convinced there isn't anything else we can do...We keep our promises until we can't. We haven't done everything."
But others tend to think that they did everything in their ability to save the city. According to reports, the city suffered a $26 million deficit this year, but has had a $90 million budget shortfall over the past three years. As a result the city had to cut down on many facilities including cutting down on one-fourth of the police force, one-third of the fire department and 40 percent of all other workers. The city reported that one in every 195 homes filed for foreclosure. The city even had to slash wages and medical benefits.
Mayor Ann Johnson said that this was "the most difficult and heart-wrenching decision we had ever faced," as reported by the Daily News.
The city council decided to file for bankruptcy in February starting the process with a 60-day mediation course with city creditors. Fritchen was the lone dissenter in the passing of that resolution as well.
Stockholm which inhabits a population of more than 290,000 will be the largest city in America to declare bankruptcy.
Deis announced that filing for bankruptcy was the only way to save the city from a suit from creditors. Many residents oppose the decision and are working towards forming a referendum that could possibly overturn the decision.
