Now Atwater teetering toward bankruptcy

Sept. 27, 2012

By Chriss Street

Atwater, Calif. just admitted it does not have the cash flow to make a $2 million municipal bond payment due in November. It may become the fourth local California government to file for Chapter 9 municipal bankruptcy this year.

The 28,000-resident farming community has been strangled by environmentalists less interested in family farms than in protecting the lifestyle of a three-inch fish called the Delta Smelt.  With the city burdened with crippling unionized public employee wage and pension costs, while private sector wages and property values drop, Atwater is the latest in a soon-to-be tidal wave of local government failures.

Beginning in 2007, Federal Judge Oliver Wanger imposed limits on the amount of water pumped from the San Joachin-Sacramento River delta to farms in California’s Central Valley in order to protect a two-inch endangered fish called the Delta Smelt.  As a result, hundreds of thousand of acres of farmland lie fallow, and tens of thousands of jobs were lost. (Wanger later partly reversed himself.)

More than 200,000 farmers, migrant workers and their family members were financially devastated.  Homeless shelters and bread lines were overwhelmed as crops withered and banks foreclosed on family farms.  Local public schools continue to report rising malnutrition, as many proud families are too embarrassed to take government welfare.

The U.S. House of Representatives Congress passed San Joaquin Valley Water Reliability Act, H.R. 1837,  to try to restore the water flow. But California’s two U.S. Senators, Barbara Boxer and Dianne Feinstein, fought off the legislation in July by convincing President Obama’s senior advisors to recommend a presidential veto.

A disgusted Speaker of the House John Boehner said on the House floor that using the Endangered Species Act to protect a fish at the expense of food production and economic growth is “a perfect example of the overreach of government”.

The median home price in Atwater has plunged from $336,000 in June 2007 to just $140,000 today and unemployment has surged to 21 percent.  The 2010 Atwater median household income was $42,226. That was 19 percent below the national average of $51,914.  Almost a fourth of the population is now considered below the poverty line, compared with 13.7 percent statewide, according to U.S. Census figures.

Falling revenue

Even with all this pain and suffering, Atwater’s city tax revenue fell by only 20 percent since its peak in 2007.  Atwater did reduce its bloated union payroll from 120 to 80 since 2008, but mostly through attrition and laying off low paid younger workers.

To keep the lights on, the city depleted its cash reserves, while union wages continued to rise and the city agreed to pay all general employees’ portions of mandatory pension contribution and all but 2 percent of the mandatory contribution for highly paid police and firefighters.  The city also continued to pick up most of the cost of health-care premiums that rose by 15 percent this year and are scheduled to rise 10 percent next year.

With the threat of bankruptcy, wages now may be slashed.  According to Atwater Mayor Joan Faul, “We just started negotiating with our unions and they are going to have to take a major cut. We hope that once we declare a fiscal emergency that they will realize that we are definitely in an emergency.  If they want to save all the jobs, everyone is going to have to take a cut.”

Standard & Poor’s seems to have been shocked to learn that city is broke and hacked Atwater’s Public Financing Authority’s wastewater revenue bonds solvency rating on September 24, from a strong credit-worthy A rating to a BBB- junk-bond rating.

Under a state law passed by California’s ultra-liberal legislature and signed by Gov. Jerry Brown last year, cities seeking bankruptcy protection are forced to first declare a fiscal emergency or hold talks for 90 days with creditors through a mediator or wait for 60 days if they run out of money.  With Atwater and many other local government cities and agencies about to bounce payroll checks, California bankruptcy courts are going to need to go on a hiring binge to handle the coming long lines of municipal failures.

Chriss Street co-hosts “The American Exceptionalism Radio Talk Show”

Streaming Live Monday through Thursday from 7-10 PM

Click Here to Listen: www.edtalkradio.com

Dinesh D’Sousa will be the guest at 7 pm on Oct. 4. He is the director and star of “2016: Obama’s America.”

PLEASE CALL IN AT: 530-742-5555

21 comments

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  1. Donkey
    Donkey 27 September, 2012, 08:48

    The BK of California cities is picking up momentum!! 😉

    Reply this comment
  2. Edward Steele, Chief Investigator
    Edward Steele, Chief Investigator 27 September, 2012, 08:53

    Yes Duncey– HUGE mo !!! Hundreds have filed and soon thousands!

    Reply this comment
  3. Hondo
    Hondo 27 September, 2012, 09:22

    Guv. Brown ranted about a ‘wall of debt’ and he was right. But he was wrong about the solution, huge tax increases and no spending cuts. The ‘pension reform’ he negotiated and signed doesn’t save any real money for 20 years. It has no effect on the wall of debt that’s coming due in now and the next couple years.
    The coastal demoncrats of Kali have written off the central valley in favor of a bait fish not really from the delta area. They have promised this hard hit area welfare and food stamps instead of farms and jobs.
    Oh, that’s right, I guess they could pay someone off to get one of those jobs building the train to nowhere.
    All aboard!
    Hondo……

    Reply this comment
  4. Edward Steele, Chief Investigator
    Edward Steele, Chief Investigator 27 September, 2012, 09:28

    Hondo– WRONG– while it does not save tons now it does save some—and in 20 years– you’ll be darn glad it passed! Of course I’ll be 102 then.LOL

    Reply this comment
  5. Rex the Wonder Dog!
    Rex the Wonder Dog! 27 September, 2012, 09:39

    Hahahha..HEY TEDDY…look like the SKY JUST FELL- AGAIN!!!

    🙂

    Bring em on, the more that fall the faster the hosue of PUBLIC pension cards will fall.

    Reply this comment
  6. Edward Steele, Chief Investigator
    Edward Steele, Chief Investigator 27 September, 2012, 09:52

    YES !!! They are dropping like flies! The end is near!!!!!!!!!!!!!!!!!

    Reply this comment
  7. Rex the Wonder Dog!
    Rex the Wonder Dog! 27 September, 2012, 10:52

    Hondo– WRONG– while it does not save tons now it does save some—and in 20 years– you’ll be darn glad it passed! Of course I’ll be 102 then.LOL

    Hahahahaha…teddy’s house is burning right now but he wants a water hose in 20 years…you’re killing me little buddy 🙂

    Reply this comment
  8. Rex the Wonder Dog!
    Rex the Wonder Dog! 27 September, 2012, 10:53

    YES !!! They are dropping like flies! The end is near!!!!!!!!!!!!!!!!!

    NEAR??? Hhahaha..NO it is HERE, at least for Stockton, SB, Mammoth And Vallejo! …and more to follow.

    Reply this comment
  9. Edward Steele, Chief Investigator
    Edward Steele, Chief Investigator 27 September, 2012, 12:48

    The Skyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyyy is falling oh noooooooooooooooooooooooooooooooooooooooooooooooooooooooooooo

    0 for 13 ™ lol

    Reply this comment
  10. Rex the Wonder Dog!
    Rex the Wonder Dog! 27 September, 2012, 14:01

    The SKY FELLL!!!!!!!! Ask Stockto and San Bernardio 😉

    41-0;)

    Reply this comment
  11. Rex the Wonder Dog!
    Rex the Wonder Dog! 27 September, 2012, 16:42

    Atwater, Santa Ana, Upland, who is gonna be next in the pension tsunami tidal wave 😉

    Teddy grab your life jacket lil one 😉

    Reply this comment
  12. Ted Steele
    Ted Steele 27 September, 2012, 20:04

    OMG The skyyyyy is falling! Only 29,874 US Municipalities left to go before they are all bk!

    Oh Nooooooooooooooooooooooooooooooooooooooooooooooooooooooooooo

    Reply this comment
  13. Ted Steele
    Ted Steele 27 September, 2012, 21:24

    CalPERS will get its due from bankrupt cities
    Troubled municipalities pare budgets but continue to pay pension fund

    BY RANDY DIAMOND | JULY 23, 2012 12:01 AM

    relax little buddies———remember the cogent words of The Diamond! More munis will reorg and increase employee contributions, maybe lower or lose medicals—– it all comes out in the wash little fellas!

    Vallejo, Mamoth Lakes, soon others………zzzzzzzzzzzz

    Reply this comment
  14. Rex the Wonder Dog!
    Rex the Wonder Dog! 28 September, 2012, 16:19

    CalPERS will get its due from bankrupt cities.
    CalTURDS won’t get jack…maybe 30 cents on the dollar IF they ARE LUCKY- and that is a BIG IF, might 5 cents on the dollar…Stockton will prove that up real fast.

    Reply this comment
  15. Rex the Wonder Dog!
    Rex the Wonder Dog! 28 September, 2012, 16:20

    BTW who is Randy Diamond, another Teddy Steals sock puppet???????????

    Reply this comment
  16. Ted Steele
    Ted Steele 28 September, 2012, 18:29

    Who is Randy Diamond??? LOL God Bless ya little buddy!

    Reply this comment
  17. Ted Steele
    Ted Steele 28 September, 2012, 18:31

    Hey— Stockton….another infamous prediction!

    Soon to be 0 for 14 ™ !!!

    Reply this comment
  18. Rex the Wonder Dog!
    Rex the Wonder Dog! 28 September, 2012, 19:51

    77-0 11-6-12 🙂

    Reply this comment
  19. Ted Steele, The Decider
    Ted Steele, The Decider 28 September, 2012, 20:29

    Stockton and Vallejo little buddy !!!!!!!!!!!! LOL

    0 for 13 ™ !!!!

    this is just too easy!!!!

    Reply this comment
  20. fletch92131
    fletch92131 29 September, 2012, 08:35

    It would probably take contracting-out EVERY state non-essential governmental position to save this state, but that won;’t happen, as long as Brownie and his ilk are in control. I keep referring to the new Georgia city of Sandy Springs, as an example of how to cut non-essential costs in government. Look for the YouTube video produced by the Libertarian group, Reason Foundation, for a great decription of how this way achieved. Also, the NY Times, of all papers, did a story on this city and its unusual method of providing services to its citizens.

    Reply this comment
  21. curtis porter
    curtis porter 10 October, 2012, 12:58

    That’s why I. Left 47 years ago!

    Reply this comment

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