Special Report: Can Fresno avoid Stockton's Fate?

Special Report: Can Fresno avoid Stockton's Fate?

Can Fresno stop a fiscal tailspin and prevent following Stockton into bankruptcy?
It’s a tale of two cities, 200 miles apart, with serious money problems. But while Fresno’s getting by paycheck-to-paycheck, Stockton’s already hit financial rock bottom. Over the summer, Mayor Ann Johnston filed for Chapter 9 bankruptcy protection, making Stockton the largest city in the country to do so.

Several factors led to Stockton’s financial woes. The housing bust dried up property taxes; the city funded expensive projects, including a new baseball stadium and hockey arena; generous medical and retirement benefits provided since the 1990s started to depleted the reserves; and, more recently, city hall began making risky bond and credit moves that failed.
We asked Fresno Mayor Ashley Swearengin whether the Central Valley’s largest city is in danger of going bankrupt, too. She says, that’s not likely, because Fresno and Stockton are very different.

Stockton has a population of 296,000, with a total city budget of $521 million. Fresno has more than half a million people, with a total city budget of at little less than $1 billion. But Stockton’s deficit – at $26 million – is more than half as large as Fresno’s at $12 million.

But both mayors have run into the same obstacle – stalled negotiations with its police unions. Officers say they’re fed up with taking pay cut after pay cut, while watching their benefits decrease and their numbers drop, as well. Jacky Parks is president of the Fresno Police Officers Association. He says, "We deserve, with our tax dollars here in Fresno... we deserve to have the most ethical, the most professional police officers, most highly trained police officers. We shouldn't just be settling. When you settle, you end up having what's happening in Stockton."

Members of the FPOA have consulted with their Stockton counterparts about how to handle upcoming negotiations. SPOA president Kathryn Nance says, “Everybody might have to give a little to keep the city afloat and we understand that and I hope that Fresno understands that also, that everybody might have to give a little bit. But the question becomes, is it fair and equal across the board? Is everybody making the same concessions, from the city manager down to the janitors, everybody should be doing the exact same thing."

Fresno’s contract with the police union doesn’t expire until 2015, but Mayor Swearengin says, she’d like to see it agree to voluntary concessions, to make sure big budge problems are avoided. She says, “As we move forward over the next three years, there are significant negotiations that we'll have to have and that we'll have to see savings from those contracts. There's no other way forward for Fresno but to see those savings."

Parks adds that avoiding bankruptcy is a goal everyone has; “We're here. We're committed to this community and what's going on right now is gonna affect us and our families for a long time. So it's important to us, absolutely."
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