| SAN FRANCISCO, June 25
SAN FRANCISCO, June 25 The small California city
of Atwater has stepped away from the brink of bankruptcy with
the approval of a budget that benefits from new revenue and does
not rely on layoffs for the first time in five years.
Since it declared a fiscal emergency last October, the city
of 28,000 was seen at risk of following Stockton, another city
in California's Central Valley, into bankruptcy court. To keep
its budget balanced, Atwater had cut 40 percent of its workforce
over the past five years.
Atwater's new $12 million general fund budget approved late
on Monday relies on revenue from a sales-tax hike and increased
water, waste and garbage service rates, and will fund about 80
Revenue is expected to remain tight. The Central Valley was
hit particularly hard by California's housing market crash and
is lagging the state's coastal regions in job growth.
"We'll have to monitor the budget very, very closely, but we
feel we can do it," Mayor Joan Faul told Reuters by telephone on
Atwater's improved finances give city employees, who feel
they have made enough concessions in recent years, leverage at
the bargaining table, said Nancy Vinson, a business agent for
the American Federation of State, County and Municipal
The union represents about 40 Atwater employees and will ask
the city for a 3.5 percent cost-of-living-adjustment and an end
to furloughs, Vinson said.
"We've informed them we no longer believe they have a fiscal
emergency," Vinson said. "Our position is that the concessions
will go away."
Last year three California cities filed for protection from
creditors. The mountain resort town of Mammoth Lakes has
withdrawn its filing, but Stockton and San Bernardino, two
sizeable cities, are pressing on with their bankruptcy cases.
The judge in Stockton's case recently found the city
eligible for bankruptcy protection, allowing it to draft a plan
to adjust its debts. Stockton aims to file that plan in
September. San Bernardino is seeking similar court approval.