And even towns/cities who aren't in the news are on the brink:
OC Register LinkThe Register examined the latest audited statements for all 34 cities in Orange County to assess their overall fiscal health.
While most cities appeared in quite positive territory when their hard assets were in the mix – land, buildings, etc. – the cash cushions in their general funds ran the gamut.
Two were in razor-thin territory, with reserves below 1 percent of annual expenses: Cypress and Placentia.
One was below the 5 percent threshold considered a barebones cushion: Santa Ana.
And Garden Grove and Costa Mesa were below 7 percent.
About half of local cities had more than 50 percent reserves, including Laguna Niguel, Rancho Santa Margarita, Villa Park, Westminster, Seal Beach, Buena Park, Mission Viejo, Aliso Viejo, La Palma, Fountain Valley, Laguna Woods, Lake Forest, Westminster and Yorba Linda.
STORM CLOUDS OVER STANTON
The Register found the financial clouds were darkest over Stanton.
Steep budget cuts over the last four years have left Stanton, population 38,000, a shell of a city.
Visitors to Hollenbeck Park will find it fenced off, because the city can no longer afford to water the grass. Children who once played in the sprinkler-like water attraction at Dotson Park will now find it dry. Over at Zuniga Park, volunteers are taking care of maintenance and paying for water.
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From 1986 through 2011, just 263 cities, counties and districts filed for protection from creditors under Chapter 9 of the bankruptcy code, the official U.S. Courts website reported Friday.
The vast majority have been small utility or hospital districts. Just a few – most notably Orange County in 1994 and Jefferson County, Alabama in 2011 – have involved billions of dollars.
Only four California cities have filed bankruptcy in the past 20 years. But two of them, Stockton and Mammoth Lakes, have done so in the last three weeks. And a fifth city, San Bernardino, is expected to file later this month or in August.
Despite the obvious advantages – bill collectors are silenced, labor unions are at least briefly stunned – municipal bankruptcy costs time and money. It also damages an agency’s reputation among potential lenders for years.
Vallejo, which filed for protection in May 2008, finally emerged in November 2011. Councilwoman Stephanie Gomes said on her blog that legal bills reached $11 million.
Vallejo got off cheaply.
During its epic bankruptcy, Orange County paid nearly $87 million in legal and financial advisory fees, according to a 1996 tally by the Register. That came to $156,058 for each of the 555 days the county spent in bankruptcy court. And it didn’t count money the county paid after emerging from bankruptcy for lawsuits against its onetime financial advisers.
Orange County is still paying off its 1994 bankruptcy. It floated a bond in 1996 to repay creditors. This year it is paying $43 million on that bond. The final payment will come due in 2018, county spokesman Howard Sutter said.
