Another California city on verge of bankruptcy?
Filed under: Budgets, Debt, Real Estate, Recession, Bankruptcy
Bankruptcy is hitting many people, even cities.
In May, Vallejo, CA became the second city in California history to file for bankruptcy. Now, the small towns of Rio Vista and Isleton, on the other side of Solano County, are teetering on the brink of bankruptcy, according to a recent San Francisco Chronicle story.
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The death of an 855-home development is the main reason for the downfall, along with falling property and sales taxes, fewer building fees and less money from the state. The developer started construction of its development, called Hearth and Home at Liberty, and sidewalks and streets are already built. Shea Homes plans to restart building when the economy turns around.
City Manager Hector De La Rosa told the Chronicle he's confident the city can survive through the end of the fiscal year in June without filing for bankruptcy.
"We're hopeful, but we are not out of the woods," De La Rosa said. "If we make any more cuts things will really start falling through the cracks."
If the housing boom starts again in California, developers are ready to start building in Rio Vista. The city has given the preliminary OK for two more housing developments -- a 750-home development and a 2,200-unit neighborhood.
While Rio Vista expects it won't have to file for bankruptcy, the nearby town of Isleton is $1 million in the hole.
I used to work as a reporter and editor covering Solano County, and it was often easy to send a reporter there to do some fun, quirky story on the small towns and the odd and interesting things going on there. Isleton has a crawdad festival that draws huge crowds each year, and Rio Vista has a bar that is worth the drive to see various mounted animal heads.
But to bring in some income, these cities may want to get away from relying on the housing market to bounce back and instead look to an income stream that's more dependable. It's an issue I covered in Rio Vista years ago and that got the community up in arms: Prisons. Building a state prison in one of these Delta towns would, unfortunately for some, bring continued business.
Aaron Crowe is an unemployed journalist in the San Francisco Bay Area. Read about his job search at www.aaroncrowe.net
Reader Comments (Page 1 of 2)
1-26-2009 @ 1:42PM
Jun Ikeda said...
talk about arrested development
Reply
1-27-2009 @ 7:03AM
bob said...
Considering ca. demo legislature has given away money to the tune of 47 billion in debt. Caleefornia, who ya gonna call? Stone blind liberalism, like digging your own grave. Well, it's damn near reached the proper depth.
Reply
1-27-2009 @ 7:28AM
Kai Ferano said...
If the millions of illegal Latin American immigrants in California started paying taxes for the social services they receive, this beautiful state would not be "in the red." America, wake up! The plague is spreading.
Reply
1-27-2009 @ 9:31AM
Amy said...
I sooo agree with what u said. it's getting bad all over. more states should adopt the laws Oklahoma has about illegal's. the way the article read was it is up to each state to make it the law. ya wana live here and get help. then pay taxes and go on the books. I am a single mother of 3 and needed help after my divorce. well I couldn't get help. but I see all these illegal's driving around in Cadillacs and brand new trucks and vans. it is sicking. I have worked all my life and paid into the government. now I can't get help. if the new president wants to do some thing to improve our US. then stop giving away all our money to people who r not here by our choice, but by there choice cause they wanted to run threw the Rio
1-27-2009 @ 7:36AM
pete said...
Quick! Let's get the fence built before any of those california prune pickers get out. Keep the libs in California and when they are all corraled there, give it back to mexico.
Reply
1-27-2009 @ 7:48AM
kravenitnow said...
This economy sux! I am trying everything I can to save some money.. a great way is to cook home more... My gf bought me this cookbook called "Get in the Kitchen, BIT@HES!" (bitchcooks.com)- now whenever she comes over she says "What's for dinner BIT@H?" or " Get in the Kitchen, and make me some food, BIT@H!" .. Yeah.. real fun... so tonight, I am gonna put on the apron on the front page of the website, make her the dish called "Bend Me Over Beef" and shove it up her butt... how you like them apples, sweetie pie?
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1-27-2009 @ 7:51AM
Carol McKellar said...
Why bail out cities? That makes no sense. Just let them become ghost towns, as they did in the past.
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1-27-2009 @ 7:52AM
cowboybillmn said...
Check out their CAFR...Comprehensive Annual Finacial Report to see how broke they really are. My City of Woodbury, MN, population of 60,000 has $500 Million in net assets per their 2007 CAFR. Just Google and type in CAFR and the City, School District, County, State, etc.
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1-27-2009 @ 8:01AM
David said...
NY is the same way. We have one of the highest property taxes, high school tax, high gasoline tax, high sales tax, state income tax, high sin taxes, etc. You need a license or a permit to "fart" and that generates more money. Yet NY State is broke. I just don't get it. What's going to happen when people just can't afford all these taxes ? Its already happening.
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1-27-2009 @ 8:14AM
Snw said...
Close california.
No more bail outs.
Grandpa used to say......you made your bed now you get to sleep in it.
Reply
1-27-2009 @ 8:16AM
CMR said...
Go ahead libs, pass some more ignorant rules that cost you more money so you can slow your spending some more, so your government can raise more taxes to try to recover the money they are losing because you aren't spending enough. That way you can cut back more of your spending. Then your government can ask the feds for a bailout because they've regulated themselves and you into bankruptcy.....oh wait, that's what's happening now....hahahahaha. Libs....they're like watching a train wreck over and over and over. What's the psycological term for people who do the same thing over and over expecting a different result?!?! I'm thinking we need to extend the border fence all the way up the border of California and just let them simmer in their own self-destruction. I'm sick of bailing everyone out.....
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1-27-2009 @ 8:34AM
Mausinn said...
Uhhhhhh, did you forget that CA. has a Republican for Govenator? Don't try to blame it all on the "Libs", but then that is what all right wing whackos do rather than accept any of the blame themselves. Just like youf tin god Chaney saying it wasn't me that made decisions I was only the VP. You guys are always good for a laugh.
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1-27-2009 @ 8:35AM
MIKE said...
I MOVED MY FAMILY AND BUSINESS OUT OF CALIFORNIA TWO YEARS AGO. THESE LEFT WING NUT JOBS ARE 40 BILLION IN DEBT AND YET THE STATE BUDGET GREW 40% IN THE LAST 4 YEARS. LIBERALS HAVE DESTROYED THIS ONCE GREAT STATE
Reply
1-27-2009 @ 4:07PM
Michael J. Nichols said...
My ex tried paying off our debt by getting more credit cards, and it worked........we're DIVORCED!
Reply
1-27-2009 @ 8:56AM
Justin said...
This is just the first symptom of the disease of liberalism gone mad. Wait till the cancer sets in and the whole STATE goes under. They're are already talking of sending out IOU's in lieu of rebates.
Reply
1-27-2009 @ 8:59AM
steven said...
smoke a joint and chill, people ! you can live fine without money ! where animials ,we dont need money to live! its just a game! oh yea
Reply
1-27-2009 @ 9:06AM
Pat Corbat said...
Give California back to Mexico.
Reply
1-27-2009 @ 9:12AM
AFranco said...
Mausinn...
You are the one that's good for a laugh! Wilson didn't put CA into deficit, then LIE about it to get re-elected....Gray Davis DID. And Cruz Bustamonte? What a PUNK. I met him enough times to know! Swartzenegar is married to a KENNEDY...hello?! He's a r-i-n-o...republican in name only! California has been run into the ground by liberals for easily the last 60 years. Everything from welfare, CPS..(rated worst in the nation), to their biased and poorly run judicial system and "destroy the families" court system! California is now a prison contract state, more federal subsidies made off the the heads of it's citizens that it herds like CATTLE! Our entire family are born in CA. We left there 7 years ago, and we will NEVER be back, and we don't pour our tax money into a bottomless pit "economy", only to support greedy, non effective CA politicians! Too bad we're stuck with them in DC, now! The up side?...now the entire country gets a taste of CA "reality"!
Reply
1-27-2009 @ 9:23AM
Jim said...
It's been said over and over, high taxes will ruin a good economy. California has been increasing taxes under the demos for quiet a while. Now they are going to suffer. Now in Arkansas, the demos are talking about increasing the tax on cigarettes. That will drive the smokers to Missouri, Oklahoma, and and Mississippi to buy their smokes. So those states will get the benefits of our money. Tax income will drop even further in this state now. When will the demos get a clue.
Reply
1-27-2009 @ 10:28AM
chitown lady said...
NOT ON REAL ESTATE.....they haven't............thats the problem.........do your homework on the issue......They are over taxed in all other places ....Time to pay up on real estate