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| Stockton's AB 506 Process Clarified | Department: City Manager |
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| On February 28, 2012, the Stockton City Council approved moving forward with a confidential neutral evaluation process recently adopted through state legislation, AB 506. The process gives municipalities that are in fiscal distress an opportunity for financial restructuring, not unlike what goes on in the private sector. The City has not declared bankruptcy. Related Document(s): |
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| Stockton's AB 506 Confidential Mediation Participants | Department: City Manager |
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| On February 28, 2012, the Stockton City Council approved moving forward with a confidential neutral evaluation process recently adopted through state legislation, AB 506. The process gives municipalities that are in fiscal distress an opportunity for financial restructuring, not unlike what goes on in the private sector. The City has not declared bankruptcy. The City?s total annual budget is $600 million including all funds and operations the financial restructuring involves only a small portion of the City?s total budget ? the General Fund ? which represents approximately $165 million of the larger budget. The AB 506 process allows municipalities to enter into a period of confidential mediation with creditors or ?interested parties? with $5 million or more in obligations or debt. The City and interested parties will select a mediator with the goal of reaching an agreement on how to manage these City debt obligations.
AB 506 process requires that the mediation process remain confidential however, the participants in Stockton?s AB 506 process have all agreed to identify the names of the organizations that will be participating, which is allowable under the legislation. For a list of the participants and additional information, please view the full news release. Related Document(s): |
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