Wednesday, June 10, 2009

Oakland: Never Mind on that Bankruptcy Thing

By Robert Gammon
Wed, Jun 10, 2009 at 6:40 AM

Top Oakland officials say they've never seriously considered declaring bankruptcy and have no plans to do so, thereby pouring cold water on yesterday's Chron story that said otherwise. According to the Trib, City Council President Jane Brunner said the council quickly discussed bankruptcy as a way to cope with the city's massive budget deficit, but then discounted the idea as premature. "We're not going bankrupt," she told the Trib. "We have not had any serious conversations about going bankrupt. There are many things we would do before we would get to that point." Mayor Ron Dellums added: "We recognize that there are significant structural challenges within the city's budget. Although the city council may be exploring a full range of alternatives, bankruptcy is not a strategy that has been seriously considered, nor is it being pursued at this point." In other words, move along, there's nothing to see here.

We're glad that the council and the mayor are not seriously considering bankruptcy, and it looks as if yesterday's Chron story was off the mark. Although bankruptcy could allow the city to free itself from burdensome employee contracts it can no longer afford, Oakland's financial problems are not yet so dire as to justify the move. However, that could change if the city fails to obtain a $67 million federal grant for policing, as we mentioned yesterday.

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