◼ By outward appearances, Stockton, a city of nearly 300,000 on the Sacramento-San Joaquin River Delta, seemed in the mid-2000s to be emerging from decades of struggle. - AP via FOX
Next to its gleaming downtown waterfront -- a window to the West's largest fresh-water estuary -- a beautiful new $46 million glass hockey arena rose in 2005. That same year, an Oakland A's minor league baseball team began play in a new taxpayer-financed stadium, amenities sought by elected officials catering to a wave of new residents fleeing Bay Area congestion and soaring home prices.
High salaries and lucrative benefits were supposed to attract and retain the brightest city workforce to improve the quality of life for its residents. "We spent like the good times would go on forever," said Stockton spokeswoman Connie Cochrane.
But then the recession hit, and the good times went bust....
After the city's population grew by nearly 20 percent between 2000 and 2005 and real estate tripled in value, home prices plummeted 40 percent the following year before bottoming out at 70 percent.
Within two years, Stockton had accumulated nearly $1 billion in debt on civic improvements, money owed to pay pension contributions and the most generous health care benefits in the state -- coverage for life for all retirees plus a dependent no matter how long they had worked for the city.
"It's not realistic to think that something like that could be sustained indefinitely," Cochrane said....
By 2009, the city began slashing its budget to stay afloat. The police department lost 25 percent of its 441 sworn officers and the fire department was cut by 30 percent. City staff was cut by 40 percent. The city general fund budget, now $155 million, has been cut by $90 million over three years.
The impacts were felt everywhere. Wells Fargo bank seized three parking garages when the city defaulted on the $32 million in bonds that financed them. Bond holders also seized the $40 million downtown high rise that was to become City Hall.
Stockton recorded its highest-ever number of murders in 2011 and 2012, and had three just last Sunday. Last year, an FBI analysis of violent crime made it the 10th most dangerous city in the U.S. Its unemployment rate is 17.5 percent, and it has the third-highest illiteracy rate in the country.
"We are fiscally insolvent, but service insolvent as well and that threatens our ability to attract new business, which we need to recover," Cochrane said.
