ATWATER  (AP) — Atwater in California's San Joaquin Valley is the latest city in financial troubles whose leaders are considering bankruptcy.

City officials have scheduled a council vote for October 3 to declare a fiscal emergency. Under state law, cities seeking bankruptcy protection must first declare a fiscal emergency or hold talks with creditors through a mediator.

Several California cities have declared fiscal emergencies so they can quickly get an increase in the local sales tax or other tax hikes on local November ballots. Most of these cities have not filed for bankruptcy.

But in Atwater, an agricultural city of 28,000 in Merced County, city leaders say the foreclosure crisis and mounting employee pension costs have left them with a $3 million deficit.

If Atwater goes the bankruptcy route, it would be California's fourth city to seek bankruptcy protection.