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Stockton files evidence with federal court regarding finances
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STOCKTON - The City of Stockton filed evidence with the United States Bankruptcy Court Friday related to the State-mandated AB 506 confidential mediation process.

The evidence includes a 790-page restructuring proposal, sometimes called the “ASK.” Included in this lengthy document was the data that demonstrates the City is insolvent and requires modifications to obligations, including City-paid retiree and retiree dependent medical premiums, as well as long-term debt, such as bonds backed by the City’s General Fund.

The City and its largest creditors concluded 90 days of confidential mediation on June 25. The mediation resulted in the tentative agreements with the majority of the City’s labor unions that will be presented to the City Council for approval on July 24. No agreements were reached with the City’s largest creditors, forcing the City to file for

bankruptcy on June 28. In an emergency motion that was heard on July 6, the City had requested that virtually all information relating to the AB 506 process be disclosed to the public. Chief Bankruptcy Judge Christopher M. Klein, who is overseeing the City’s bankruptcy case, granted permission for only limited disclosure.

In addition to the restructuring proposal, which was the key document in the mediation, a list of mediation sessions and other relevant information such as who participated, the issues discussed, the duration of the meetings, and the results of the mediation was filed with the Court Friday. All of these documents are also posted to the City’s web site at The webpage also has a transmittal letter from Stockton’s City Manager explaining the high points of these documents.

Other declarations and documents illustrate the extensive lengths the City went to demonstrate its fiscal situation to creditors, and the enormous amount of financial documentation, both confidential and public, provided to creditors during the AB 506 process. Other documents filed in the Bankruptcy Court and posted on the City’s website reveal the City’s dire fiscal circumstances, the vigorous efforts over the last three years to cut $90 million from the City’s General Fund, and the difficult choices and painful reductions that have resulted in the limited resources that the City now has to preserve basic and essential services for public health and safety. Unable to close a $26 million gap in the current fiscal year, the City was forced to file for bankruptcy.

“The record will demonstrate that this City Council did everything in its power to avoid bankruptcy,” said City Manager Bob Deis. “It is well documented that we have made a good faith effort to negotiate with the participants in confidential mediation. Just as we were committed to the AB 506 process, we are committed to the necessary restructuring and have made a good start towards the rebuilding that must occur.”

For information and documentation related to the City of Stockton bankruptcy, visit