The law that forces broke California cities into 60-90 day negotiation with creditors, AB 506, has an “emergency offramp” that allows cities to exit the process if their collapse is imminent. Stockton arguably could have sought that exit.
Instead, leaders here chose to soldier through the process. Probably they anticipated it would prepare at least a partial framework agreement for bankruptcy court, expediting the bankruptcy and saving millions; and it would avert or diminish the scourge of Vallejo’s bankruptcy, unions disputing the city’s figures, and dragging the process out at great cost.
It also gave the city a dress rehearsal for making the fundamental argument that the city must seek bankruptcy protection.
That was smart — and somebody finally said so.