Wells Fargo repossesses Stockton’s new city hall plus three other city buildings

America’s slow-motion debt default is picking up steam. Stockton, California, population 300,000, is threatening bankruptcy due to overly generous union benefits and incredibly poor management by city officials. abc News10 reports in “New Stockton City Hall building seized by Wells Fargo; city preps bankruptcy contingency plan”:

The Stockton City Council announced Wednesday that they will look at bankruptcy contingency plans after Wells Fargo seized the new city hall building.The city paid $35 million to buy the eight-story building, but was not able to move in because of its money problems, and recently stopped making debt payments altogether. This is the fourth building that was repossessed by Wells Fargo; the bank seized three city parking garages for the same reason. …”This city has been in business for over 160 years and we will continue to be in business,” Mayor Ann Johnston said. “We will come through the … process or Chapter 9 with a financially sustainable future. Even though we have inherited this mess, we are committed to doing everything in our power to leave this city better, stronger and healthier.”

Note that the new city hall is the fourth city building to be repossessed by Wells Fargo. The city was in such poor financial shape that it only had the money to move its it department into its new city hall before it ran out of cash.

On top of the $35 million wasted on the new city hall and the millions lost on the other three buildings, city officials reportedly wasted $33 million settling a lawsuit for illegally using taxpayer money. It lost millions more paying fines for illegal sewage spills. It even reportedly spent $25,000 cleaning up elephant dung at the Stockton Arena.

However, the biggest financial impediment to the city is its ridiculous unfunded union agreements. For example, the city has a $417 million liability just for employee health-care costs. Then there are all the pension costs.

According to economic analyst Mike Shedlock, “If Stockton files bankruptcy it will be the largest city in the U.S. to seek Chapter 9 bankruptcy protection.”

“Don’t worry,” he says. “[T]hat record will fall soon enough. L.A. and Oakland cannot be that far behind.”

The reality is that bankruptcy is the only way forward for many cities. Debts and agreements made by bribed politicians need to be wiped clean. Unfortunately, there are so many special interest groups with their fingers in the pie that taxpayers are sure to lose out.

The Merced Sun-Star just reported that Democrats bow to labor on bankruptcy:

Despite objections from the mayors of California’s 10 largest cities, the Assembly last week approved Assembly Bill 1692 by Fremont Assemblyman Bob Wieckowski. The bill will make it harder for cities to seek bankruptcy protection.It reneges on a carefully crafted compromise measure approved just six months ago that requires financially beleaguered cities to enter into good-faith negotiations with their creditors—including, most significantly, public employee unions—before filing for bankruptcy protection.

So as Stockton moves through difficult negotiations, Assembly Democrats, pushed by their public employee union allies, have approved the Wieckowski bill.

Taxpayers in Stockton, California, will continue to pay through the nose. Many of their city employees are incompetent, and worse, their politicians are corrupt and owned by the unions.

As America’s Great Recession rolls on, expect the fighting over money to intensify. The climax is still yet ahead.