Stockton, the California city on the brink of bankruptcy, and creditors agreed to extend talks aimed at restructuring its municipal debt for an extra 30 days.
The bargaining was set to end after 60 days under a California state law. The extension will give negotiators until June 25 to reach agreement, the city said today in a statement.
“This is a good sign,” Stockton Mayor Ann Johnston said in the statement. “It means that our creditors understand our fiscal circumstances and it indicates that they believe that it is worth the investment of time and resources to work toward a solution.”
The community of about 292,000 residents 80 miles (130 kilometers) east of San Francisco is trying to avoid becoming the largest U.S. city to enter bankruptcy after mounting retiree health-care costs, the recession and accounting errors left it almost insolvent. The City Council in February agreed to pursue the negotiations with creditors, which include the California Public Employees’ Retirement System, the largest U.S. pension, and San Francisco-based Wells Fargo & Co. (WFC), the nation’s largest home lender.
To contact the reporter on this story: Alison Vekshin in San Francisco at email@example.com.