Attorneys made closing arguments in the Stockton bankruptcy case Wednesday.
Attorneys for Franklin Mutual Funds and the bond insurer -Assured Guaranty- argued in federal bankruptcy court that the City of Stockton should have cut city services to balance the budget and should have attempted to lower pension costs. Those costs are expected to almost double in the next ten years. The attorneys suggested city staff may have chosen bankruptcy instead of lowering their pensions.
The City says making 15-percent cuts to services to balance the budget would have been devastating to the community and that the staff who decided bankruptcy was the city's best option are the same staff who uncovered years of accounting irregularities and fraud. The City is seeking relief from having to pay all of its debt.
The City says it never approached Cal PERS because it was understood pension contributions were non-negotiable.