Oakland Mayor Ron Dellums this week said the city is not seriously considering bankruptcy after press reports that it is considering a Chapter 9 bankruptcy filing.
“There are significant structural challenges within the city’s budget,” Dellums said in a release. “Although the City Council may be exploring a full range of alternatives, bankruptcy is not a strategy that has been seriously considered, nor is it being pursued at this point.”
Dellums and the Oakland City Council are debating ways to close an $83 million gap in the $415 million general fund budget for fiscal 2009-2010. The San Francisco Chronicle earlier this week reported that the council had discussed bankruptcy during a closed session.
None of the council members quoted in the article said bankruptcy was their preferred solution to the city’s budget crisis, but one member told the Chronicle that it was a “possibility.”
Dellums downplayed the possibility.
“We presented a balanced budget to the City Council, and we are continuing to make adjustments so that it stays balanced as the financial picture evolves,” the mayor said.
Oakland is California’s eighth-largest city with about 400,000 residents. Its general obligation debt is rated AA-minus by Standard & Poor’s, A1 by Moody’s Investors Service, and A-plus by Fitch Ratings.