Stockton, Calif., has declared another fiscal emergency in an effort to try to reduce rising labor costs.

The City Council took the same action last year to try to renegotiate collective bargaining agreements with unions, and it is still wrangling over the matter in court.

City manager Bob Deis said in a report to the council Tuesday that Stockton’s costs continue to rise at a rate that exceeds any realistic revenue estimate, leading to a budget hole expected to exceed last year’s $23 million deficit.

Deis said the main cause of the rising costs are employee wage and benefit costs that are locked into contracts.  He said the budget problems have been exacerbated by cuts at the state level.

The city has also hired John Knox, a partner at Orrick, Herrington & Sutcliffe, to help with the fiscal emergency.

The move comes after the city hired the former assistant finance director of bankrupt Vallejo as their chief financial officer.

Stockton is the 13th largest city in California and has a population of almost 300,000.

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