Stockton, Calif., which is battling with creditors over its attempt to enter Chapter 9 bankruptcy protection, received $1 million from the Federal Emergency Management Agency to buy two new fire engines.
FEMA said in a statement the grant will fund 80% of the project costs.
The agency said the grants are meant to help firefighters and other first responders to get critically needed equipment to protect the public from fires and related hazards.
Stockton is locked in a battle with most of its bond market creditors over whether it should be allowed to reorganize its debts in bankruptcy court.
The four-day trial over Stockton's eligibility for bankruptcy is set for March 25.
The Central Valley city with a population of more than 300,000 filed for bankruptcy at the end of June. It is one of the largest municipalities, measured by outstanding debt, to file for Chapter 9 protection.
The market creditors, a group made up of bond insurers Assured Guaranty Corp. and National Public Finance Guarantee, investor Franklin Advisors, and trustee Wells Fargo NA, are fighting the possibility of large reductions to the city's bond debt through the bankruptcy process. The city's proposals include ceasing payments from its general fund toward $124 million in outstanding Assured Guaranty-insured pension obligation bonds.