Stockton, Vallejo warn Detroit: You ain’t seen nothin’ yet

With Detroit running out of money and options, Bridge visited two cities in California that have had their own fiscal woes – Stockton and Vallejo – to assess the impact of bankruptcy on neighborhood life. (Bridge illustration/A.J. Jones)

STOCKTON, Calif. – Here in Stockton, the standard postcards show a palm-lined City Center, without revealing that under those palm trees, the homeless sometimes outnumber the homed.

They present a charming city-funded marina, without the context that the marina might be repossessed, just as the new city hall was recently.

They display an expansive waterfront promenade, a boardwalk many residents are afraid to stroll since a little girl was hit by a stray bullet.

Life in a bankrupt city isn’t easily summarized on a postcard. The water still runs in showers. The trash is still picked up. Residents already on the bottom rung have nowhere to drop. Yet there’s a sense of surrender here, too, a whiff of weariness from a brutal, humiliating process that has yet to improve their community, or their lives.

“Stockton sucked before,” a toothless convenience store clerk says with a shrug. “It still sucks.”

As Detroit shuffles toward a potential bankruptcy, Bridge Magazine toured Stockton, America’s most recent and largest bankrupt city, and nearby Vallejo, a city that recently emerged from Chapter 9 proceedings. Our postcards from those troubled cities aren’t pretty. Both face problems strikingly similar to Detroit. And while few question the necessity of the bankruptcies, residents wonder whether the painful fiscal fixes will be enough to keep the cities afloat.

“We’re in a car and the needle is on “E,” says Marc Garman, a blogger and community activist in Vallejo, “and we don’t know if we’re going to make it to the next gas station.”

Stockton’s palm trees and shiny City Center stand in stark contrast to the financial and social woes afflicting the city. Stockon recently filed for federal bankruptcy protection – a move that may be in Detroit’s near future. (Bridge photo/Ron French)

Sun shines, but life in Stockton isn’t sunny

Sam Bowen stands outside the picket fence of his Stockton home eyeing two sullen teen-age boys in a park across the street. The boys sit on a concrete table, facing a city-owned pool with debris littering its dry bottom. Recreation and library funding has been cut in half, and gangs are filling the void.

Drug dealers are moving into the park, says Bowen, 70. They used to congregate in a downtown park. Shootings were so common there that an employee of a bank across the street from the park filled a tray on his desk with slugs he’d picked up. The city closed the downtown park, and the dealers moved into Stockton’s neighborhoods – not exactly the crime-fighting model residents wanted.

But there’s not much police can do. The city had a record 58 homicides in 2011. The police force has shrunk 25 percent since then, and the bankruptcy likely will bring more cuts. Stockton City Manager Bob Deiss warned in a letter to Gov. Jerry Brown of an additional “mass exodus” of veteran police as a result of the Chapter 9 proceedings. Deiss wrote that Stockton might “slip into municipal chaos.”

In 2012, Stockton, a city of 292,000, was ranked as the 10^th most dangerous city in America on the basis of violent crime rate and murder rate (Flint was first; Detroit, second).

A few blocks from Bowen’s home on a recent Sunday, a family is washing cars and selling bottles of water on a south-side Stockton street corner to raise money for funeral expenses for a girl who was killed. Bowen shakes his head.

“I’ve lived in this house for 40 years and this is the worse I’ve seen it,” says Bowen. “We were never squeaky clean, but nothing on the scale it is every day now.”

Panning for gold at city hall

Stockton was born in the California gold rush in the 1850s; 160 years later, Stockton was still panning for gold. The city offered some of the most lucrative pension plans in California.

One police chief retired after eight months on the job and started collecting a $204,000 annual pension. City employees earned up to 3 percent of their final year salary multiplied by the number of years of service. And that final year’s salary could be “spiked” by rolling in unused vacation and sick days accumulated over the course of their careers.

Some former workers earn more in retirement than they did when they were working, Vice Mayor Kathy Miller told Bloomberg News.

Meanwhile, the city borrowed money for massive civic improvements – a new ballpark, a marina, the downtown City Center, three parking garages and a new City Hall.

“Everyone was asking, ‘where’s the money coming from?’ ” recalls Stockton resident Aaron Ribaldi.

The money was coming from a huge increase in property values. Today, Stockton’s tax base has plummeted about 70 percent from its high less than a decade ago, leaving the city with no way to pay its bills and residents with mortgages above the value of their homes.

Stockton resident Aaron Ribaldi has seen property values plummet and crime rise as his city fell into financial turmoil. (Bridge photo/Ron French)

Ribaldi bought his modest, one-story home for $149,000 in 2001. At the peak of the housing bubble, Ribaldi says his home was worth about $350,000; today, he’d be lucky to get $100,000.

“I know in the news the city is bankrupt,” Ribaldi says. “But, so far, I can’t see a difference.”

To him, the bankruptcy is just a label put on a situation residents have been dealing with for years.

Burglaries increased in his neighborhood when the city, looking to cut costs, closed a nearby police substation. He installed security cameras around his property after his truck was broken in to. A neighbor’s vehicle was vandalized recently. He shrugs. “What can you do?”

The city invested millions in the shiny new City Center, waterfront promenade and marina from which boaters can travel to the San Francisco Bay, but then didn’t have funds for police to patrol the area. Crime and panhandling drove away the residents.

“Anything that could go down went down here,” says Jodi Cantrill, general manager at Moo Moo’s gourmet hamburger shop in the City Center. “You’d call the police and they’d come two hours later. I don’t blame them, they’d been cut back. But when you tell the public you’re not going to respond to certain call, that if you’re not bleeding, don’t bother, then things are going to happen.”

Fire department staffing is now at 1970 levels, while responding to 40,000 calls per year. “We have a lot of abandoned buildings,” says Dave Macedo, president of the local firefighters union. “We can’t just let them burn because (homeless) people are living in them. We’re just a small version of Detroit.”

Bankruptcy will likely mean deeper cuts.

“Residents are going to suffer,” predicts Macedo. “And nothing will change.”

In post-bankruptcy Vallejo, services few, times hard

Vallejo has a Six Flags amusement park on one side, an abandoned Navy shipyard on the other, and a lot of people who don’t like each other in between.

Someone brought a severed pig’s head to a city council meeting. The mayor’s personal law office was set on fire by an arsonist, and his Harley Davidson was stolen from the city hall parking lot.

Angry at personnel and pension cuts, the police chief announced that police would no longer respond to burglaries, prompting many residents to loathe cops almost as much as they hated city officials.

“The worst part of the bankruptcy wasn’t financial,” says resident Rich Martinez. “It was the divisiveness.”

If Stockton is an example of a city just receiving a diagnosis of fiscal cancer, Vallejo is a community that’s finished chemotherapy. Nobody seems particularly thrilled with the results so far.

The financial lifeboat envisioned when Vallejo filed for bankruptcy hasn’t arrived yet, and the town is still sinking in debt more than a year after emerging from bankruptcy. City leaders are still struggling with a budget deficit, even as residents beg for services to be restored.

During bankruptcy, road maintenance was cut 90 percent and arts and recreation programs were eliminated. Police and fire staffing was cut almost in half (mostly by longtime public safety workers fleeing the city).

MORE COVERAGE: In Vallejo, residents rally to protect themselves

“It got to the point where Sue and I said we have to move,” says Martinez, the neighborhood association president in one of the city’s nicer subdivisions. “But, hell, there are worse places to live.”

Well, there are a few worse places. Even though it’s officially out of bankruptcy, Vallejo was recently ranked as the sixth “most miserable city” in the country by Forbes. The same list ranks Stockton eighth and Detroit first.

In essence, Vallejo is Detroit with palm trees.

Crime is high. There have been several police shootings, one of an unarmed man. Someone was shot at a Little League baseball game. On the city’s main street, where half the storefronts are vacant, a security guard recommends an out-of-town journalist leave. “You should go to your hotel,” he says. “It’s almost sunset.”

Navy’s departure exposes city’s spendthrift ways

Vallejo was a company town, and that company was the Navy. When the Navy shipyard shut down in the mid-1990s, it began a slow erosion of the community.

Downtown Vallejo at mid-day looks bustling and prosperous, but reality is another matter. “On the city’s main street, where half the storefronts are vacant, a security guard recommends an out-of-town journalist leave. ‘You should go to your hotel,’ he says. ‘It’s almost sunset.’” (Bridge photo/Ron French)

Pay and benefits for city employees were among the most generous in California. By the time the city went bankrupt, public safety salaries and retiree benefits swallowed about 80 percent of the city’s budget.

A lot of those problems weren’t addressed in Vallejo’s recent bankruptcy.

“Bankruptcy is the absolute last thing you want to do,” says Vallejo community activist Garman. "It is a bare-knuckled brawl. It’s demoralizing and brutal.”

And if you do file for bankruptcy,” Garman says, “you have to have balls of steel.”

The city didn’t have that anatomical feature. “We didn’t go far enough” to take care of its problems in the bankruptcy, explains City Manager Dan Keen, who came to Vallejo in March 2012 after serving the same role in other California communities for 18 years.

“When I came on board here, people were shell-shocked. People asked, ‘When does it end? What is the up side?’”

Keen doesn’t have an answer: “It’s a really awful situation. It’s been devastating to the community.

“We continue to suffer the stigma of a city that went through bankruptcy. We wouldn’t dream of going into the marketplace to borrow money at this point, because we’re fairly certain no one would lend to us. And we’ve lost the confidence of our community. That loss of confidence, and the way a bankruptcy makes residents and businesses feel, should not be underestimated.”

At a meeting of the Public Safety Advisory Committee, Keen reviews a public committee’s recommendation for public safety improvements, and curtly explains why they won’t happen.

Renewed truancy enforcement: “Subject to staffing levels.”

Renewed enforcement of ordinances: “Budget issue.”

Renewed gang enforcement: “Staffing.”

Increasing police presence: “Subject to money.”

Community policing: “Again, it’s staffing.”

Keen sighs as he leaves the table. “We have a $5 million hole in the budget,” he says. “That has to be filled before we do anything additional. There really aren’t any good options.

If Keen were writing a postcard to Detroit, his message would be short, if not sweet.

“My advice for city considering this jump is get everything you can during bankruptcy,” Keen says, “because when you come back out of bankruptcy, it’s going to get even harder.”

Senior Writer Ron French joined Bridge in 2011 after having won more than 40 national and state journalism awards since he joined the Detroit News in 1995. French has a long track record of uncovering emerging issues and changing the public policy debate through his work. In 2006, he foretold the coming crisis in the auto industry in a special report detailing how worker health-care costs threatened to bankrupt General Motors.