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Stockton council votes 6-1 to enter mediation
Stockton council votes for mediation, hopes to avoid becoming biggest US city to go bankrupt
By The Associated Press

STOCKTON, Calif. (AP) ' The city of Stockton in California's crop-abundant Central Valley is moving forward with a plan to enter mediation and try to renegotiate its debt with creditors.

KRCA-TV reports the City Council voted 6-1 late Tuesday in favor of the mediation plan, after dozens of residents voiced their opposition.

City leaders say the move is aimed at preventing Stockton from becoming the nation's largest city to fall into Chapter 9 bankruptcy protection.

But KXTV reports mediation is a required step in the bankruptcy process. California state law says cities must have a 60-day mediation period with its creditors in which they discuss ways to avoid bankruptcy. Afterward, a city is allowed to file for bankruptcy if no plan has been reached.

The river port city of about 290,000 was hit hard by the recession and foreclosures, forcing it to make deep emergency cuts, including to its police department. City leaders say Stockton is on the brink of insolvency and could soon be unable to pay its debts.

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