STOCKTON, CA - The Stockton City Council is poised to vote on whether or not to start the process to file for bankruptcy at Tuesday night's meeting.
California state law says cities must have a 60-day mediation period with its creditors where the city discusses ways to avoid bankruptcy.
After the mediation period, the city is allowed to file for bankruptcy if there is no plan to avoid it.
If Stockton files for Chapter 9 bankruptcy protection, it would be the largest city to file for bankruptcy in the country. Orange County declared bankruptcy in 1994; Vallejo filed for bankruptcy in 2008 and just emerged last year.
Stockton City Manager Bob Deis said a series of bad financial decisions and bad luck put Stockton close to the bankruptcy option. He alluded to a city council decision made in the 1990s as one example.