The city council of Atwater, Calif. approved a fiscal emergency declaration yesterday, a move that could put the city of 28,000 on the path to becoming the fourth city in the most populous U.S. state to declare bankruptcy this year, Reuters reported yesterday. California requires its local governments to try to enter talks with their creditors to avert bankruptcy filings, but municipalities may declare fiscal emergencies to circumvent the law and file for bankruptcy. Like Stockton, Calif., which filed for chapter 9 earlier this year, Atwater has fallen on hard times after its housing market imploded and sent property tax revenue plummeting. Furloughs and a hiring freeze were not enough to stem Atwater's losses and the city now faces a budget gap of more than $3 million.
