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Fresno, California, is Near Broke
Of course, the 500,000 residents there in Fresno, CA., still are in shock. The city has less than a day's reserve of available cash in the general fund. But, there are other cities that are in worse financial situation, both Charleston, S.C., and Pomona, CA. have no reserves left. New Orleans has only 9 days, while the megatropolis of Chicago, has about 10. Of 250 cities surveyed, most of these had 81 days in reserve to handle emergencies.
Fresno should have $10 million in reserve, yet it has only $1 million. The situation in Fresno is so dire that if a new firetruck or air conditioning unit is required, payroll will have to take a hit for it. Fresno is in between LA and SF and has been a rail hub since 1872. It is in the heart of the farming San Joaquin valley where employment is seasonal and low pay. Part of its problem was that the recession that began in 2007, only made the cities position worse because it was already in a recession.
By 2011, the city had a $36 million deficit because they had built a $26 million dollar convention center that nobody uses or needs to use. The city decided to use cash to pay down its debt and raided other city departments funds to do so. Along with all this, the city cut services and staff. So in the past four years, the city staff has been reduced by 30%. The police department lost 425 people. Its fire department shrank to 1955 levels, when Fresno was one-fifth the size.
To make up the slack, volunteers now patrol, fix streetlights, patch streets etc.The question for cities like Fresno is can they avoid bankruptcy.