STOCKTON (CBS13) – On Thursday, Stockton filed for Chapter 9 bankruptcy protection with a Sacramento federal court.

A pendency plan was adopted Tuesday for a day-to-day operating budget while the petition is pending with a federal bankruptcy court.

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The plan includes:

• suspending payment of bonds, claims and long term debt paid by the general fund;
• shifting some funds to other sources;
• modifications to terms of labor and employee agreements that reduce costs;
• more employee salary and benefit reductions, including reduction and ultimately elimination of city contributions to retiree medical insurance.

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Citizens will not see any changes in service after July 1.

The city says that city employees, vendors and service providers are essential to providing services and will continue to be paid in a timely manner.

“We are extremely disappointed that we have been unable to avoid bankruptcy,” said Mayor Ann Johnston. “This is what we must do to get our fiscal house in order and protect the safety and welfare of our citizens. We will emerge from bankruptcy with a solid financial future.”

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Stockton will also file a motion for permission to share information from the confidential bankruptcy mediation process.