Atwater, California, just admitted they did not have the cash flow to make a $2 million municipal bond payment due in November and may become the 4th local California government file for Chapter 9 municipal bankruptcy this year. The farming community of 28,000 residents has been strangled by the battle with environmentalists more interested in protecting the lifestyle of a two-inch fish called the Delta Smelt than family farms. Burdened with crippling unionized public employee wage and pension costs, while private sector wages and property values drop, Atwater is the latest in a soon to be tidal wave of local government failures.
Beginning in 2007, Federal Judge Oliver Wanger imposed limits on the amount of water pumped from the San Joachin-Sacramento River delta to farms in California’s Central Valley in order to protect the Delta Smelt. As a result, hundreds of thousand acres of farmland lie fallow, and tens of thousands of jobs were lost. Over 200,000 farmers, migrant workers and their family members were financially devastated. Homeless shelters and bread lines were overwhelmed as crops withered and banks foreclosed on family farms. Local public schools continue to report rising malnutrition as many proud families are too embarrassed to take government welfare.