Calif. Governor takes action as gas prices surge

10:30 AM action, Calif, Governor, prices, surge, takes No Comments

Now that refiners have been given the go-ahead to process a less expensive fuel blend, the average price of gasoline in California should go down about 15 cents a gallon. NBC's Brian Williams reports.

California Governor Jerry Brown is taking action in an effort to drive down the cost of gasoline as the state’s drivers cope with record-breaking prices at the pump.

For the third straight day Monday, the statewide average price for a gallon of regular rose to an all-time high, hitting $4.668, according to AAA.

That topped Sunday's price of $4.655 and Saturday's price of $4.6140, which broke the previous record high of $4.6096 per gallon set on June 19, 2008.

Brown on Sunday ordered state smog regulators to allow winter-blend gasoline to be sold in California earlier than usual to bring down prices. Winter-blend gas typically isn't sold until after Oct. 31. Few refineries outside the state are currently making summer-blend gas, putting the pressure on already-taxed California manufacturers.

Gary Kazanjian / AP

Luis Cuevas changes the gas prices at the Shell station off California State Route 99 as truckers deal with rising gas prices in Fresno, Calif.

A temporary reduction in supply has meant that in recent days California’s gas prices have surpassed those in Hawaii to become the highest in the nation.

In some locations, fuming motorists paid $5 or more per gallon while station owners had to shut down pumps in others.

A station in Long Beach had California's priciest gas at $6.65 for a gallon of regular, according to GasBuddy.com. Meanwhile customers at an outlet in San Pablo paid just $3.49, the lowest price in the state.

The average for a gallon of regular was $4.69 in Los Angeles, $4.71 in San Diego and San Francisco, $4.55 in Sacramento and $4.90 in Santa Barbara, according to GasBuddy.com.

The average price for a gallon of gas in the United States rose less than half a cent over the past two weeks, masking a decline in most regions and a sharp spike in California prices, according to a widely followed survey.

Gasoline prices averaged $3.8375 on Oct. 5, up from $3.8338 on Sept. 21, Trilby Lundberg, editor of the Lundberg Survey, said on Sunday.

Prices were down about 3 to 12 cents in most markets except the West, she said.

The Associated Press and Reuters contributed to this report.

In California, the average price per gallon of gas climbed 12 cents overnight to $4.61, matching the state record set in June 2008. Meanwhile, prices in other parts of the state are falling – so why are Californians getting hit so hard? NBC's Diana Alvear reports.

Read More

Stockton, Calif. files for Chapter 9 bankruptcy

6:30 AM bankruptcy, Calif, Chapter, files, Stockton No Comments

SAN FRANCISCO — Stockton, California, became the largest city to file for bankruptcy in U.S. history on Thursday, after years of fiscal mismanagement and a housing market crash left it unable to pay its workers, pensioners and bondholders.

The filing by the city of 300,000 people followed three months of confidential talks with its creditors aimed at averting bankruptcy.

"We are now a Chapter 9 debtor," Marc Levinson, the lawyer who filed the city's voluntary petition in the Eastern District of California, in Sacramento (Case 12-32118) told Reuters.

Pleadings in support of Stockton's eligibility for Chapter 9 bankruptcy will be filed on Friday, Levinson said.

Stockton, which officially declared insolvency and its desire to restructure its debt, also filed a separate list of its major unsecured creditors.

The California Public Employees' Retirement System, which manages Stockton's pension plan, tops the list. The retirement system has a $147.5 million claim for unfunded pension costs.

Other top creditors include investors holding $124.3 million of Stockton's pension obligation bonds, $40.4 million of the city's variable rate demand obligations, $35.1 million of the city's public facilities fees bonds and $31.6 million of the city's parking garage debt.

Wells Fargo Bank NA is listed as the trustee for the investors.

"We are extremely disappointed that we have been unable to avoid bankruptcy," Mayor Ann Johnston said in a statement. "This is what we must do to get our fiscal house in order and protect the safety and welfare of our citizens."

Negotiations with creditors ended on Monday with Stockton failing to win enough concessions to help close its shortfall for the fiscal year starting on July 1. The city will also file a motion to request permission to share information from the confidential mediation process.

Healthcare to be phased out, pensions unchanged
The Chapter 9 bankruptcy filing, a rare event for U.S. municipal debt issuers, was left as the only option to close a deficit of $26 million in Stockton's budget for its the new fiscal year, according to city officials.

The budget approved on Tuesday by Stockton's city council suspends $10.2 million in debt payments and cuts employee compensation and retiree benefits by $11.2 million to help close the deficit.

About $7 million in savings would come from cutting retiree medical benefits for one year.

While the retiree medical benefits will eventually be eliminated, Stockton plans to leave its public pensions unchanged while in bankruptcy proceedings. Attempts to pare them would invite long and expensive challenges.

Stockton becomes the nation's most populous city to file for Chapter 9 bankruptcy. But Jefferson County, Alabama, remains the biggest municipal bankruptcy in terms of debt outstanding, as it had a debt load exceeding $4 billion when it filed in 2011. Stockton has about $700 million in bond debt.

Stockton has suffered a sharp drop in revenue since the collapse of its once red-hot housing market, forcing it to cut more than $90 million in spending in recent years.

The housing boom transformed the farming city into a distant bedroom community of the San Francisco Bay area, and the bust put it at, or near, the top of national foreclosure rankings in recent years.

Standard & Poor's Ratings Services downgraded Stockton to default from selective default on Wednesday, citing the city's move toward bankruptcy and expectations that it will not substantially pay all of its obligations as they come due.

Moody's Investors Service on Wednesday cut to 'Caa3' various general fund-supported debts of the city, putting the ratings in the "substantial risk" category, one notch above the "may be in default, extremely speculative" grouping. Moody's said its move was based on Stockton's bankruptcy budget.

(c) Copyright Thomson Reuters 2012.

Read More