The State : Butte County Gets Reprieve

With the help of the state, Butte County received a reprieve from bankruptcy, but supervisors still prepared for insolvency by setting aside $200,000 to hire lawyers who specialize in bankruptcy cases. An immediate financial crisis was averted when the state agreed to defer billing the county for its $2.8-million contract with the Department of Forestry for fire protection services until July. The agreement helped erase a $3.5-million deficit and permitted supervisors to adopt a $128-million 1989-90 budget by virtually eliminating library services for 167,000 county residents and drastically cutting the county’s emergency reserve fund. If Butte County eventually declares bankruptcy, it will be the first California county ever to do so.