This type of scenario is going to be played out in more and more municipalities in the very near future. This is the direct result of unsustainable government expenditures for salaries, pensions, and benefits for employees, most of whom add no real benefit to society. This is so simple and self-defining. If all those government expenses were worth it, they would be adding benefit to society, raising the tax base and paying for themselves. Instead, this proves that most of government is simply a leech on society, drawing on society's lifeblood, and giving little back.
And remember, you are only going to see more and more of this.