Local governments have essentially zero rights under the Virginia Constitution. All their powers derive from the state government, and they have no powers that are not expressly delegated (e.g. Dillon Rule).

So the state could bail them out if it wanted to, or give them access to federal bankruptcy courts, but I think it will do neither until the situation is more dire than it is now and there is a change in municipal leadership. The state Assembly will not want to bail out a City Council that it thinks is just going to do more of the same.

McAuliffe will want to help, but he is pretty much powerless to do anything other than reallocate some state troopers. Virginia is a weak-governor state.