San Francisco Suburb To Declare Bankruptcy
Vallejo's City Council Chooses Bankruptcy As Solution To Fiscal Crisis
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Vallejo, Calif., City Council voted for the city to seek bankruptcy protection due to its fiscal crisis. (KPIX)
The city council voted unanimously Tuesday night following hours of public comment and months of failed negotiations with police, fire and other unions.
City Manager Joseph Tanner and the city's finance director had advised filing for bankruptcy before its fiscal year ends on June 30 because Vallejo faces a projected budget deficit of $16 million and has no money in its reserves.
The San Francisco suburb of 117,000 people also is expected to generate $5 million less in revenue than projected because retail sales and property values are down amid an economic slowdown and slumping real estate market, according to a report issued by Tanner.
Many officials and residents attribute Vallejo's fiscal troubles to overly generous pay and benefits to the city's police and firefighters. The salaries for police and firefighters currently take up 75 to 80 percent of the city's general fund.
Representatives from police, fire and electrical workers unions all argued against the Chapter 9 bankruptcy protection, saying that doing so would only make hiring already short-staffed public safety agencies even harder.
Other critics warned that if a bankruptcy judge does not rule in the city's favor, the legal costs of the proceedings could sink the city further in debt.
My message to residents of Vallejo is, this is not a death knell and should not be equated with that.
Financial consultant Sajan George"It's time to do something different. I don't like it. I don't want it," he said before voting for bankruptcy protection.
The seven-member council all said the process of making the decision was difficult and emotional.
"Honestly, if there are any more options out there, I would like someone to tell us what they are," said Councilwoman Joanne Schivley, who then recited her phone number twice for people to call her with ideas.
City leaders said filing for bankruptcy will not immediately allow them to fill the potholes on untended streets or add more detectives to the undermanned police force. But they hope, if a judge rules in their favor, it will allow them to restructure union contracts and other debts in a way that allows the city to turn itself around financially within the next few years.
In addition to being the largest California city to declare bankruptcy, Vallejo will be the first city in the state to do so because its revenues cannot cover expenses, experts say.
Desert Hot Springs, a small town in Riverside County, filed for bankruptcy in 2001 after losing a lawsuit. Orange County declared bankruptcy in 1994 after it lost money in a series of bad investments.
"There is a stigma associated with bankruptcy that's not necessarily warranted," said Sajan George, an Atlanta-based financial turnaround consultant who worked on the Orange County bankruptcy.
"My message to residents of Vallejo is, this is not a death knell and should not be equated with that," George said. "We put together a plan for Orange County, issued municipal bonds that allowed county to emerge from Chapter 9 a couple of years later, and now Orange County is thriving."
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See all 52 CommentsCounty Treasurer Bob Citron, a Democrat, made the stupid financial moves in sole control of the failed investing strategy. It was his job as an elected official. So a Democrat is primarily responsible for the disaster.
In all fairness the rest of the county, controlled by Repoublicans who benefited temporarily from the vapor gains, ignored common sense. If you claim ignorance and allow something wrong to continue you are complicit. Republicanse absolutely share the blame.
I suspect many towns have been hurt by the closures.
Posted by Nancy_Naive at 06:30 AM : May 07, 2008
Typical democrat lib......writing revisionist history becase the facts are too painful to face.
Posted by barbaraf4 at 07:55 AM : May 07, 2008
SF has made it plainly clear that they do not like the military. They are also a ''sanctuary city'' thumbing their nose at upholding federal law.
SF and surrounding areas deserve everything they''re getting. Tourism is down and they are going broke. And I. for one, am happy to see it. Maybe the ''Green Party'' can smoke some pot and come up with solutions. HA!
On another economic note...As America imports ******** for the pleasure of paying their medical bill, housing them in our jails and putting up with their quaint diseases such as drug resistant strains of TB...our refineries are selling diesel fuel to Mexico which sells for $2 a gallon...
http://www.oilwatchdog.org/articles/?storyId=19882&topicId=8059
The criminal Oil Companies could be nationalized if you would stop voting for their Demopublican puppets--like Obama...McCain...and Clinton.
and
Ignorant Republicans
We go down together...
Posted by Prinzowhales at 10:21 AM : May 07, 2008
If you like living under socialism, move to Chavez land.
Posted by Prinzowhales at 10:21 AM : May 07, 2008
If you like living under socialism, move to Chavez land.
Posted by LibH8er at 10:56 AM : May 07, 2008
Prinzowhales is a Ron Paul supporter actually, plus he has no time for the Dems or the GOP.
Lets face facts most of us draw a line down the center and take just a step to the left or the right, and yet there is no "3rd party" out there that represents this faction.
There are plenty of cities and suburbs in major trouble, this is just the beginning...
Posted by ddaryl1 at 11:15 AM : May 07, 2008
All run by democrats
Lets face facts most of us draw a line down the center and take just a step to the left or the right, and yet there is no "3rd party" out there that represents this faction.
There are plenty of cities and suburbs in major trouble, this is just the beginning...
Posted by ddaryl1
------------------
Sadly true. Unless things turn around, disaster will be inevitable and by the looks of things such a disaster would be worldwide. Is it too late to change? No. Are there things that can be done? You bet. Will they want to be done? Some, yes, some, no. Let''s see what happens, but the worst of it all still won''t take place for a number of years.
We have time, let''s use it. I think we can all agree; Democrats and Republicans alike, NOBODY wants to see things disintegrate.
Or, if nothing else, have faith for the long term.
it''s better than working for a living and getting well paid too.....
There will be more and more of these bankruptcies, as we find that city, county, state and even FED (which can print money so is "safe") pays and benefits cannot be afforded!
The Public sector gets bennies that FAR exceed that which the private sector can afford, and all on the backs of the taxpayers.. the govts. do hankypanky with budgets, promises for pensions etc. that most regular folks in REAL jobs would KILL to get. Well, not kill, but be pretty desperate for.. and when we are all starving and the retired Secretary from the DMV gets her 80% salary for the rest of her life 20 yrs from now,,... trust me, things will change..
So you Public Service folks.. we are coming.. we are coming to take your bennies, to take your huge pensions.. we won''t care what was "arranged" by your union, won''t matter.. we will drive those city, county, and state govt.s into bankruptcy, and when that happens, the rules change. And all that money you were counting on ripping out of our bleeding wallets will not be coming, YOU will be poor.. And THEN we will have justice.
The NEXT step is to kill all medical and other benefits for elected officials and make THEM buy insurance on the "open" market.. see how THEY like it. Why should a Senator get a pension? They are not an employee of govt. they ARE the govt.
A clue to the clueless: The best and brightest do not work in government service! They work where they can make a pile of money and retire. Those who are willing to trade their ambition for a comfortable job work for the government. Once they are in, they complain it isn''t enough!
Not warranted? Walking away from your financial obligations via bankruptcy is basically state-sponsored theft. Any stigma associated with it is completely deserved.
This case is just another testament to the incompetence of government.
You can''t really expect a city in California to endure something that the city of Cincinnati, Ohio has endured for the past year and a half. Reality is not something that California accepts well.
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Posted by imotorist at 02:04 PM : May 07, 2008
Maybe they did, only they smoked it, instead of selling it........It would explain alot.....
I would not drive through there. They probably have speed traps set up everywhere to get additional revenue.
TAKE WHAT THE MORTGAGE IS NOW MINUS 60 % PERCENT OFF AND RE-FI EVERYONE..THIS WOULD STOP IT ALL, AND STOP PUTTING GOOD AMERICANS ON THE STREET.
I JUST HAD MY REALTOR APPRAISE MY HOME I BOUGHT 6 YEARS AGO, PAYED 300,000 FOR IT NOTHING SPECIAL IN A SMALL TOWN IN MASS, NOW HE SAID ITS WORTH MAYBE 150,000 BUT REALLY THINKS IT WORTH 100,000..SO GUESS WHAT WHAT THE BANK WILL OWN IT FOR 300,000 BECAUSE THEY DONT WANT TO HELP IN MAKEING THE VALUE THE 100,000 TO 150,000, AND EVEN AT THAT RATE HE SAID IS BETTER THAN WHAT THEY ARE GETTING AT FORCLOSER SALES, THEY ARE GETTING 20 TO 30 CENTS ON THE DOLLAR. SO IT WOULD MAKE SENCE TO JUST RE-FI EVERYONE AT 40 PERCENT AND START OVER. THIS WOULD STOP EVERYTHING...
for-america@hotmail.com
TAKE WHAT THE MORTGAGE IS NOW MINUS 60 % PERCENT OFF AND RE-FI EVERYONE..THIS WOULD STOP IT ALL, AND STOP PUTTING GOOD AMERICANS ON THE STREET.
I JUST HAD MY REALTOR APPRAISE MY HOME I BOUGHT 6 YEARS AGO, PAYED 300,000 FOR IT NOTHING SPECIAL IN A SMALL TOWN IN MASS, NOW HE SAID ITS WORTH MAYBE 150,000 BUT REALLY THINKS IT WORTH 100,000..SO GUESS WHAT WHAT THE BANK WILL OWN IT FOR 300,000 BECAUSE THEY DONT WANT TO HELP IN MAKEING THE VALUE THE 100,000 TO 150,000, AND EVEN AT THAT RATE HE SAID IS BETTER THAN WHAT THEY ARE GETTING AT FORCLOSER SALES, THEY ARE GETTING 20 TO 30 CENTS ON THE DOLLAR. SO IT WOULD MAKE SENCE TO JUST RE-FI EVERYONE AT 40 PERCENT AND START OVER. THIS WOULD STOP EVERYTHING...
for-america@hotmail.com
you''re insane, my friend, really truly insane. if you get 60 percent off, then everyone with a mortgage will want 60 percent off as well. who will pay for that? not me!
now back on topic. what did the california cities and counties do with all that property tax revenue when home prices tripled and tax revenues doubled a few years ago. where is all that money? hundreds of BILLIONS of dollars have just vanished?
Eric Cartman
Posted by cpaide
It''s called Proposition 13. Voted in in the ''70''s I believe it freezes property taxes at the original buying price of the house at the time the occupants bought it. Thus if a family has lived in a house for 20 years, they''re paying 1983 property taxes. The increase in house value only comes into play when the house sells again.
Posted by ritewingman
Far more businesses go bankrupt than municipalities, so I think your thesis is lacking.
Posted by demslie
I am so fu*king fed up with your hateful sick little diatribes that constantly pollute this venue. You never have anything useful to say just bash, bash, bash the dems. SO BOOORING and futile considering your kind will be as outdated as the dinosaur come January.
Eric Cartman
I''m sure the beautiful city of San Francisco doesn''t miss you at all.
Eric Cartman
I''''m sure the beautiful city of San Francisco doesn''''t miss you at all.
Posted by USBrit at 04:12 PM : May 07, 2008
You do know who Eric Cartman is, don''t you?
Posted by Questionnews
Never watched South Park so no I didn''t. I feel much better educated now though. Thanks
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Posted by USBrit at 04:07 PM : May 07, 2008
That is because when governments run out of money, they need only to raise taxes, not revenue. a duuuuh!
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Posted by spadeisspade at 04:44 PM : May 07, 2008
Sadly the Unions don''t even stand up for the US worker anymore. If they did, they would be after the illegal immigrants, but noooooooooooooo, Labor Unions are hoping to add new members as soon as illegals are amnestied. WE ARE DOOMED.
935 lies. Maybe not one man, but one man''s administration and he''s the captain so the buck stops there.
Price of gas. The war pure and simple. Speculators wouldn''t have a chance to run up the price of gas this much without the general nervousness of world brought on by the war.
Terrorist attacks especially 911. No I do not blame one man for that. It took a world wide clusterfu*k for the intelligence community to let that happen.
Hurricanes. Blaming them on anything but mother nature is stupid. My personal jury is still out on global warming, but it is definitely too early to be blaming the recent higher %age of 4 and 5 power hurricanes to global warming. The catastrophe after Katrina - definitely the Bush regime to start with in immediate response. Many people have contributed since then including the highly republican lobbied insurance industry.
One last thing you don''t mention is the $2 trillion debt to China to pay for Shrub''s pet war and the resultant devaluing of the dollar by 33%. I lay all that at the feet of the Regime.
I hope that helps - gotta go now, we''ll talk again soon I''m sure.
See what I mean notblue???
+ report abuse
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oh i seen the DNC housing plan..its aka as ghetto expansion
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