Vallejo, California, goes bust

[marmar]

AP, via HuffPost:





Vallejo, Calif. files for bankruptcy protection
TERENCE CHEA | May 23, 2008 08:02 PM EST |


SAN FRANCISCO — The city of Vallejo filed for bankruptcy protection Friday to deal with a ballooning budget deficit caused by soaring employee costs and declining tax revenue.

The San Francisco Bay area suburb of about 120,000 residents became the largest California city to seek bankruptcy protection.

Mayor Osby Davis said the city's attorneys filed papers seeking Chapter 9 bankruptcy protection in federal court in Sacramento.

"We've exhausted all avenues at this point, and this is all we had left," Davis said. "I had hoped to avoid it all the way up until yesterday. It's something we can't avoid ... We can't pay our bills."

Vallejo will ask the judge to set a June 9 deadline for creditors to challenge the filing, said Marc Levinson, the city's bankruptcy attorney. If there are no objections, the city automatically enters bankruptcy protection.

The police and firefighter unions plan to file a legal challenge, arguing that the city's finances aren't as dire as officials claim and there are other ways to fix the budget deficit, said Mat Mustard, vice president of the Vallejo Police Officers Association.

"Filing for bankruptcy is and was unnecessary," Mustard said. "Yes, I believe they have a financial crisis, but I think they're turning their crisis into a catastrophe by going into bankruptcy." ..........(more)

The complete piece is at: http://www.huffingtonpost.com/2008/05/23/vallejo-calif-files-for-b_n_103356.html

[snappyturtle]

1. I think we'll be seeing more of this, unfortunately. n/t

[Jack Rabbit]

2. Vallejo strived for years on the back of a military base

Mare Island closed in the mid-nineties. Now the place is kaput.

[Adsos Letter]

3. They also negotiated contracts for city fire and police...

that were much higher than the norm (years ago) and that is coming back to haunt them a bit (this according to the firemen from a city close by, with whom I work)