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Vallejo city manager advises bankruptcy
San Francisco Chronicle ^ | 5/3/8 | Carolyn Jones

Posted on 05/03/2008 9:04:25 AM PDT by SmithL

Vallejo's city manager advised the City Council on Friday to declare bankruptcy next week after weeks of negotiations with police and fire unions failed to turn around the city's economic tailspin.

If the council votes Tuesday to file for Chapter 9 protection, the city of 117,000 people would be the largest in California to declare bankruptcy - and the first to do so because of long-term economic woes.

City Manager Joseph Tanner made the recommendation after city officials scrambled for two months to fix the budget before the fiscal year ends on June 30, when the city faces a projected $16 million shortfall for the coming year and will have no money in reserve.

"Due to the time constraints we're under, we feel the prudent thing is to be prepared on Tuesday to make this recommendation to the council," city spokeswoman Joann West said. "That said, we still have an opportunity to reach an agreement with labor."

Officials from the city and its public safety unions are scheduled to meet Sunday in a last-ditch effort to reach a compromise after two years of negotiations.

The city is asking for layoffs and steep cuts in salaries and benefits, while union leaders have said that any further cuts would endanger public safety as well as the health and safety of police and firefighters.

Vallejo spends about 74 percent of its $80 million general fund budget on police and fire salaries, about 25 percent higher than the state average. It is not known whether bankruptcy would void the city's labor contracts, which some officials have pointed to as the main reason for the city's financial mess.

If it declared bankruptcy, the city would hope to get protection from creditors and time to reorganize its finances.

(Excerpt) Read more at sfgate.com ...


TOPICS: Government; US: California
KEYWORDS: bankruptcy; unionthugs; vallejo; yourtaxdollarsatwork
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1 posted on 05/03/2008 9:04:25 AM PDT by SmithL
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To: SmithL

I wonder if this will be the first of many??

Has anyone been able to audit the cities books, as would be expected of a private firm?? (just wondering)


2 posted on 05/03/2008 9:07:44 AM PDT by MCCRon58 (Freedom does not mean you are free from the consequences of your own freely made decisions.)
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To: SmithL

Here is something odd - my city in VA has a budget of 60M, and a population of about 10k.


3 posted on 05/03/2008 9:09:29 AM PDT by patton (cuiquam in sua arte credendum)
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To: SmithL
Vallejo spends about 74 percent of its $80 million general fund budget on police and fire salaries

Unbelievable

4 posted on 05/03/2008 9:10:44 AM PDT by paul51 (11 September 2001 - Never forget)
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To: SmithL

I was just googling Vallejo....they have serious illegal alien problems...but don’t do anything about the obvious....ALL our cities can go bankrupt to satisfy the cheap labor urge of a few.


5 posted on 05/03/2008 9:14:25 AM PDT by AuntB (Vote Obama! Because it's hard to blame 'the man' when you are the 'man')
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To: patton

Yeah, Vallejo is run on a relative shoestring budget, which is why those basics (police and fire) swallow up so much of the budget.

Interesting demographics in Vallejo, too. More Asians than Hispanic/Latinos, and less than 1 % black.


6 posted on 05/03/2008 9:17:46 AM PDT by skipper18
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To: SmithL
How can a city go bankrupt on loans with out going after the cosigner first?

The State as creator of the city, is the cosigner on every penny the city borrows.

People who loaned the city money, should collect it back from the cosigner, way before it gets to bankruptcy court.

7 posted on 05/03/2008 9:18:49 AM PDT by Mark was here (The earth is bipolar.)
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To: SmithL

As a businessman, I have to adjust staffing or salaries, or both to adjust to reduced income, or I would likewise go bankrupt. In the case of Valejo, I’m curious how the unions believe the city should adapt to reduced revenue. I suspect the union would suggest raising taxes, thus imposing an additional burden on the citizens, rather than compromise their own interests.


8 posted on 05/03/2008 9:22:36 AM PDT by RLM
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To: skipper18

Actually, my number were dated - total budget for Falls Chrch, VA, - ~$70M

Total population ~ 11,200

Per capita spending ~$6,250

But, that includes revenues and spending from all sources - city, state, fed, utilities (our water service steals money from the surrounding county, via exhorbitant rates, and uses it to support the city, etc.)

Stll, $80M for 115k residents is REALLY small.


9 posted on 05/03/2008 9:25:04 AM PDT by patton (cuiquam in sua arte credendum)
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To: skipper18

Didn’t Vallejo run out the Navy? And isn’t that when these problems started?


10 posted on 05/03/2008 9:25:29 AM PDT by tcrlaf (VOTE DEMOCRAT-You'll look great in a Burka!)
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To: MCCRon58

I wonder if this will be the first of many??

Almost every city in California is in trouble to a greater or lesser degree. The City of Los Angeles is in trouble with the mayor proposing the reduction of 700 ot 800 positions. This, by the way, is not necessarily the same as layoffs. On the small side, the City of Mammoth Lakes has a $3 or $4 million shortfall out of a $14 million budget, and is facing a lawsuit for $30 million on a development plan gone bad.


11 posted on 05/03/2008 9:28:17 AM PDT by RLM
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To: patton

After a little research, it seems that they were planning for ever-increasing Revenues with no connection to reality, to cover the shortfalls, since no one had the political will to stand up to the Unions..

in 2004, the local schools were $60 MILLION in the red:

“In the summary of the 2003-04 budget, for instance, district officials told the school board Vallejo would grow by 200 to 250 students during the coming academic year, but the line-item budget listed growth at 1,757 students. Because state funding is tied to enrollment, it appeared as if this new growth would bring the district an additional $8 million in revenue. But enrollment actually declined, as it had in the previous three years, by 350 to 500 students, a loss of at least $1.6 million.

Hart found other problems, so Remkiewicz revised the budget — compensating for the inflated enrollment by underestimating the expenses for teachers’ salaries, Hart said. A cursory glance made it appear the district had cut the salary rolls by $7 million, but corresponding categories like unemployment insurance and workers’ compensation did not decline.”


12 posted on 05/03/2008 9:31:35 AM PDT by tcrlaf (VOTE DEMOCRAT-You'll look great in a Burka!)
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To: tcrlaf

I think I see the problem - the VA number I cited include the schools.


13 posted on 05/03/2008 9:37:20 AM PDT by patton (cuiquam in sua arte credendum)
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To: RLM
whats truly sad, is that it is not just CA cities that are in that straight. Too many city, county and state gov’ts are spending so much trying to buy the votes of the electorate, that as the economy slows, tax revenues slow, and the politicians are loathe to scale there expenditure to actual income.

If it would to bankruptcy for me, is it any wonder it does the same for city, county and state gov’t??

14 posted on 05/03/2008 9:39:24 AM PDT by MCCRon58 (Freedom does not mean you are free from the consequences of your own freely made decisions.)
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To: SmithL

Lots of people are concerned with Social Security and Medicare going bankrupt. That is not what people should be concerned about. The Constitution clearly gives the Federal Government the power to coin money. There are MANY state and local governments on the verge of bankruptcy. That is the story that must be faced before Social Security and Medicare. The Federal Government has created and mandated the social welfare state, but it is the state and local governments that will be the first which are unable to pay for it.


15 posted on 05/03/2008 9:47:59 AM PDT by Biblebelter (Barry, your Uncle Jeremiah is speaking now, Barry can you hear him, Barry what you say now.)
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To: AuntB
Vallejo....they have serious illegal alien problems

Actually they have a serious salary problem. Sometime ago I saw a list of salaries they pay. I seem to recall LOTS of police dept and fire dept folks above $200K. This has nothing to do with aliens, illegal or otherwise.

Ml/NJ

16 posted on 05/03/2008 9:51:53 AM PDT by ml/nj
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To: All
The state budget short tens of billions of dollars, a second decade of legal and productive citizens fleeing the state while ILLEGAL aliens arrive and multiply increasing the state's population, health care and other goodies for all, and cities about to go bust.

Maybe it should just crash as a warning to the other 49 states.

Where did it all go wrong, Blanche?

17 posted on 05/03/2008 10:06:55 AM PDT by WilliamofCarmichael (If modern America's Man on Horseback is out there, Get on the damn horse already!)
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To: SmithL

The basic problem is that the local politicians are in bed with the public safety unions. To win the unions’ endorsements, the pols grant them fantastic contracts.

That, plus little known internal contract provisions such as binding arbitration (which always goes the unions’ way), minimum staffing requirements and pay parity with the top local public safety organizations insure that the unions will always take the lions share of any general fund.

The politicians are not at the mercy of the unions, they have a symbiotic relationship that leads to mutual satisfaction.

In short, the rats broke the system.


18 posted on 05/03/2008 10:37:55 AM PDT by telebob
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To: SmithL

Vallejo earmarks $6.9 million for new bus transfer station

Vallejo Times-Herald, CA - Apr 19, 2008


19 posted on 05/03/2008 10:43:56 AM PDT by kcvl
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To: tcrlaf

For 145 years, ships floated Vallejo’s economy.

“The shipyard itself was the city for 145 years, until the Navy closed the shipyard in 1995,” he said. “The shipyard and the city were pretty much tied together. Throughout its history, Vallejo always went up and down.”

The booms came in waves along with the two World Wars, then Korea and Vietnam.

“This was a real Navy town. When the ships came in, the crews came over to Vallejo for R&R,” he said. “For some time, there were lots of places for them to drink, there were brothels in one part of the downtown where no respectable people would go.”

The downtown has suffered mightily over the years, despite continued efforts to revive it. Much of the city’s new economy has centered east of Interstate 80, where the city has extended its sprawl of homes, strip malls and big-box stores.


20 posted on 05/03/2008 10:48:59 AM PDT by kcvl
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To: SmithL

In the words of a infamous reverend, “The chickens have come home to roost”.


21 posted on 05/03/2008 10:53:19 AM PDT by taxesareforever (We'll never forget Matt Maupin and his service to our country.)
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To: SmithL

They’ve squandered millions on futile downtown revitalization projects for decades.

Here a while back, there was talk of an LNG plant on the old navy base.

They’ve driven out new business for decades with NIMBY attitudes and general stupidity.

We could have gotten the big mall that is now located about 10 miles to the east of us in Fairfield.

I believe the union connection also has something to do with the lack of new businesses.

Several years ago, a school district official burnt the books. I believe the district was bailed out by the state and the official was put on paid leave and eventually received some kind of hefty severance package.

There are many causes for this situation, and I am very hesitant to blame it solely on the salaries of public safety personnel as so many have done.

Yes, some of the salaries seem exorbitant, but Vallejo’s problems are much more systemic in nature.


22 posted on 05/03/2008 11:11:20 AM PDT by Califreak (Hangin' with Hunter-under the bus "Dread and Circuses")
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To: AuntB; SmithL; SwinneySwitch; kcvl; Liz

Search for a state worker’s salary (CA)

To find a state employee, use the form below. For quicker searches, use a first and last name. You can now also search by job title, salary range or agency, so long as you at least enter a last name or pick an agency or university.

http://www.sacbee.com/1098/story/738462.html

Any similar sites for City level info?

California Public Records Act is available.


23 posted on 05/03/2008 12:45:47 PM PDT by The Spirit Of Allegiance (Public Employees: Honor Your Oaths! Defend the Constitution from Enemies--Foreign and Domestic!)
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To: patton

Falls Church?


24 posted on 05/03/2008 12:49:29 PM PDT by DeaconBenjamin
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To: SmithL

I pray for the day Berkeley does the same....


25 posted on 05/03/2008 12:51:01 PM PDT by Drango (A liberal's compassion is limited only by the size of someone else's wallet.)
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To: DeaconBenjamin

Yep. Falls Church, VA.


26 posted on 05/03/2008 12:51:20 PM PDT by patton (cuiquam in sua arte credendum)
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To: RLM
I’m curious how the unions believe the city should adapt to reduced revenue.

The staff report for next Tuesday's meeting makes interesting reading. It's on the city's website. The city's still in negotiation with the unions to try to get them to accept severe cuts, and this is partially an attempt to force the unions' hands. However, they're were already operating under a short-term agreement with the unions that resulted in them dropping part of their pay increase and reducing staffing. That agreement ended last week.

Two of the classic mistakes the city made with regards to the unions is agreeing to have pay increases tied to the CPI (meaning your expenses are tied to a different reference than your revenue), and giving the fire union the right to set minimum staffing. When the city first got in significant trouble a couple of years back, they closed a fire station. The union arbitrated the issue and won it, blowing a sizable hole in the budget.

So that's the history of how accommodating the unions have been (not very). Whether they'll come to their senses before Tuesday remains to be seen.

27 posted on 05/03/2008 12:51:56 PM PDT by ArmstedFragg
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To: The Spirit Of Allegiance

I have an Excel spreadsheet with comprehensive salary information for City of Vallejo.

The file is too big to post here.

Police Captain is $196K


28 posted on 05/03/2008 12:56:08 PM PDT by Califreak (Hangin' with Hunter-under the bus "Dread and Circuses")
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To: patton

California cities also have a number of so-called Enterprise Funds that operate things like the water department, the sewer system, etc. They have their own budgets and operate separate from the city’s general operations. The figures being given for Vallejo in the news story are just the amount in the city’s unrestricted general fund budget.


29 posted on 05/03/2008 12:56:38 PM PDT by ArmstedFragg
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To: patton

I could have read the thread without asking. I guess that takes too much time.


30 posted on 05/03/2008 12:57:19 PM PDT by DeaconBenjamin
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To: Califreak

The staff report for next week’s Council meeting estimates the average gross savings per employee for laying off one police position at $225,000. That’s salary, fringes, etc.


31 posted on 05/03/2008 1:05:33 PM PDT by ArmstedFragg
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To: ArmstedFragg

Yeah, I gathered from the posts that there are some budget tricks going on.

As much as I may detest my liberal city, when they report the budget, that is all of it - no hidden monies.

Although, they do get creative about school spending - they report it as $18k/student/yr.

It actually is about $26k, when you count the bonds, the park service budget to maintain the fields, etc.


32 posted on 05/03/2008 1:07:55 PM PDT by patton (cuiquam in sua arte credendum)
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To: skipper18

Less than 1% black?
Hardly.I live down the road from Vallejo and there are WAY more blacks than that.Drop by Hogan High or Jesse Bethel High sometime.LOTS of blacks.


33 posted on 05/03/2008 1:12:08 PM PDT by Riverman94610
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To: ArmstedFragg; Califreak; ElkGroveDan

“California cities also have a number of so-called Enterprise Funds that operate things like the water department, the sewer system, etc”


What are some of the best sources for info on these?


34 posted on 05/03/2008 2:28:54 PM PDT by The Spirit Of Allegiance (Public Employees: Honor Your Oaths! Defend the Constitution from Enemies--Foreign and Domestic!)
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To: patton; EdReform; Born Conservative; Gabz

“they do get creative about school spending - they report it as $18k/student/yr. It actually is about $26k, when you count the bonds, the park service budget to maintain the fields, etc.”


Any source of line-item sources for that? Ouch.


35 posted on 05/03/2008 2:30:45 PM PDT by The Spirit Of Allegiance (Public Employees: Honor Your Oaths! Defend the Constitution from Enemies--Foreign and Domestic!)
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To: The Spirit Of Allegiance

Sure - I posted a whole thread on it last year.

(You don’t expect me to redo the research, do you?)


36 posted on 05/03/2008 2:34:02 PM PDT by patton (cuiquam in sua arte credendum)
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To: patton

Like Jim says, we’re all Conservatives here—so once should be enough. ;^)

Got a title or link handy?


37 posted on 05/03/2008 2:36:30 PM PDT by The Spirit Of Allegiance (Public Employees: Honor Your Oaths! Defend the Constitution from Enemies--Foreign and Domestic!)
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To: The Spirit Of Allegiance

Stand by - I failed to bookmark it.


38 posted on 05/03/2008 2:44:17 PM PDT by patton (cuiquam in sua arte credendum)
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To: The Spirit Of Allegiance

http://www.freerepublic.com/focus/f-chat/1791743/posts


39 posted on 05/03/2008 2:48:35 PM PDT by patton (cuiquam in sua arte credendum)
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To: patton
Our population is about 8000 and annual budget this year was $24 million. We have 13 or 14 cops and a volunteer fire dept.

Our city supplies electricity, water/sewer, garbage--my bill this month is $147...and we have used AC during April. Gas this month is $83...but we have used furnace also. Our cost is about .o92 per KWH for electricity.

40 posted on 05/03/2008 3:05:02 PM PDT by lonestar
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To: lonestar

We have 28 cops...they used to drive Volvos (We called them volvo cops), but now they drive something else. Probably more expensive.


41 posted on 05/03/2008 3:08:02 PM PDT by patton (cuiquam in sua arte credendum)
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To: Biblebelter

What has gotten state and local governments in big trouble— and will only get worse —is the enormous retirement benefits they have given themselves.


42 posted on 05/03/2008 3:08:33 PM PDT by lonestar
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To: lonestar

BTW, the city is 2.2 square miles.

28 cops.

Can you say speed trap?


43 posted on 05/03/2008 3:09:14 PM PDT by patton (cuiquam in sua arte credendum)
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To: patton

I don’t know what ours drive but they have new cars...not very big but souped up.


44 posted on 05/03/2008 3:10:55 PM PDT by lonestar
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To: patton
Mine isn't very big but bigger than yours.

Speed trap? I think you must be in that town between me and Houston. LOL!

45 posted on 05/03/2008 3:15:07 PM PDT by lonestar
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To: patton

Thank You!

Bookmarked.


46 posted on 05/03/2008 3:17:28 PM PDT by The Spirit Of Allegiance (Public Employees: Honor Your Oaths! Defend the Constitution from Enemies--Foreign and Domestic!)
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To: The Spirit Of Allegiance

Well, go ping it! I never had an undead thread, before. LOL.


47 posted on 05/03/2008 3:20:43 PM PDT by patton (cuiquam in sua arte credendum)
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To: The Spirit Of Allegiance

The current case has a pretty decent discussion of Enterprise Funds in the staff report for next week’s meeting. It starts on page 113 of this document:

http://www.ci.vallejo.ca.us/uploads/253/A050608%20agenda%20with%20packet.pdf


48 posted on 05/03/2008 3:28:36 PM PDT by ArmstedFragg
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To: ArmstedFragg; patton; Gabz

Thanks. Fascinating, the ways accountability can be thwarted....


49 posted on 05/03/2008 3:44:15 PM PDT by The Spirit Of Allegiance (Public Employees: Honor Your Oaths! Defend the Constitution from Enemies--Foreign and Domestic!)
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To: SmithL
Without replacing the entire idiot City Council, what's to prevent them from doing it all over again?

Unless they pass an ordinance mandating funding pension commitments from present taxes, this WILL happen again.

See my new tag line, from Nelson DeMille's Plum Island.

50 posted on 05/03/2008 4:02:28 PM PDT by Publius6961 (You're Government, it's not your money, and you never have to show a profit.)
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