Thread: Vallejo City Council Discusses Filing For Bankruptcy

Vallejo City Council Discusses Filing For Bankruptcy

Posted: 6:39 AM Feb 27, 2008
Last Updated: 7:33 AM Feb 27, 2008

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A | A | A Vallejo officials met tonight to discuss the city's financial troubles, which are pushing it closer to declaring bankruptcy.

After labor talks aimed at keep the city solvent broke off last night, the city manager recommended that it file for bankruptcy protection.

With Vallejo facing a six million dollar shortfall, officials say the city will run out of money by the end of next month.

The city council took no action tonight, and will meet again on Thursday to vote on the city manager's recommendation to seek bankruptcy protection. Service and staffing cuts will also be considered.

http://www.kolotv.com/home/headlines/16022812.html

Union blames city manager
By SARAH ROHRS/Times-Herald staff writer
Article Launched: 02/27/2008 06:43:27 AM PST


Bankruptcy lawyer Marc Levinson spoke to the Vallejo City Council Tuesday night, outlining the process of Chapter 9 bankruptcy and the city's options. (Mike Jory/Times-Herald) An agreement to head off Vallejo's bankruptcy was about to be cemented when the city manager stepped in and nixed it, the president of Vallejo's powerful fire union told the Vallejo City Council and hundreds of worried residents Tuesday.
"We had closed this year's deficit down to zero," Kurt Henke, president of the International Association of Fire Fighters Local 1186, told a packed council chambers.

The agreement would have put the city on the tract to financial stability and prosperity, Henke said. But, early Monday morning he said he was advised by City Manager Joe Tanner's assistant that the "city manager himself had cost the deal and said it wasn't worth doing."

Henke said that the deal had been hammered out over months with

A crowd filled the Vallejo City Council chambers Tuesday night, overflowing into the hallway outside, as the council heard staff presentations and resident comments on the possibility of Chapter 9 bankruptcy by the city. (Mike Jory/Times-Herald) the help of Tanner assistant Craig Whittom and Mayor Osby Davis. Friday night, Davis had signaled a deal was in the offing, but had provided no details.
As of press time, Tanner was still in Council Chambers for the remainder of the council meeting, in which council members were questioning a bankruptcy lawyer, and could not be reached for comment.

But in a lengthy report issued Monday night, Tanner said the best course for the city was to file for bankruptcy protection or the city would
run out of money in a month. The council is expected to consider the recommendation Thursday night.
Emotions ran high Tuesday as hundreds packed the Council Chambers to learn more and voice opinions about Vallejo seeking bankruptcy protection. Word that time is running out for the city to forge a labor settlement drew out scores of residents, business leaders, members of the faith community.

The city faces a $6 million general fund shortfall, and top staff say the general fund will run out of money by the end of March. Thursday, the council will also consider millions in service and staffing cuts, or possibly trying once more to work out a settlement with the unions.

Many residents strongly urged the council to avoid bankruptcy, while many others - repeatedly blaming the public safety unions - said that the Chapter 9 filing may be the only way to restructure the city budget, and dissolve the labor contracts, now set to expire in 2010.

"Bankruptcy is a bad option. It's a bad option for a lot of reasons," said Vallejoan Andy Russo, vice president of the International Federation of Professional and Technical Engineers. Property values will plummet and give Vallejo a "stigma which will stay with us for a long time."

However, resident Dave Corbett said bankruptcy could be like "chemotherapy" for the city, unpleasant and painful, but healthy in the long-run. He added labor contract negotiations have been fruitless so far.

"Do what's right for Vallejo. If you have any integrity at all, cut those strings," said business owner Rick Mariani, referring to a new council majority that several months ago replaced one that had been more confrontational with the unions.

Team Chevrolet owner Kenny Ross told the council that filing for bankruptcy would harm local businesses, while Chamber of Commerce treasurer John Feldman said avoiding bankruptcy should be a high priority.

Jon Riley, vice president of International Association of Fire Fighters 1186, said the unions have negotiated a proposed settlement because they have trust and confidence in Mayor Davis and the council.

"We need to work together and quit pointing fingers and come up with solutions," Riley said. "We're waiting for your phone call, Mr. Mayor."

Council members made no decision Tuesday, but heard a 15-minute presentation from bankruptcy attorney Eric Levinson on the ins and outs of Chapter 9 protection.

Levinson said Chapter 9 protection under the federal bankruptcy code would give the city "breathing room," help it from running out of money and protect it from creditors. However, he said the process is expensive. Cost estimates ranging from $500,000 to $1 million.

Once the city files for bankruptcy, Levinson said the city will stay open, employees would continue to go to work, with "business as usual." He said the council would stay in control and a financial plan would be created, including negotiations on labor agreements.

http://www.timesheraldonline.com/ci_8378262

Hey Vallejo... welcome to the third World as the Newest Broke A$$ City

You and the Liberal Elite got what you paid for ... please stay in your city and suck down the fruits of your labor.... your Illegal Alien programs feed local, and state government wants for Illegal Aliens so (Keep them) keep the bills that come with them as well

Do not move and import your funk to my city ... we are trying to oust our own corrupt officials