Remember when it used to be a badge of shame and a tarnish on one’s character to file for bankruptcy? No?
Yesterday the Vallejo City Council voted unanimously for the city to file Chapter 9.
The city faces a $16 million deficit in the 2008-2009 budget starting July 1 and unsuccessfully negotiated with its police, firefighter and electrical workers unions for contract concessions through 2012. Public safety salaries comprise 74 percent of the city’s general fund budget. [NBC11]
According to “‘ol reliable” (Wikipedia), Councilwoman Stephanie Gomes blamed “exorbitant salaries and benefits for Vallejo firefighters and police officers” that consumed 80% of the city’s budget. “98 firefighters made more than $100,000 and 10 made more than $200,000 including overtime.”
One dissenting voice was John Riley, president of the International Association of Firefighters, who believed the city hadn’t exhausted all options and would now call for an independent state audit
NBC11’s brief history of California’s other local bankruptcies:
Orange County declared bankruptcy in the 1990s after then-Treasurer Robert L. Citron borrowed hundreds of millions of dollars while speculating in high-risk securities investments that depended on low interest rates.The county lost $1.64 billion. Desert Hot Springs also filed for bankruptcy in 2001.