|
|
 |
|
Vallejo
in danger of declaring bankruptcy
|
By
Carolyn Jones
San Francisco Chronicle
February 21, 2008
Vallejo
is on the brink of a dubious distinction - becoming the first
city in California to declare bankruptcy.
The fiscal crisis, which comes more than three years after the
state took over the city's debt-ridden public schools, is a
result of snowballing police and firefighter salaries and
overtime expenses coupled with plummeting tax revenue from the
weak housing market, officials say.
In response, the City Council is considering cutbacks at the
city's library, its public swimming pool and its history
museum as the city faces the prospects of running out of cash
in the coming weeks, officials said Wednesday.
"It's very, very serious. We're at the point now where
there's no more wiggle room," said Councilwoman Stephanie
Gomes. "It's pretty dire, and we need to start being
honest about what this means."
The Solano County city began the fiscal year with a $4 million
surplus. But it is spending $10 million more than it is
receiving in revenue and will face a budget deficit of $6
million by the end of the fiscal year, in June, according to
City Manager Joseph Tanner. By mid-April, the city will be
unable to pay its employees, Tanner said.
The council is scheduled to address the crisis at its meeting
on Tuesday.
Tonight, Vallejo residents are expected to pack a town hall
meeting hosted by Gomes and Councilwoman Joanne Schivley to
learn how bankruptcy would affect the city of 120,000
residents.
Vallejo is hardly alone in its struggles with spiraling public
safety costs. Most cities in California spend about half their
general fund on public safety, including salaries, fire
engines, police cars, weapons and other supplies, said James
Keene of the International City and County Management
Association, based in Washington, D.C.
Cities spend about 75 percent of their general funds on
personnel, while the rest goes to libraries, parks, recreation
and other services, said Keene, former city manager of
Berkeley.
"It's not just Vallejo. California has some of the
highest public safety costs in the nation," Keene said.
"In the future, as we enter a downturn, I'd be surprised
if we don't see significant changes to that."
Since the federal government allowed municipalities to declare
Chapter 9 bankruptcy during the Depression, fewer than 500
cities have taken the action, according to federal court data.
Declaring bankruptcy allows a city to reorganize its debt and
still meet basic operating costs.
The highest-profile bankruptcy case in California was that of
Orange County, which declared bankruptcy in 1994 after bad
investments led to a $1.6 billion loss.
Faced with a similar fate, Vallejo is in emergency
negotiations with police and fire unions in an attempt to
agree on pay cuts. The city also is considering:
-- Reducing maintenance and supplies at the Vallejo Naval and
History Museum, Cunningham Pool and public library.
-- Rescinding 15 percent pay raises for police and
firefighters.
-- Laying off 16 city employees.
-- Rotating closures of fire engine companies.
-- Cutting funding to all community groups.
Gomes and others have blamed much of the city's financial woes
on police and fire contracts, which she says comprise 80
percent of the city's $80 million budget.
The starting salary for a Vallejo firefighter is about $70,000
a year, among the highest in the state. Ten firefighters
earned more than $200,000 each last year, including overtime,
city officials said.
"Of course we value our police and firefighters and the
risks they take, but their salaries are simply too high,"
Gomes said. "They can afford to live in Marin and Napa,
and it's the very hard-working, blue-collar residents of
Vallejo who are bearing the repercussions. It's unfair."
Firefighters say their earnings are high because the
department is so short-staffed they're forced to work huge
amounts of overtime.
Since 2001, 30 firefighters have retired or left the
department, and only three have been hired, said Vallejo fire
Capt. Jon Riley, vice president of Fire Fighters Union Local
1186. And after rumors of bankruptcy began circulating, 14
more retired, fearing that their benefits and salaries would
be cut, he said.
"We're having to work an extraordinary amount of
overtime," he said. "We make great salaries, but if
you're not able to see your family, what good is it?"
Firefighters typically work 48-hour shifts with four days off
between shifts. Many Vallejo firefighters are now forced to
work 96-hour shifts with two days off, he said. Sleep
deprivation, divorce and child-care complications are common,
he said.
"I'd say morale has hit rock bottom," he said.
"But we're still committed to providing the highest level
of service to the citizens of Vallejo."
Vallejo residents, meanwhile, are outraged at the city's
economic straits. The problem should have been addressed years
ago, when it first became apparent, said community activist
Marc Garman.
"We've been screaming about this for a long time,"
he said. "It's a mess. It's chaos. It's a disaster.
Vallejo's become the poster child for mismanagement. And this
may happen throughout California."
How to
get involved
-- Two
city councilwomen will host a community meeting with a
bankruptcy lawyer tonight at 7 p.m., 733 Tennessee St.,
Vallejo.
-- The City Council meets at 7 p.m. Tuesday at City Hall,
555 Santa Clara St., Vallejo.
-- The city's report on the budget crisis can be read at links.sfgate.com/ZCMV
How
Vallejo went broke
Officials
say the Solano County city is likely to run out of cash in a
few weeks as a result of expenses that are expected to
exceed revenues by about $10 million this year.
Expenses: Salaries and overtime for police
officers and firefighters have burgeoned as a result of
union contracts and staff shortages that have forced public
safety workers to put in extended hours.
Revenues: The souring economy has hit the
city hard, resulting in nearly $2 million less revenue from
sales and property taxes than expected.
Source: City of Vallejo
E-mail
Carolyn Jones at carolynjones@sfchronicle.com
|
Copyright 1999-2008, California Coastal Coalition
Phone: (760) 944-3564
|
|
|
|
