>Vallejo Files For Bankruptcy Due To Budget Woes
VALLEJO (CBS 5 / AP) ― The city of Vallejo filed Friday for bankruptcy protection to deal with a ballooning budget deficit caused soaring employee costs and declining tax revenue.
The Bay Area community of about 120,000 residents is the largest California city to declare bankruptcy.
Mayor Osby Davis said the city’s attorneys filed papers seeking Chapter 9 bankruptcy protection in federal court in Sacramento on Friday morning.
“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.”
The City Council voted to authorize the city manager to file for bankruptcy on May 6 after months of failed negotiations with its public safety unions.
Some officials blame the chronic financial crisis on labor contracts they said provide overly generous pay and benefits to the city’s police officers and firefighters.
Those city workers comprise about three-quarters of Vallejo’s general fund.
The unions maintain compensation for Vallejo’s public safety employees is in line with that of other Bay Area cities.
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