Vallejo avoids bankruptcy for now

February 29, 2008 12:32:02 AM PST
City officials in Vallejo tonight have a tentative deal that may help them avoid bankruptcy. The city has been on the verge of going broke for some time, as they face big increases for police and fire protection and sagging tax revenues.

Bankruptcy is on hold for now, but if residents came to Vallejo's city hall expecting details of the tentative deal, they went home empty handed. Tonight more than 200 people filled the Vallejo City Council chambers to hear the mayor announce that a deal had been made with some of the unions and they would find out if the city would be filing for Chapter 9 bankruptcy protection. Vallejo is looking at a $9 million dollar deficit this year and could run out of money by the end of next month.

Thursday night the mayor announced a tentative deal with the police and fire unions and other ways to save money and get the budget back in order. If it is approved, Vallejo residents would feel the affects of fewer services.

"We have a tentative agreement to come up with at least a temporary fix until we can get ourselves righted and going in the right direction. The particulars of that will be made known tomorrow afternoon," said Vallejo Mayor Osby Davis.

Now the terms of that deal will be revealed when the city posts it on its website tomorrow afternoon. Then on Monday the City Council will vote on whether or not to accept it. And later on next week, both the police and firefighter's union will vote on whether to accept the deal as well, the rank and file. The Mayor did say that the unions made "major concessions," but that the idea of Chapter 9 Bankruptcy protection is still not completely out of the picture.

And what if the police and firefighters decide they don't agree with this deal? Will the deal be then dead?

The answer is absolutely, it is an all or nothing deal. The City Council, the police officer's union, the firefighter's union all have to approve it and if they don't then the mayor says the only option at that point would be filing for bankruptcy protection.