FacebookTwitterRedditEmail

Going Bankrupt in Vallejo

Bankruptcy is a damn nuisance.  But it is a boon to the fiscally irresponsible, notably town councilors and municipal officials.  The city of Vallejo in the Bay Area has filed for bankruptcy protection
(May 23) under Chapter 9 of the Banking Code through its city manager, fearing a queue of hungry creditors.  A report on the council’s special meeting in February predicted insolvency in late April.

The seven-member City Council authorized the move unanimously on May 6, thereby joining a list of 500 or so municipalities throughout the
US which have invoked the measure since the Great Depression.  Such an move reorders debt arrangements while still financing operations.
Vallejo remains to date the largest town in California to have taken the plunge, after Orange County (1994) and Desert Hot Springs (2001).

Reasons for this insolvency crisis in this town of 120,000 vary.  Officials and councilors have found a key culprit: the city’s supposedly generous pay benefits to police officers and firefighters.

These, it is claimed, have pushed the deficit to $16 million at the start of the new fiscal year in July.  Councilwoman Stephanie Gomes might ‘value’ the police forces and firefighters, but she can’t help
turning her nose up at them.  They are the ones who ‘can afford to live in Marin and Napa’.  The ‘very hardworking, blue-collar residents
of Vallejo’ have paid the penalty.

Some balance is in order here.  Salaries may be high, but the working hours are commensurately long and wearing.  According to the San
Francisco Chronicle (February 21), rehiring in the firefighting forces has not kept apace with retirements since 2001.  Overtime sessions are
unavoidable, with 96-hour shifts, punctuated by a two-day break, common.

Cities, like common mortgage holders, have been struck down by the credit squeeze, entering into labor contracts now deemed unsustainable.  Tax revenue has also shrunk by $2 million, with drops
in revenue recorded in development fees, property tax and sales tax. Vallejo is, to use the words of Capt. Jon Riley, vice president of the
Fire Fighters Union Local 1186, the ‘poster child for mismanagement’.

According to Gomes, who was interviewed in February this year, ‘We’ve been spending more than we’ve been making for 20 years and it’s time
to pay the piper.’  The vast portion of the city’s general fund (some $74 million) goes towards public  safety contracts (fire and police
services), though this is not unusual for cities in California.

Unions and various associations are skeptical about the council’s moves. The municipality had filed for bankruptcy protection and called it necessary to avert the catastrophe of insolvency.  Union management is making the argument, with some grounds, that the case for insolvency has not been made out. Individuals like Mat Mustard, vice
president of the Vallejo Police Officers Association, are irate.

The meeting proceedings of February discuss the consequences of such a suit.  ‘Bankruptcy will not create additional revenue.  A bankruptcy
filing may allow the City to take actions contrary to existing contractual obligations that would allow continued General Fund operations.’  An argument might well be made that bureaucratic incompetence has been insulated.

Legal teams who specialize in bankruptcy are beside themselves with joy.  Other municipalities may well follow Vallejo.  Mark Levinson, a
bankruptcy lawyer retained by Vallejo is smacking his lips.  ‘Vallejo is not the only city in California or the U.S. that is saddled with
employee contract that are burdensome.’

BINOY KAMPMARK was a Commonwealth Scholar at Selwyn College, University of Cambridge.  He can be reached at bkampmark@gmail.com.

 

More articles by:

Binoy Kampmark was a Commonwealth Scholar at Selwyn College, Cambridge. He lectures at RMIT University, Melbourne. Email: bkampmark@gmail.com

August 03, 2020
Linda Pentz Gunter
The Resistible Rise of Nuclear Gangsters…and Their Downfall
John G. Russell
The Sleep of Reason Produces Monsters
Cal Winslow
Their Heroes and Ours: California’s Health Care Crisis
David Barber
Renouncing White Privilege: A Left Critique of Robin DiAngelo’s “White Fragility”
Linda G. Ford
Free Joy Powell! America’s Political Prisoner for Fighting Police Brutality
Prabir Purkayastha
Trump’s Withdrawal From WHO: a Cover-Up for His Abject Failure on COVID-19
Dean Baker
The Plunge in Consumption of Services Leads to a Record 32.9 Percent Drop in GDP
Ramzy Baroud
Human Rights Defenders: Palestinian Eyewitness Testimony of the Execution of Abdul Fattah al-Sharif by Israeli Soldier, Elor Azaria
Karen J. Greenberg
Accountability is Gone in America
Cesar Chelala
A Wrong Message for the Pandemic
Jonah Raskin
Chesa Boudin: Reformer in the San Francisco DA’s Office
George Wuerthner
Forest Plan Failure in the Montana Rockies
Ralph Nader
Speaker Nancy Pelosi Writes to Me!
Laura Flanders
Take on the Tech Mob Now or Perish
CounterPunch News Service
Conservationists Intervene to Oppose New Dam Project Near the Grand Canyon
Weekend Edition
July 31, 2020
Friday - Sunday
Bette Lee
Tear Gas and Thugs at the BLM Protests in Portland
Rob Urie
Russiagate, Nazis, and the CIA
Jeffrey St. Clair
Roaming Charges: Demon Seed
T.J. Coles
The Space Wars Have Begun
Andrew Levine
Insurgents and Iconoclasts Needed (But for Now Lay Low)
Paul Street
“Time to Say the F-Word”: Why Now?
Matthew Scully
The Triple Antagonist of the Police, Policing, and Policy
Richard D. Wolff
The Consequences of Inequality Can Be Fatal
Richard C. Gross
Feds Give In, Maybe
Erik Molvar
Inside Trump’s Attack on America’s Environmental Charter
W. T. Whitney
“We Charge Genocide:” Forerunner at UN of Black Lives Matter
Brett Wilkins
The Bologna Massacre, the ‘Strategy of Tension’ and Operation Gladio
Nick Pemberton
Does The Left Stand With Uighurs?
Cesar Chelala
Donald Trump’s Misguided Attacks on WHO
Barbara G. Ellis
A Portland ‘Sit-Down’ Can Rock Trump’s Boat
Nancy J. Altman
On Medicare and Medicaid’s 55th Birthday, Let’s Expand Benefits—Not Cut Them
John O'Kane
Systemic Racism And Progressive Reconstruction
Binoy Kampmark
Julian Assange’s Political Indictment: Old Wine in Older Bottles
Ramzy Baroud
List of Targets Leaked: Israel Fears the Worst in ICC Investigation of War Crimes
Marshall Auerback
Every Step the EU Takes Toward Financial Unity Sows New Seeds of Its Potential Collapse
Bob Fitrakis - Harvey Wasserman
Fascist Ohio’s Bribed $60 Million Nuke Reactor Meltdown
Walden Bello
Could the Duterte Regime be COVID-19’s Next Victim?
Jonathan H. Martin
Bernie Groups Break Free of Dems: New Party Rising?
Ron Jacobs
Hunting with the Father
Michael Welton
What Does It Mean To Tolerate Others?
Eve Ottenberg
Climate Change is Genocide
Serge Halimi
The Twenty Years War
Kathy Kelly
Yemen: a Torrent of Suffering in a Time of Siege
Myles Hoenig
American Exceptionalism
Robert P. Alvarez
I Was Tear Gassed in Portland … and Not Only by the Feds
FacebookTwitterRedditEmail