Vallejo Poised to be First CA City to Declare Bankruptcy

[El Pinko]

http://www.nbc11.com/news/15345539/detail.html

Vallejo On Brink Of Bankruptcy

VALLEJO, Calif. --
by John Boitnott, Web Producer
The city of Vallejo is on the brink of becoming the first California city ever to declare bankruptcy, City Council members said Tuesday.
Vallejo may run out of cash as early as March, council member Stephanie Gomes said.
"Not only that, but now we have 20 police and fire employees retiring because they are afraid of not getting their payouts," Gomes said. "That means we have another few million dollars in payouts that we had not expected. So the situation is quite dire."
Gomes said the situation has been building for more than a decade. "This has been happening for quite a while. For 15 years the city council has been putting Band-Aids on the problem. (It has been) extending contracts and deferring payments for public safety to the next years as a way of balancing the current budget."


The article doesn't mention the effect of the housing crisis on Vallejo's finances, but I can't imagine that the recent boom-bust cycle was totally unrelated...

[derby378]

1. A future ghost town?

With no cash flow or infrastructure, will the citizens of Vallejo migrate or just dig in and hope for the best?

[BlueJazz]

2. Oh..Me...I am SO glad that we have chosen to fight the Terrorists over there and not here.

It's much cheaper....

[jody]

3. Government like individuals and corporations must learn to live within its income or go bankrupt. nt

[Adsos Letter]

4. I live just on the other side of the hill from Vallejo...

It is actually the hometown of the (now defunct) Mare Island Naval Shipyard. The city (100,000+ people) has struggled since the shipyard closed down (back in the 90's, I think). The base was huge, and THE major employer for the area (along with Kaiser Steel, now also closed); attempts to utilize the abandoned facility have met with only limited success.

The whole area between Vallejo and Napa expanded, boomed really, during the construction bubble as demands for housing for Bay Area workers rose, as well as those in the local blue-collar service sector... but now the area is overbuilt, occupied housing foreclosures are rising, and the local job market is contracting in many sectors, adding to foreclosures...