Posted on 05/11/2008 12:58:37 PM PDT by SmithL
By declaring bankruptcy, Vallejo has thrust itself into the national spotlight as a test case for thousands of floundering cities desperate to unload their extravagant public employee contracts.
"There's a wave of this coming across the U.S.," said Sajan George, an adviser to struggling public entities who worked on restructuring Orange County after it declared bankruptcy in 1994. "What happens in Vallejo could definitely set a precedent."
Battered by the plummeting housing market and skyrocketing public employee contracts, Vallejo made dubious history Tuesday night by becoming the largest California city to declare bankruptcy. The North Bay city of 117,000 was on track to start the fiscal year July 1 with a $16 million deficit and no money in reserve.
By declaring Chapter 9 bankruptcy, the city hopes to freeze its debts and gain time to renegotiate its police and fire contracts, which comprise about 74 percent of its $80 million general fund budget. It also hopes a judge will void part or all of the contracts, allowing the city and unions to start from scratch.
"It's clear the way we've been doing business has not served us well," said City Councilman Tom Bartee at Tuesday's meeting. "We have to change that."
Because so few public entities have declared bankruptcy, no one's sure how labor contracts will be affected. Vallejo's public safety unions have vowed to fight the proceedings, arguing that the city has plenty of money stashed in hidden accounts and is using bankruptcy to avoid paying police and fire fighters what they're owed.
The unions commissioned a report by Harvey Rose auditing firm in San Francisco that concluded the city has other ways to balance its budget besides slashing salaries, staffing and benefits, union leaders said.
...It's very possible a judge will void Vallejo's labor contracts,
(Excerpt) Read more at sfgate.com ...
Union run government, so much for the citizens ...
Private sector companies aren’t run by mandated raises - neither should federal and state and local employees.
This mandated raises - whether or not they work, whether or not they earn the pay - is going to bankrupt a lot of districts and towns.
We voters should mandate raises no more than inflation in times or recession, or even cuts.
And cutting head count would be a good idea, too.
I love how these clowns state The Obvious in order to appear fiscally conservative -- when they could've acted to "change that" far prior to filing BK.
” floundering cities” The city is lying on one side on the ocean bottom?
When did a fish become a verb or whatever? A “Flounder” is a fish. To “founder” is a verb for the act of sinking.
Wasn’t he in Animal House?
“Flounder, you f***ed up, you trusted us.”
“Wasn’t he in Animal House?”
I think that’s where it all started, but I still can’t understand why. Just plain stoopidity I guess! Sailing people must cringe whenever they hear this. I know I do!
More than 200 comments already at the source site.
Working stiffs are getting wise to the real costs of some public servant pay deals.
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http://www.sacbee.com/1098/story/738462.html
"Fat, drunk, and stupid is no way to go through life, boy"
This is the number one statement we hear from the union thug government workers around here in the Buffalo, NY area. There always have to be these phantom secret accounts.
Our illustrious politicos around here have raised every tax, fee and license rate to keep the property tax rate to just below the constitutional limit so there is always the excuse they can raise taxes.
I need to find out more about how to file this chapter 9 so we can fight to have it done here in this county. This is the only part of the nation where we have 2, yes 2 control boards watching how they spend money. We have been run into the ground by Demonrats and the union mentality for over 50 years.
“It’s clear the way we’ve been doing business has not served us well,” said City Councilman Tom Bartee at Tuesday’s meeting. “We have to change that.”
From now on he’ll make sure it’s not clear!
^
Well, unless the legal rules have changed, the elected officials have the final word on how to run their city --- not unions, and not 'consultants' hired by the union.
If the unions are successful, why go to the trouble of having an elected City Council?
The problem is funding future liabilities out of thin air. That has never worked and can never work. If the extravagant salaries and benefits were "funded as you go", it would have been seen as unsustainable, even in the near term
Cities have budgets subject to the same financial laws as everyone else. Having "contracts" can't create something out of nothing. I just hope all the public employees in Vallejo live in Vallejo. Talk about a lose-lose approach to a problem!
Of course, that's on top of whatever their normal real estate taxes are...
In Erie County NY the public sector unions, the laborers, engineers, and every other union OWN the democrat party and their elected representatives, notice I said their’s not mine.
The unions supply the majority of the campaign cash, the supply the campaign workers, get signatures for petitions, put up signs, flood the audiences at debates with union hacks and they also run commercials.
Each ans everyone of the elected vote for the unions and all their nasty, expensive contracts and overly priced jobs. They pass things like the Tribourough amendment and the Taylor law whereby they do not give up anything in order to get a new contract, the Law protects them.
When they get a new contract it is only because WE have given them more and more. The also pass things like the apprenticeship law where WE are required to train their apprentices and are required to have so many on every single job.
The unions in NY control everything by virtue of them controlling the elected representatives and every vote they take.
They are killing us and we have no recourse because the democrats out number us 2 to 1 in this frikin state, all the good Republicans have left and we are stuck with RINO’s.
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