After 3 years, Vallejo emerging from bankruptcy

AP via SFGate ^ | 8/21/11 | TERRY COLINS, Associated Press

[SmithL]

Vallejo, Calif. (AP) --

City councilwoman Marti Brown was euphoric when she learned this historic Northern California town had received federal court approval for its plan to emerge from bankruptcy. For three years it has had the dubious distinction of being among the nation's largest bankrupt burgs.

"The first thing I said was `Yeehaw!,'" Brown said. "It feels good to finally take off these shackles. We finally get to look ahead to the future."

Vallejo, the original capital of California, was once a thriving naval center on San Pablo Bay, about 30 miles northeast of San Francisco. But in 2008, this diverse working-class city of about 116,000 was faced with tens of millions of dollars in debt and filed for Chapter 9 bankruptcy protection.

Funds for paying benefits to current and retired city workers dried up; both the police and fire departments shrank by more than 40 percent; about 60 percent of city homeowners tanked on their mortgages, and storefronts went vacant. Unemployment spiked to 15 percent.

Last month, a federal judge approved Vallejo's $50 million debt-restructuring plan, which included lower interest payments to creditors, leaner employee contracts and reduced benefits to retirees, who now must pay more for their health plans.

[Clintonfatigued]

This should be watched closely. It could be the first of many.

[SoCal Pubbie]

Vallejo was NOT the first Capital of California. Monterey was the Capital of Spanish and Mexican California beginning in 1776. The first Capital of the U.S. State of California was San Jose, in 1850. Vallejo was briefly the Capital city in 1852 and again in 1853.

[brivette]

I was stationed there in the seventies..

[pepsionice]

There could be entire books written on Vallejo’s issues. They had cops and firemen on the payroll that were pulling in $200k a year. The pensions alone were going to eat up over ninety percent of the budget within a decade if they didn’t declare a bankruptcy.

[mac_truck]

The fact the city is relying on almost $5 million in ‘grant’ money to rehire police & firemen means their plan for economic recovery is faulty. I’d expect Vallejo to revist bankruptcy again when the OPM runs out.

[ApplegateRanch]

Vallejo, the original capital of California,

---

If they can’t get this ‘fact’ right, how much of the rest of article is wrong?

State captitals of California:

San Jose
1849

Vallejo
1852

Benicia
1853

Sacramento
1854

San Francisco
1862

Sacramento
1869

[Darteaus94025]

Of course the article FAILS to mentioned that the police & fire chiefs were making 200 & 300K al a City of Bell. I am sure that the rest of their departments were getting an average of 6 figure plus as well. “Gee, we went bankrupt because of the lack of money, not our overspending or refusal to layoff or cut the pay of our fellow GRIFTERS.”

[RightGeek]

I liked the "grant money" too. What are they going to do without it?

Also laughable - "With a new economic development director on board, the mayor hopes to convert vacated space on Mare Island into a hub of green technology, manufacturing and research." LOL

[YHAOS]

Whew! Relax everyone. Now we can get back to our extraaegant ways.

[SAJ]

Precisely, and well noted.

However, what do you really expect from an 'organisation' (and I use the term VERY loosely) whose personnel routinely get their, uh, knowledge of American history out of Cracker Jack boxes?

[ArmstedFragg]

I’m not too impressed by their reliance on Green Technology businesses to get Mare Island turned around, either.