Distressed Cities Weigh Bold Tactics in a New Fiscal Era

Robert Stout, the former finance director of Vallejo, Calif., was talking about the spiraling public safety costs that ultimately led his city to declare bankruptcy when he mentioned a fire that broke out two blocks from his home, not long after the city had closed some of its firehouses to save money.

“The first fire truck that went by was yellow,” Mr. Stout recalled. “Our fire trucks are red. So the first fire truck to respond was on mutual aid from a town 20 miles away. That gives you some sense of what you are facing when you get into these situations.”

“This is truly a new era for dealing with troubled municipalities,” said Michael Stanton, the publisher of The Bond Buyer, a public finance newspaper, which sponsored the packed two-day conference.

Attempts to plug budget holes with one-time transactions are giving way to other approaches. The conference discussed the strengths and weaknesses of the more powerful tools being used in many cities these days, including receiverships, emergency declarations and even bankruptcy.

New woes unfolded even as a capacity crowd of government officials, investors, lawyers and credit analysts were gathered to discuss the trend.

In Jefferson County, Ala. — which filed the biggest municipal bankruptcy in American history after its sewer-construction financing fell apart and a court threw out one of its taxes — county commissioners voted to default on a general obligation bond payment.

In Detroit, city and state officials sparred over the emergency aid the city might be able to get, and how much state oversight and control would accompany it.

Stockton, Calif., was in negotiations to avoid becoming the biggest American city yet to declare bankruptcy.

Harrisburg, Pennsylvania, the state capital, recently announced that it would default on a payment coming due to general obligation bondholders.

Here in NJ most departments are volunteers; the problem is that some of the paid ones remaining are from a bygone era when manufacturing/chemical type fires were the threat (and those companies picked up much of the tab of that protection). In my town police aren’t in a dangerous line of work (though anything can happen - we are between Newark & Jersey City, and do get some non-violent crime from Newark); firefighters are always in danger dealing with fire but don’t have many fires here.

As their unions keep their stranglehold on the taxpayers, the response has been the flight of American taxpayers and businesses, as well as a surge in illegal apartments to help homeowners defray those tax costs. The result is a town that resembles a South American city more than an American one; I don’t think there has been discussion about what to do about illegal aliens, but our town of 40K would lose about 1/4 of its population (and 1/2 of its businesses) if they left.

They live “off the grid”, contributing nothing for the fire, police, school or town services provided, leaving the remaining Americans to deal with the costs.

9/11 showed how absurd it was when the city was asked how they were going to replace all of the firemen who had been killed; the initial response was “We won’t”. Even afterwards, as the city proceeded with a plan to close firehouses throughout the city, the firemen used 9/11 as a rallying point to justify their obsolete jobs (at least in those numbers); somehow the deaths of those brave men entitled many of those remaining to an easy, overstaffed job (and nobody was allowed to question that). Note the insistence during the rubble removal that a detail of firemen be on hand to carry out any firefighter remains removed; Mayor Giuliani rightly opposed this but was shouted down, and now we’ve been presented with a bill for the health effects on those very firemen. 9/11 really brought out the best & worst in them.

In my area some towns have regionalized (after much resistance), while others are looking at a paid/volunteer hybrid (which is already in place a lot for EMTs). I think once everyone currently “on the job” is assured that they’ll be allowed to “attrite out” through retirement (including those that are 25 years old now), the resistance to these measures drops; unlike our laid-off police officers who are fielding offers from other parts of the country (who spare themselves the cost of training new officers by hiring some with experience), I don’t know that many municipalities are looking for paid firemen anymore (or ever were). Any that are considering starting paid departments should avoid a lot of headaches by immediately including ambulance services as part of their jobs and the like; once you have a caste set up with a sense of entitlement, it can be very difficult to go back or add responsibilites (teachers being the best example of this).

I'm not in favor of any publicly-funded firefighters.

Where I grew up (MD), training and equipment were funded in part by a fire tax. With the exception of a couple of paramedics ( one up from EMT) and dispatch personnel, alll the firefighters were volunteer. It worked very well, and was far cheaper than paid departments.

I'm not sure how (if?) that has changed, but it worked well then.

They’re killing suburban NJ at this point; that was what Governor Christie was elected for (and he’s doing a good job so far dealing with it). His Dem predecessor admitted that without illegal aliens NJ had lost population (and our recent loss of a representative seat supports this assertion); Christie was elected to stop the bleeding.

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.