Hardball in Vallejo, California

Cities and municipalities have been promising government workers more in salaries and pension benefits than cannot possibly be met. Unfunded liabilities are mounting and the ticking time bomb finally went off. What had to happen, did. Vallejo California Declared Bankruptcy.

The North Bay city of 117,000 now heads into largely uncharted territory, as no California city of this size has ever opted for this route. "This has been a long frustrating process for everyone," said City Manager Joseph Tanner. "There are no winners here tonight."

My Comment: I disagree. Taxpayers of Vallejo are winners, perhaps more so than if a deal was struck.

After about four hours of discussion and public comment from the standing-room-only crowd, the council voted 7-0 to approve Tanner's recommendation to declare Chapter 9 bankruptcy protection as a means to reorganize its finances, which have been shattered by spiraling public employee salaries and the plummeting housing market.

The move allows the city to freeze its debts while maintaining city services. Police, fire and other unions and many in the audience were outraged at the move, accusing the council of poor leadership.

My Comment: There was indeed poor leadership in Vallejo. Failed leadership is decades old. Year after year Vallejo has agreed to contracts the city could not afford. This move attempts to correct the error.

The city and its police and fire unions held a final contract negotiating session Sunday but failed to reach an agreement before Tuesday's City Council meeting.

The city and its public safety unions have been at the bargaining table for about two years. The city is asking for its police and firefighters to take salary, benefit and staff cuts, while the unions say any further cuts would endanger public safety as well as the safety of the police and firefighters.

My Comment: Exactly how does a cut in pay or benefits endanger public safety or the safety of the workers? Clearly it doesn't. This was all or nothing hardball by the unions and it could be a fatal mistake. Pension benefits will now be under court review. Anything goes.

Vallejo spends 74 percent of its $80 million general fund budget on public safety salaries, significantly higher than the state average. The generous contracts are the result of deals struck in the 1970s, following a police strike that left the city in turmoil.

My Comment: If I was a Vallejo taxpayer, this is what I would be asking: What special talents does the firefighter and police force in Vallejo have that merit "significantly higher than the state average" wages and benefits?

The City Council had been split on whether to declare bankruptcy. Some, including Mayor Osby Davis, said the stigma would threaten the city's long-term economic development and discourage investors, while others said it would give the city time to restructure its budget and offer protection from creditors.

What's unknown is whether bankruptcy will dissolve the city's labor contracts, which most City Hall staffers say is the primary reason for the city's financial mess. A judge will have to decide whether to dissolve the contracts.

My Comment: Taxpayers everywhere should be rooting for those contracts to be dissolved. And if that happens, it will set a nice precedent for renegotiating all unaffordable government contracts, which is to say thousands of city and municipal contracts across the nation.

No Balls In D.C.

It's a game of union hardball in Vallejo, but there are No Balls In D.C.

Please consider this Pentagon Threat: If Congress doesn’t act, soldiers will go unpaid.

Pentagon Press Secretary Geoff Morrell briefed the press, starting with a statement about the Global War on Terror budget supplemental request, which is slated to go before the House this week. He said that currently the military is borrowing form Army payroll accounts in order to fund the wars in Iraq and Afghanistan and that if the Congress does not act the Defense Department will not be able to pay soldier, including those in Iraq and Afghanistan after June 15, 2008. He said the only options available if Congress does not pass $108 billion in war supplementals would be for the Defense Department to petition Congress to allow certain “re-programming” of other funds so that soldiers don’t’ go without pay.

This is not about paying soldiers, this is about inappropriate spending. And Congress does not have the balls to do what needs to be done: Balance The Budget.

If the US government was required to have a balanced budget then this stupid war would not have been fought in the first place.

This is what I want Congress to do.

• Keep paying the soldiers.
• Stop paying themselves until they pass a balanced budget that includes future liabilities.

If Congress wants a war or war funding then fine. At least have the balls to raise taxes to pay for it. If we want to station troops in Europe and Japan, same thing. If taxpayers were given a choice to invade Iraq, station troops in Europe, and raise taxes, or not station troops in Europe and exit Iraq, it is perfectly clear how everyone but the neonuts would vote.

Want a bridge to nowhere in Alaska? Fine. Hike taxes or cut spending elsewhere. There would be some easy choices if Congress just looked at things like a household budget instead of money growing on trees.

Ball-less neocon chickenhawks started this mess, but they do not have the balls to pay for it. Ball-less Democrats keep giving in to Pentagon threats such as the one presented above for fear of being accused of not supporting the troops.

The reality is the only way to support the troops is to bring them home. The way to bring them home is to cut funding for the war and balance the budget. There is no balls in Congress to do either.

Addendum
I was looking for this yesterday but could not find it.
"Joe A" just sent me the link.

City of Vallejo's $100K-plus Earners

During the calendar year 2007, there were 292 City of Vallejo employees who had total gross wages of $100,000 or more. Find out who they were, what departments they worked for and how much they made by searching that database below.

The data was provided by the City of Vallejo's Finance Department.
Click here to enter your own selection criteria.

$200,000 to $299,999



click on chart for sharper image

$100,000 to $199,000



click on chart for sharper image

Comments

[User 130076]

This won't be the last time we will hear of this, many cities are in this mess.

[JJC 1255]

I'd like to see the state of Michigan forced to declare bankruptcy. The combination of legislative democratic bureaucrats intent upon taxing its citizens and businesses to ruination, teacher and labor unions who do everything they can to prevent any right to work mandates from passing congress, and the failing domestic automotive industry, are combining to sink this state faster then AIG's stock price. By forcing the state into bankruptcy, maybe we could finally force well past due changes to take place here.

[fabien_hug]

Crazy and freaky.

[JohnB]

Hear, hear! What a novel concept, people paying for the government projects and wars that they demand! You mean our grandkids shouldn't have to pay for our rebate checks and gas tax roll-back?

Since that doesn't seem likely, I'm advising my kids to aspire to a career in public safety:
* highly respected and therefore "untouchable" profession
* government is a stable industry without cutbacks
* well above-market wages
* very generous benefits
* early retirement
* extremely generous pension and retiree health benefits. There is nothing close in the private sector.

Heck, I'm thinking of a career change myself!

[Farmer448]

So it is time for Cities and states to take a play from the Continental Airlines playbook. Abrogate your labor contracts in Bankruptcy court.

Now if only the citizen could have the same options but the Banks Own congress and limited access to bankruptcy. Maybe Corporations and Cities should also go to credit counseling before declaring bankruptcy like citizens.

[Ernie Montague]

I live in Oakland, not far from Vallejo. That city has been poorly run for decades. Oakland may join her. There are about $750 million in police pension debt here that no one talks about, and a whopping $250 million has apparently disappeared from the city coffers in some amazing financial chicanery that no one will comment on..... I love oakland! ( City council members will say "it is a personnel matter we can not comment on."

[takutourist]

Nice take on where knuckling under to union demands lands any organization--just look at the US auto makers and airlines. Shedlock had my attention until he descended into name calling; stupid war, neonuts, neocon chicken hawks, and the like. His true colors, political agenda, and lack of credibility came shining through: Sad radical liberal blowhard, gutless coward, 4th grade economist.

[Erich Riesenberg]

User191239 is a fine example of what is wrong with America. There was a time when paying for things was considered a conservative concept, now it is referred to as part of the radical liberal agenda.

[Chauncey Gardener]

Amen, Mish!

[billddrummer]

I know a firefighter in Reno who had enough money to build a log home in an exclusive mountain subdivision when he retired.

Another one ran a photography business on his days off, and earned about $45,000 a year from that working part time.

I should have been a firefighter.

[jackooo]

The Police and Fire departments are our heros???

[jackooo]

billddrummer
My uncle was a fire fighter in N.J.
Had his photography lab set up in the basement of the fire house along with his shooting range. In his spare time he built power boats in the basement. In the rest of his spare time he used the backyard of the firehouse to change engines on his cars and work on them.
The rest of his spare time was spent on sleeping and using the great kitchen facilities to cook meals for everyone.
In most cities 1/2 the fire department takes the fire truck to go shopping in the stores for food. I guess they never thought of bringing food in on their own time.
Blame the city administrators. Just like someone said in the comments section earlier. DC got no balls. That is why we need Hillary...... Did I say that?

[notsosmart]

sorry-dumb americans waking up 2 late. no-not unpatriotic.just sad at what happened 2 this once great country.as the rest of the world raises its standard of living ours will decline.an economy based on cheap energy cannot survive.sadly no leaders around 2 help.

[icandoitdon]

there was a time we operated on the principle of balancing the federal budget. there was also a time when americans were expected to make sacrifices to support a war effort. that's the america i grew up in and took pride in.

america is a reflection of it's leadership or lack thereof. if it were a stock it would the most heavily shorted in the investment universe.

[casf1b]

You live by the unions, you die by them also. Look at Chrysler, GM, United Airlines, etc... And our schools the last 40 years have not been getting better but worse.

[unimpressedpragmatist]

If you think the Vallejo is bad, you should take a look at neighboring Contra Costa County. There the Board of Stupes, literally, gave away the store and treasury to the County employees' unions. And, now, they are experiencing a growing deficit of tens of millions of dollars with no practical solutions in sight. Currently, they are, drastically, cutting County services to education, social programs, mental health, and shut-in seniors. This cutback will have little to no effect on the deficit and bankruptcy is looming in a very large county.

How is the electorate responding? In November, they will march in route step to the polls and re-elect the same stupid and corrupt politicians back into office. They will, again, prove that the basis of all government problems lies in the utter cluelessness and disinterest of the voters.

Have you noticed how the voters rail, curse, and foam at the mouth about government incompetence and stupidity and then re-elect the same crowd to office, election after election? Until the American public awakens from its self-imposed somnolence and throws out their corrupt and useless office holders, the problems will, only, get worse. Will this ever happen? Remember what H. L. Mencken said: "Nobody ever went broke underestimating the intelligence of the American public."

[icandoitdon]

"You live by the unions, you die by them also."

there are two sides to this coin. management is ultimately responsible for the success or failure of the enterprises they are charged with running, whether in the private of public sector.

[devassocx]

Vallejo is just the very tip of the oncoming iceberg. And it makes
a great case against muni bond investments...maybe not so safe anymore.

The entire state of California is very indebted along with many of its
cities.

And the sad thing is that it isn't because of revenues. Its because
of terrific overspending by leaders that apparently don't have a
clue what the phrase 'fiscal responsibility' means.

[pockyclips 2020]

How the heck can a city of 120K population have nearly 300 people
on the city payroll making over $100K/year? My thinking is that should be the entire payroll, and it should average $50K.

I saw some news show on last night saying that if our VP Dick Cheney were working in the private sector, he couldn't get health insurance. I understand that the benefits package for government workers are best. Maybe they should pay for their benefits like everyone else does. The guys who tell us to tighten our belts should tighten up too.