Vallejo, California's Bankruptcy
A San Francisco Bankruptcy Attorney discusses
the Fallout of Vallejo's bankruptcy...
Vallejo filed for Chapter 9 bankruptcy in 2008 and, according to the Vallejo Times Herald, the fallout continues to this day.
CIty officials hoped for economic recovery signs in 2009, and acknowledged the financial hardship would continue, not unlike debtors in Northern California who are faced with filing bankruptcy, only their financial harship can end with a Fresh Start when they file bankruptcy. The city of Vallejo is not so lucky.
With guesstimated city deficits projected to increase annually, between $7 million and $12 million annually for the next 5 years, adding to the the financial burden are layoffs planned back in December that will go into effect next month for 6 police employees (officers) in conjunction with some demotions in rank for other employees. This is in addition to a combination of 6 retirees and those that quit serving the police department in 2009. Again, a similar scenario when considering unemployment for San Francisco residents as a factor in bankruptcy filings.
As a municipality that California acquiesced to cover loans that Vallejo was borrowing November voter results caused a renewal of the city's existing telecommunications
utility users tax, worth about $5.2 million, to quote the article.
An over $1 million general fund reserve was established by Interim City
Manager Bob Adams, but its cushion only slight compared to Vellejo's reserve target of 15 percent of the budget.
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