Saturday, May 24, 2008

Vallejo Officials Declare Bankruptcy

Some of you may have heard of a city in the Bay Area--Vallejo--that has declared bankruptcy, you may also be wondering why I am writing about this event. Well, I'm from Vallejo, CA. I'm not originally from there (I was raised across the Bay in Marin County) but my permanent home is in Vallejo. I even wear my Vallejo shirt with pride. Anyway, Vallejo has just recently declared bankruptcy, more specifically the Vallejo city council has unanimously voted to declare chapter 9 bankruptcy. Although Vallejo doesn't make much "noise" in the world, it seems as though everyone in the world has their eyes on Vallejo. Newspapers from the San Francisco Chronicle to the New York Times, UK Times to Los Angeles Times are all reporting on this city and the problems it faces going through bankruptcy. What is the world looking at? How does this effect people not from Vallejo? How is this going to effect me (Vallejo Citizen)? and finally, How did the this "City of Opportunity" come to declare bankruptcy?

Vallejo is a medium sized city in the San Francisco Bay Area. Situated next to the Wine Country, near Napa, CA and only 25-30 minutes away from downtown San Francisco and Oakland. At first glance, nobody would have guessed that Vallejo would have gone bankrupt. As the first Bay Area city one sees driving west on Interstate 80 (coming from Sacramento), they are welcomed by the a gorgeous view overlooking the city from hills. The city, however, stretched it self too far when it comes to dealing with tax revenues and labor unions. The main problem that effects Vallejo, is that it is spending more money paying 4 main labor unions than the money it gets from taxes. The four main unions Vallejo is paying are:

1.)Vallejo Police Officers Association (VPOA)
2.)International Association of Firefighters (IAFF)
3.)International Brotherhood of Electrical Workers (IBEW)
4.)Confidential Administrative, Managerial and Professional Association (CAMP)

according to the bankruptcy papers Vallejo has filed, the city projects that in the 2008-2009 fiscal year Vallejo will be paying these four labor unions a total amount of $79.4 Million! Vallejo also projected that for the 2008-2009 fiscal year it will only make $77.9 Million.

Vallejo major Osby Davis, said that it was the only way the city could get itself out of debt.

What happened to my home city may also happen to other cities, not only in the Bay Area but in the United States. A few years ago, the Bay Area was the center of economic development due to the internet and now one if it's cities has gone bankrupt.

Vallejo, CA is the largest city in the state of California to go Bankrupt.

What happened in Vallejo has grabbed the attentions of a lot of people because it isn't the only city facing this problem. Many other cities are facing this problem as well, it is no wonder other countries are also following what happened in Vallejo. We live in a world that thrives on interdependence and if something happens to California (one of the best economies in the world, which propels U.S. to the number one spot in the world) then not only will the U.S. feel the pain but also other countries. Hopefully what happened in Vallejo won't happen in others cities. And I really hope that it isn't the first of many cities to go the way of bankruptcy to solve fiscal problems.

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