Tag Archives: Vallejo

Vallejo Declares Bankruptcy

After months of wrangling and negotiating the city of Vallejo has voted to declare bankruptcy. And to hear the local media tell it, like the San Francisco Chronicle, it is the fault of public workers, not poor political leadership:

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 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.

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.

What is not said here, or anywhere in the article, is the reason for that public safety spending. Vallejo’s police and fire services are understaffed – as are many agencies in California, in a little-known but extremely important and widespread phenomenon. City leaders have been loath to hire new workers, but they have also needed the public safety services – so the workers that are on the payroll have been working overtime. And overtime pay is usually always higher than regular pay.

Vallejo, like many California cities, wanted to maintain a high services and low tax environment, and has found this is not possible, especially when an artificially-created bubble bursts. Instead of accepting responsibility and seeking new revenues to balance the city’s books without endangering the public, city leaders chose to blame the public workers for the problems and declare bankruptcy instead of avoiding the underlying issues.

To be fair, Vallejo is not in complete control of its own destiny. Decades of state and federal budget cuts, made to pay for tax cuts for the wealthy, have had a trickle-down effect of eviscerating services and leaving cities more and more financially exposed as state and federal aid has begun to dry up. It’s not exactly as if Bush and Arnold have directly told Vallejo to drop dead but through their inaction in the face of widening government financial crisis, they have achieved the same result.

Vallejo IS the tip of the iceberg, as many cities face similar problems. Some have done the right thing and sought new revenues, like Salinas, and avoided destructive service cuts. Others are following Vallejo down the path of blaming public workers. Without state and federal solutions, this scene may well replay itself again and again across the state in the coming years.

Bankruptcy! Vallejo is Just the First

The city of Vallejo has been flirting with bankruptcy for for a few months now, but it looks like it will probably happen soon.  While the Mayor and other leaders continue to point the finger at public safety workers, the city looks set to pass its own deadline this week for some other resolution. The Chronicle:

Vallejo will inch closer to financial ruin Tuesday when the City Council lets pass its do-or-die date to avert bankruptcy.

City staff members have been unable to come up with a detailed, long-term financial plan because negotiations with the police and fire unions are still ongoing. The city is asking for steep concessions from the unions, whose members are among the highest paid in the Bay Area and whose salaries comprise about 74 percent of the city’s budget.

“We had hoped to have an agreement by April 22 to give to the council,” said Mayor Osby Davis, who has sat in on the negotiations. “But I’m optimistic. There’s always room for a resolution if people are willing to give and take.”

Davis, if you’ll remember, is the Mayor who lost the election, and then won the election on a recount.  In the end, I’m not sure there’s a winner at all here.  The unions allege that there’s some accounting tricks being used, while the City contends that the salaries are just killing them. The salaries are quite high due to mandatory overtime required by the city’s low staffing.

The Mayor and others want a “long-term solution”, but one will be increasingly difficult to find for Vallejo and cities across California as the budget continues to bleed. There is no solution – none at all – until California’s leaders and the Yacht Party obstructionists choose to look at the budget sheets from towns and cities across the state. Small, large, whatever. They are all feeling the pain of the last 30 years. Prop 13, the VLF cuts, everything is costing the cities money at a time when more and more is expected of them.

We can dally no longer. The governor needs to step up and admit that he was wrong on the VLF. Vallejo is just the first large city to tumble towards bankruptcy. It will certainly not be the last.

Town’s Going Bankrupt? Blame the Workers!

Much attention has been focused on the lovely town (I’m serious!) of Vallejo as it faces bankruptcy. In a harbinger of things to come for many California cities and counties, Vallejo’s general fund has been hit hard by the housing crash, leaving the city strapped for cash.

A city contemplating bankruptcy has many options. So it’s sad to see Vallejo – and smaller towns like Pacific Grove – blaming workers for their problems. In doing so, they repeat the same destructive policy espoused by Orange County Republicans – choosing to blame public employees and their unions for problems instead of supporting higher taxes, even at the cost of catastrophic disaster.

The first article on the Vallejo cash crunch in the Chronicle set up the dynamic, as city officials blamed workers for the problem:

[Councilwoman Stephanie] Gomes and others have blamed much of the city’s financial woes on police and fire contracts, which she says comprise 80 percent of the city’s $80 million budget.

The starting salary for a Vallejo firefighter is about $70,000 a year, among the highest in the state. Ten firefighters earned more than $200,000 each last year, including overtime, city officials said.

“Of course we value our police and firefighters and the risks they take, but their salaries are simply too high,” Gomes said. “They can afford to live in Marin and Napa, and it’s the very hard-working, blue-collar residents of Vallejo who are bearing the repercussions. It’s unfair.”

Ah, those greedy firefighters. How dare they ask for a middle-class income? What gives them the idea that they can extort such wages?

Firefighters say their earnings are high because the department is so short-staffed they’re forced to work huge amounts of overtime.

Since 2001, 30 firefighters have retired or left the department, and only three have been hired, said Vallejo fire Capt. Jon Riley, vice president of Fire Fighters Union Local 1186. And after rumors of bankruptcy began circulating, 14 more retired, fearing that their benefits and salaries would be cut, he said.

“We’re having to work an extraordinary amount of overtime,” he said. “We make great salaries, but if you’re not able to see your family, what good is it?”

Firefighters typically work 48-hour shifts with four days off between shifts. Many Vallejo firefighters are now forced to work 96-hour shifts with two days off, he said. Sleep deprivation, divorce and child-care complications are common, he said.

“I’d say morale has hit rock bottom,” he said. “But we’re still committed to providing the highest level of service to the citizens of Vallejo.”

Oh. They mean to tell us that firefighting is hard, grueling work, and that they should get fairly compensated for protecting the community?

To most of us, the firefighters’ stand is common sense. Fire protection is something you just don’t skimp on – unless you’re Orange County conservatives (more on them in a moment). And it’s not as if the firefighters are unwilling to help:

Firefighter union President Kurt Hanke told the council that the union reached an agreement late last week with city negotiators for wage cuts that would have reduced Vallejo’s deficit to zero. But he said Tanner on Monday vetoed the deal….Leaders of public safety unions say the salaries of police officers and firefighters are high because they must work large amounts of overtime because of staff shortages. The unions have offered to cut the employees’ pay if more officers and firefighters are hired.

Instead Vallejo’s leaders prefer to play hardball and blame public safety employees for the city’s crisis. And unsurprisingly, nobody in Vallejo seems to be discussing a tax increase to stave off these crippling cuts – which will not only compromise public safety, but further damage the city’s economy. Firing workers and cutting everyone else’s pay is not exactly going to help Vallejo’s restaurants and small businesses weather the storm.

Lest we think this is just a Vallejo problem, the blaming of public workers for city problems is something found statewide – a last-ditch, extremist strategy to avoid a tax increase. Here on the Monterey Peninsula, the small town of Pacific Grove has been facing a $2 million budget deficit, and recently responded by enacting drastic cuts to city services, including fire and police. Last fall the city proposed a modest tax hike to close the shortfall – which prompted users of a local discussion forum to denounce the workers in some rather absurd terms:

Why does our small town have so many firemen? I always see them parked somewhere or doing drills by the high school but not much else. Is there a reasonable explanation that I am not aware of?

How many fires does this tiny town have every year? How many tall buildings?

This town is so overstaffed by Bay Area standards (or other responsible standards) that it is truly disgusting. At least some layoffs are in the works, but the point is, PG should ALWAYS be run lean. There is not enought here to justify so many salaries.

It would not hurt to recruit people who actually have a real track record of successful leadership and money management. If you keep hiring inbred failures, you are going to continue to see a lot of red on the balance sheets.

That’s what I mean about our many firemen. I think they need to cut some of them loose. It’s silly when you go to the PG website and look at all the names for the fire dept. They are about as busy as the Maytag repairman!

In fact, a study of fire protection on the Peninsula showed that the city’s fire department is actually understaffed, but that wasn’t enough to convince folks to approve the tax – instead it was easier to blame supposedly lazy, greedy workers for the city’s crisis.

Where might all this lead? The cautionary tale is that of Orange County, where conservatives and Republicans high-fived each other in 2005 when they defeated a measure to shift already collected tax monies to help produce more fire coverage. As I explained it back in October:

Orange County Republicans campaigned hard against Measure D, a 2005 ballot proposal that would have diverted $80 million in surplus public safety funds from Proposition 172 to help properly staff Orange County fire departments. The failure of Measure D leads directly to the OCFA’s inability to quickly contain the Santiago Fire when it broke out Sunday evening….

To Steven Greenhut and the Register editorial board, the firefighters’ union is merely a greedy parasite on the public, using bureaucratic rules to claim they need more fire crews in a cynical ploy to line their own pockets.

Such is the natural outcome of an obsession with low taxes. In order to defend the untenable position that taxes must never go up no matter the need or the situation, anti-taxers have to lash out at anyone or anything that might undermine their position. If that includes public safety workers, so be it. If that means cutting back police and fire protection, so be it. To the anti-tax zealots, every man is an island unto himself.

Orange County’s experience last fall suggested otherwise. Let’s hope that Vallejo, Pacific Grove, and the rest of California learns the lesson and, like Salinas, looks to new revenue sources to provide for essential services.