In fact, in Vallejo, the city council had to do more than simply negotiate the turbulent waters of bankruptcy, they had to re-learn how to run a city. For years, Vallejo benefitted from a steady, and plentiful, stream of revenues from the federal government. But when a military installation closed, it left the city without its major source of funds, and facing the stark reality that years of bad decisions had left the city with very little to work with.
In fact, some admit that it wasn’t until after the federal government left that they started thinking about business development programs. Further complicating the situation was the load of unfunded pensions and benefits that had been approved with little thought of the long term costs.
Now, three years after the bankruptcy proceedings started, the city is starting to re-emerge, but the process was anything but easy.
From the Oakland Tribune:
What is it like for a city to go through bankruptcy?
Contra Costa Taxpayers Association members got an insider’s view from Vallejo City Councilwoman Stephanie Gomes at the group’s June 24 meeting.
Gomes’ short answer was that bankruptcy is not a magic pill for cities struggling to balance their budgets in the wake of falling tax revenues and rising employee pay and benefit costs. But there is much more in the details.
Read the full article here.