Vallejo was once a trail blazer for bankruptcy, but now it can be used as a case study in austerity and re-invention in the wake of near-insolvency.

It’s a lesson that could prove useful in California, where as many as 100 cities are looking at possible bankruptcy, according to a Sacramento State professor interviewed for this Washington Post article.

Much of its newfound success was bred out of desperation – where the city, its officials, and its volunteers had to come up with creative ways to retake the city streets from prostitutes and criminals. They recruited citizens into citizen watch groups – with more than 350 groups now operating in the city. The city also invested in technology that could increase efficiency. One such program installed $500,00 worth of cameras around the city so police could monitor a greater area with fewer officers.

This was all aided by settlements reached in bankruptcy, where Vallejo worked out a deal to pay five cents on the dollar for bonds and other debt.

And the city brought the public into the budgeting process. In a deal that would bring an extra $9.5 million per year in revenue, residents would get a say in how the city should spend money.

From the Washington Post:

The first couple of years were ugly. After this working-class port city became the largest in America to declare bankruptcy in 2008, crime and prostitution surged as the police force was thinned by 40 percent. Firehouses were shuttered, and funding for libraries and senior centers was slashed. Foreclosures multiplied and home prices plummeted.

But then this city of 116,000 began to reinvent itself. It started using technology to fill personnel gaps, rallying residents to volunteer to provide public services and offering local voters the chance to decide how money would be spent — in return for an increase in the sales tax. For the first time in five years, the city expects to have enough money to do such things as fill potholes, clear weeds, trim trees and repair tennis courts.

Read the full article here.