Vallejo Once Again Becomes Front-Page News after Filing Bankruptcy


Just when the people of Vallejo thought that the media firestorm would be gone, cities in California began dropping like flies and filing bankruptcy. Now, Vallejo has become a centerpiece for both a city with dreams and with struggles. The city was a former Navy town prior to filing bankruptcy and at the time it emerged from its bankruptcy filing this city had to cut 33% of its police force and 25% of its fire department. With the real estate market still dwindling, the prices in Vallejo are down almost 70%. With the area being hit hard by foreclosure, it leads to the question, Or will the economy recover soon?

After emerging from the bankruptcy filing, the city is now trying to reinvent themselves as the art capital of the Bay Area. Some believe that once all the yuppies see the value here, the real estate market will turn around in the city will once again rise to its past glory.

Post-bankruptcy has been tough for a Vallejo residents as city services have been drastically cut. This city Council recently passed its first budget since the bankruptcy filing. Included in the new budget was the plan to save 5% of the general fund every year to prevent this from happening again. They also added a new one percent sales tax that is planned to bring in an additional $10 million a year into the general fund. They are hoping to once again be able to hire employees to bolster the police and fire departments.

The downside to all this is the city has already had to dip into their rainy day reserves to pay for an unexpected 4 1/2 million dollar budget deficit. The mayor, Osby Davis, stated, “I feel excited about where we are, although it was difficult, and it required a lot of stress on everybody, I think we’ve done the right thing. And now we are doing all the things to bring our city back.”

What’s interesting is, just as the city exited bankruptcy, a 1992 citizen task force report was exposed concluding that the pensions were unsustainable, the salaries were unsustainable and the healthcare was unsustainable and they recommended the City Council deal with those issues immediately. The report said that Vallejo would have to file for bankruptcy by 2010 if drastic measures were not taken. Eerily, everyone knows that Vallejo was filing bankruptcy back in 2008.

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