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May 3, 2008 1:56 pm US/Pacific

City Manager Urges Vallejo To File For Bankruptcy

VALLEJO (AP) ― Vallejo's city manager is advising the City Council to declare bankruptcy next week to deal with a worsening budget crisis.

City Manager Joseph Tanner made the recommendation Friday after weeks of negotiations with the police and fire unions failed to produce a deal that would solve the city's chronic fiscal problems.

Vallejo faces a projected $16 million budget shortfall in its next fiscal year and will have no money in reserve.

The City Council is expected to vote Tuesday on whether to file for Chapter 9 bankruptcy protection before its fiscal year ends June 30.

If the city of 120,000 declares bankruptcy, it would be the largest California city to do so.

(© 2008 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)

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