Feb 22, 2008 6:31 pm US/Pacific
Facing $6M Shortfall, Vallejo Considers Bankruptcy
VALLEJO (CBS 5 / AP / BCN) ―
Residents packed a town hall meeting Thursday night to discuss the city's struggles with a growing deficit that has it on the brink of declaring bankruptcy.
City officials estimate there is a $10 million general fund operating deficit for fiscal year 2007-2008 and there will be a $5.9 million negative fund balance June 30. The projected 2008-2009 deficit is $13.8 million and the city will be insolvent in late April, officials say.
The deficits have been blamed on declining sales tax revenue and the cost of public safety employee salaries and benefits that critics claim consume 80 percent of the budget.
"It's pretty dire," said City Councilwoman Joanne Schivley.
The City Council is scheduled to address the crisis at its meeting on Tuesday, and are considering a number of options to avoid a bankruptcy filing including layoffs, cutting funding to community groups, reducing maintenance and supplies at the Vallejo Naval and History Museum, a community pool and public library.
Meanwhile, Vallejo's city budget deficit is causing changes to the operations of the Police Department.
Starting March 1, all non-emergency calls to the department will be routed to an automated service and the lobby of the Police Department will close at 5 p.m. instead of 6:30 p.m. Monday through Friday except Tuesday.
William Powell, the Police Department's support services manager, said the department now has 21 police dispatchers who are now prohibited from working overtime. Nine volunteers have been trained to handle non-emergency calls and help citizens file property crimes reports that can also be filed online. Callers will still speak to a dispatcher when they call 911, Powell said.
In 2006, the dispatchers handled 38,335 911 calls and 198,567 business calls. In 2005 there were 38,039 911 calls and 202,339 business calls.
"The business calls are killing us," Powell said.
Citizens may call (707) 649-3418 directly to leave messages, Powell said.
Vallejo would join a small number of municipalities to declare bankruptcy should officials decide it's their only option.
Orange County declared bankruptcy in the 1990s after then-Treasurer Robert L. Citron borrowed hundreds of millions of dollars while speculating in high-risk securities investments that depended on low interest rates. The county lost $1.64 billion.
Desert Hot Springs also filed for bankruptcy in 2001.
(© CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed. The Associated Press and Bay City News contributed to this report.)
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