Vallejo, Calif. claws back from bankruptcy

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Despite the state sixteen billion dollar deficit yes billion with a B one California town is making the tough choices and tough cuts.

To claw its way out of bankruptcy.

Marty brown is -- host city councilwoman -- so thank you be -- for us -- tell us what you did.

Your bankruptcy -- on -- way to bankruptcy -- a five year plan tell us how worked out.

What we filed for bankruptcy in May of 2008.

And we spent three half years in bankruptcy.

Renegotiating our labor contracts and negotiating with our creditors we filed a five year plan in bankruptcy court last summer.

And came out of bankruptcy in the fall of 2011.

And since then we've been working hard to continue to rebuild our reserves and rebuild our relationships with our.

Employees and with the citizens and continuing to make the tough choices and tough cuts but also looking for creative and innovative ways to improve the city's situation.

So Marty or councilman is if that -- is they're the only way you were able to renegotiate the labor contracts.

That was because you went into bankruptcy.

Well -- -- having some challenges early on we we tried for about two and a half years before we entered into bankruptcy.

And we were able to come to an agreement so when your.

Bankruptcy attorney tells -- -- 45 days left to pay your bills or you're gonna have to close.

The doors of City Hall you don't have many choices to OK but you can you also did one thing else one other thing I'm sorry you increase the sales tax right.

We actually yes last year the City Council put a 1% sales tax measure on the November ballot.

And that passed by at 52%.

The citizens of -- -- it -- past that sales tax measure and.

We're using some of those funds now to improve the city and -- the city forward so where are you are you in -- review -- -- a war chest she the boot rainy day fund -- idea if -- series and it's important question if the economy turns down.

Again are you okay.

I'm for the time being we have stable revenues and we're not making any more cuts we didn't make any cuts last year in our budget we won't make any more this year.

We are looking at like I said -- stable.

Revenue we actually have exceeded our expectations for our reserve we were trying to get a minimum of 5%.

This first year we've got a seven point 1% reserve.

And were continuing to improve the environment -- it in this city -- Looking for innovative ways to improve our public safety we have a public safety committee that's looking for.

Best practices in the city and throughout the country and -- how we can improve the public safety services that we provide for the citizens of the layout.

Our -- here's the question now if you deal the go ahead and have enough money to pay your bills and all of a sudden there's a surplus -- your -- begun -- bigger.

What's the first thing you do you renegotiate those contracts that you -- did -- negotiated in bankruptcy or you cut that sales tax back off take take it out.

-- -- -- Well I think what we're gonna do is continue to do what we've been doing controlling spending and controlling our increases and and unfunded pension liabilities continue to build our reserves.

The sales tax has a ten year expiration date we -- intend to continue use those funds four.

Improving the city and improving the environment for the citizens of the -- Now we we -- word that the city of Stockton California was having some problems maybe even needing to file some bankruptcy have they contacted you to ask you what you did right.

They may have contacted.

The city manager I I've spoken to -- council member there a couple of months ago.

Just discussing options that that they may have -- situation seems to be.

Considerably different they they had quite a bit larger general fund -- we did.

And so the percentage of the loss in the deficit that they're experiencing isn't quite the same.

As this evil -- -- we've we lost twenty million dollars out of about -- 83 million dollar budget in about eighteen months.

Due to plummeting property taxes and sales tax in 20072008.

So that was a huge -- for us.

So Marty -- is it safe to say -- Greece.

Austerity works just sensible and help.

Well I wish it was that simple it isn't just that austerity works it's that it's got to be a combination of working -- Everybody that's involved from your employees to politicians to the public to make.

The tough choices the -- cuts but also look for great opportunities.

For being innovative and creative in -- way you deliver your services and increasing revenue -- adamantly.

You do you also need more revenue current Marty -- C councilman -- California thank you.

Thank you one couple.

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Vallejo, Calif. claws back from bankruptcy

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