How cities like Vallejo can solve fiscal crisis and avoid bankruptcy

March 3, 2008

According to the California Foundation For Fiscal Responsibility (CCFR), Vallejo is not facing a municipal fiscal crisis alone in California, it is just the first city to run out of cash. The root cause is promised increases in wages and benefits for government employees that are not supported by tax revenues.

Looking for answers, Vallejo leaders have chosen to reduce services and increase fees to close an $8 million shortfall. The unions have reluctantly agreed to accept smaller raises than provided by their current contracts and they have agreed to personnel cuts. The city is asking bond holders for more time to pay which only increases future interest costs. Spending on infrastructure and much needed road maintenance will be curtailed indefinitely. CFFR recommends immediate adoption of the following steps toward fiscal responsibility:

1. Stop Illegal Payments for Extra Pension Benefits Related to Services Rendered Years Earlier
2. Adopt a Second Tier Pension Plan for New Hires
3. Reduce Compensated Absences
4. Discontinue Allowing Employees to Purchase Years of Service

Written by admin · Filed Under POLITICS

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One Response to “How cities like Vallejo can solve fiscal crisis and avoid bankruptcy”

UPDATE on March 4th, 2008 7:25 am

http://www.thereporter.com/letters/ci_8391537

The Vacaville Reporter
02/28/2008

LETTER

Leaders benefiting from system they denounce

Reporter Editor:

According to the California Foundation for Fiscal Responsibility,
the current bankruptcy crisis faced by Vallejo is a burgeoning
problem for many other government entities at all levels, from
municipalities all the way up to our federal government. Lucrative
labor contracts that include excessive salaries and health and
retirement benefits are unsustainable, according to this watchdog
group, and a burden placed on the backs of the taxpayers, as stated
by several of Vallejo’s current and former councilmembers.

It has been brought to my attention that at least two of the most
vocal critics demanding Vallejo’s bankruptcy in order to facilitate
new labor negotiations are in fact receiving these excessive
benefits - one as a current federal employee and one as a retired
city employee. These current and former councilmembers are adamant
that Vallejo’s fiscal crisis has been caused by its greedy
employees, especially those in the public safety sector, and has
nothing to do with the city’s previous or current administration’s
failures to increase the revenues from which these salaries are
paid.

Perhaps now is the time for these public figures to stop with their
rhetoric and actually walk the walk, talk the talk, put their money
where their mouth is, etc.

I would suggest that federal employee and Vallejo City Councilwoman
Stephanie Gomes return any raises, including COLAs, she has received
since 2005 on her six-figure salary.

Ms. Gomes should also be made to pay for her own health care if she
is not already doing so, and any retirement benefits she has accrued
should be immediately renegotiated since our federal government is
trillions of dollars in debt through no fault of the president,
Congress or the bureaucrats who run our government. We simply
cannot, as American citizens, allow this abuse of federal taxpayer
dollars and we must rein in the federal employee unions and
bargaining groups who have way too many fingers in the financial
cookie jar.

As for former Councilman Tony Pearsall, perhaps he could return any
COLAs or other raises he has received since 2005 on his generous
retirement package.

He should also be encouraged to give up his lifetime medical
coverage and return any money the city of Vallejo may have paid him
for his excess vacation and sick leave upon his retirement. Since
Vallejo’s current fiscal crisis has been many years in the making,
it seems to me that Mr. Pearsall’s 25-plus years of employment with
the city in the public safety sector and his generous retirement
package from Vallejo are still part of the ongoing problem.

Therefore, I would like to suggest that all labor contracts for all
levels of current government employees, including our politicians,
immediately be renegotiated to a living wage based on public
opinion, and that they purchase their own health care or go without,
as a majority of Americans are already doing.

I also recommend that the retirement and benefit packages for all
levels of government employees be turned over to the Social Security
Administration and the same formula used to establish monthly
benefits for the hardworking private sector retirees be the same one
used for all levels of government retirees.

Certainly Ms. Gomes and Mr. Pearsall should do their part to ease
this unsustainable fiscal crisis caused by greedy government
employees that are financially breaking our national and local
governments. After all, they can’t be part of the solution if
they’re part of the problem.

Kim Tweedy, Vallejo