How dumb was I when I said they avoided bankruptcy in my recent article – knowing what I know about how institutions are run these days, I should have looked further.
One of our readers was kind enough to update me on the fact that Vallejo, CA DID file for chapter 9 bankruptcy protection. Here is some reading on the subject:
Bankrutpcy Vote by City Council on May 7 -Mercury News
Bankruptcy Court Arguments Heard – July 23, 2007-CBS5
3rd Day of Deliberations -July 25 – Contra Costa Times
City Employees Filed for Early Retirement When Bankruptcy Loomed Feb 17, 2008-Oakland Tribune
Study these articles well. This should play out over and over in the US as cities try to wrest themselves from union contracts as revenues plummet. Since a typical politician won’t stand up to unions, he will wait until it’s too late and just file bankruptcy. Maybe it could be prevented if he had a spine, but perhaps it can’t be – perhaps it must come to this…
I’d like to thank “Captain” Chris for bringing this update to my attention and also to longtime reader Berne who suggested I do a piece on municipal financial woes – thanks guys!
Chris Grande
7.31.08
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