City employees file objection to bankruptcy petition
2 former cadets among latest to take jobs at other departments
By JESSICA A. YORK/Times-Herald staff writer
06/28/2008
The city's non-management union employees filed objections to the city's bankruptcy petition Friday, claiming they are helping to protect city taxpayers, services, wages and retiree health care coverage. Vallejo officials filed for Chapter 9 bankruptcy on May 23.
In their challenge, union representatives renewed an offer they say would reduce the city's projected debt by $10 million in exchange for multiple year employee contracts extensions, said union bankruptcy attorney Dean Gloster. City officials estimated they would be nearly $17 million in debt without bankruptcy protection.
As for a second chance at the unions offer, Vallejo bankruptcy attorney Marc Levinson said the city was not interested.
"Let's put it this way," Levinson said. "Had we wanted to accept it, we would have accepted it last time."
U.S. Bankruptcy Court Eastern District Chief Justice Michael McManus set July 23 for a hearing on the bankruptcy challenges. Half days following the 23rd have also tentatively been set aside, attorneys said.
Gloster, who represents the city's fire, police and other non-management employees, said McManus has not yet ruled on whether the city is bankrupt, meaning the city could and should still back out of the proceedings.
A request to dissolve city employee contracts - in most cases involving rolled back salaries and frozen benefits - has been put off until the judge can rule on the city's insolvency.
Levinson said it was one of the few areas in which the judge and attorneys agreed.
The city's bankruptcy attorney has until July 18 to respond to the bankruptcy challenges. Levinson said he would reserve comment on the union and four residents' challenges until then.
"We have to respond to a lot of what they said, which we disagree with violently," Levinson said of the insolvency challenges.
Levinson added that two challenges from single individuals were one page commentary and two were more involved objections.
Gloster said he was not surprised there had been few challenges to the city's complex bankruptcy status. He added that the unions' contracts were receiving the brunt of planned city expenditure cutbacks.
"We're the people in the cross hairs, so we have the most to say about it," Gloster said of the unions.
