Vallejo City Council Rejects $10 Million Employee Offer to Keep City From Bankruptcy

For Immediate Release
May 14, 2008

Contact:
Phil Giarrizzo
916-737-9325

Chris Norem
916-502-3994

Vallejo City Council negotiators today rejected $10.6 million in employee-proposed salary reductions that would have kept the city out of bankruptcy.

"We offered to cut our salaries to generate $10 million but the city would rather take the risk of marching blindly into bankruptcy," said Mat Mustard, a detective with the Vallejo police union. "This move will cost Vallejo taxpayers millions of dollars in attorney fees that they shouldn’t have to pay."

To help the city avoid bankruptcy, Vallejo firefighters, police and city employees had proposed a total of $10 million in salary reductions, which included:

• Firefighters and Police Officers:
  • 6.5% salary cuts
  • Foregoing 11% in scheduled salary increases over the next two years
  • Capping future salaries
    
    
• City Employees:
  • Reduce salaries by 3%
  • Foregoing 10% in scheduled salary increases over the next two years
  • Capping future salaries

The City of Vallejo has chosen to pursue bankruptcy despite credible evidence from an independent auditor that they are not on the brink of financial insolvency. A report released Tuesday by the Harvey Rose Accounting firm, one of the most well respected and experienced municipal finance auditors in California, concludes that Vallejo has adequate cash reserves and that a $6 million surplus is feasible if the city accepts the employees’ $10 million offer, institutes better asset and program management practices and pursues new sources of funding.

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