Excessive Labor Costs Force Vallejo to Vote for Bankruptcy

The Vallejo city council voted unanimously to file for bankruptcy late Tuesday (May 6). Excessive labor costs are the main factor, although the Bay Area suburb has also been hit by the housing crisis lowering property values and the state grabbing a large share of local tax receipts. Vallejo faces a $16 million deficit in the 2008-2009 fiscal year that begins July 1. The city's representatives tried to bargain with labor unions, but to no avail. A chapter 9 bankruptcy should allow Vallejo to stave off creditors temporarily. City coffers could run dry as early as June 30.


Vallejo lost the Federal dollars flowing in to the naval shipyard at Mare Island. With no replacement economic engine, and a housing downturn, this was inevitable, unions or no. An extreme case of housing not earning its keep.

Response to post #1: But the salaries that were paid police and fire personnel were outrageous, according to several authoritative posts on this website. The abuses were worse than in San Diego. Any municipality should have downside contingency plans. Vallejo apparently didn't. It makes me think a bit of Chula Vista -- spending profligately when the good times roll, not thinking about what might happen when the music stops. Best, Don Bauder

"...The city management then deliberately skimped on the annual contributions, hiding the underfunding from the public..."

San Diego, could have raised taxes to meet its obligations -- it is one of the lowest taxed of major cities in California. refused.

...Labor groups looked the other way...

Well it seems there is plenty of blame to go around and for once I agree whole heartedly with Johnny V/Billy Bob...we need to stop digging the hole deeper.

Don does beating this horse do any good? Sure we shouldn't forget and the electorate will have its FIRST REAL chance to say something on JUNE 3rd. The outcome of primary vote will be very telling.

But what we really need is leadership with a PLAN! Something that causes pain to ALL three parties. In my humble opinion, responsiblity rests will all at this table, City Management, Labor and Taxpayers share equally in this mess and ALL must pitch in to solve it.

The City's municipal assets, preclude it from bankruptcy as most people understand it. Climbing out of this hole will take 20-30 years if all the parties responsible for this mess don't come to table to resolve it. The oncoming inflationary years will make this issue MUCH MORE DIFFICULT to resolve.

When you pay this much money


to HS educated blue collar workers who have no prior work experience, then you end up like Vallejo and San Diego, upside down and underwater financially (San Diego is next in line).

Citywide rank Employee name Department Total wages 1 Joann West Police Department $435,638 2 Ivano G. Paoli Fire Department $350,212 3 Joseph M. Tanner Executive Department $316,688 4 Ronald W. Becker Police Department $299,143 5 James L. Higgins Fire Department $251,094 6 Lamonte K. Morris Fire Department $247,902 7 Russell S. Sherman Fire Department $238,725 8 Richard E. Mackenzie Fire Department $236,701 9 John A. Barbuzano Fire Department $236,467 10 Gordon C. Moncibais Fire Department $233,338 11 Michael Kirchner Fire Department $229,317 12 Gregory R. Falkenthal Fire Department $226,235 13 Alphonzo L. Love Fire Department $223,933 14 Michael Deroque Fire Department $222,755 15 Douglas T. Robertson Fire Department $221,458 16 Kurt P. Henke Fire Department $218,830 17 Raymand R. Dandridge Fire Department $217,920 18 David A. Urrutia Fire Department $215,060 19 Sean Fields Fire Department $214,219 20 William G. Donovan Police Department $213,768 21 Mansfield S. Simmons Fire Department $212,395 22 Herman E. Robinson Police Department $211,556 23 Kevin M. Kelley Police Department $211,382 24 John J. Ha Fire Department $209,547 25 Robert W. Nichelini Police Department $207,294


I keep hearing about how San Diego is one of the lowest taxed cities in California, etc., but I never see any citations for that information. Anybody care to direct me to where I confirm this? Thanks.

The only people who say we are under taxed are the San Diego City employees, so they can get a tax increase-and thereby increase in their pay and gold plated benefits-both already much higher than that in the private sector.

It would make no difference if San Diego were one of the lowest taxed cities in Californa, or not (I do not believe it is personally), because California is the highest taxed state in the union. Anyone living in CA is getting paid less and being charged more in living expenses than any other state in the union.

Poor and middle class taxpayers should not be footing the bill for gold plated Cadillac benefits and pensions for HS educated, blue collar City employees-and I am specificlly talking about the FD and the PD. Not a seretary making $30K per year with no O/T and a retiremnt package that is 1/10th of what the PD/FD receive.

To Just Wondering regarding city assets and BK. No real property City assets would be at risk or sold in a Chapter 9 BK proceeding, it is just not the same for a government as it is for a personal or business BK filing.

Response to post #3: Good points. The problem is that no politician wants to inflict pain on any voter. Sanders said he was going to rein in labor's demands. He did no such thing. His claims of force reduction are simply smoke and mirrors. Bankruptcy IS possible in San Diego. What the City should do is draw up a bankruptcy petition, and call in the leaders of the recalcitrant unions. The City should tell them: in two hours we file this bankruptcy petition. You have that amount of time to agree to cuts. If it doesn't work, file. In bankruptcy proceedings, the judge will hopefully invalidate the corporate welfare contracts, too. Best, Don Bauder

Response to post #4: Yes, those are horripilating numbers. (Horripilating for others; I don't have much hair left.) Thanks for sending them again. Best, Don Bauder

Response to post #5: I've been hearing those figures for years, and don't know where they come from, either. Steve Erie of UCSD's political science department no doubt knows the source. Best, Don Bauder

Response to post #6: I think San Diego is one of the lowest-taxed of the major cities -- not all cities. Best, Don Bauder

Response to post #6: I think San Diego is one of the lowest-taxed of the major cities -- not all cities. Best, Don Bauder

What the City should do is draw up a bankruptcy petition, and call in the leaders of the recalcitrant unions.

This is too simple (and smart) for our mentally and mathematically challenged leaders to figure out.

You understand this simple plan, your readers understand it, I am sure even a trained circus...errr.....elephant! ... could understand figure it.

But, when it comes to our City leaders facing down the unions it becomes incomprehensible rocket science.

Response to post #12: I'm not sure it's incomprehensible. Cops, firefighters, bureaucrats all vote in good numbers. Also, they do things to facilitate corporate welfare. Example: when the Padres wanted the ballpark, the bureaucrats massaged the numbers until they could claim with a straight face that the $300 million giveaway would be economically neutral. They got rewarded for such prestidigitation. Best, Don Bauder

Response to #2: I bet Vallejo's city council fell for the argument "We need big salaries, housing is expensive." Maybe they could do for these officials what some universities try to do for house-poor faculty: build homes, sell them with the restriction that only other faculty can buy.

Response to post #14: Your explanation may be possible. The Bay Area cost of living is horrendous. Yes, some universities subsidize homes for faculty. Could a town do it for police and firefighters? Best, Don Bauder

Try looking at the detailed list of Vallejo's salaries. The one that includes OT pay and one time pesion payouts. It gives a little different picture than the incomplete list JV keepsposting.


Don and Johnny can sit here all day and type themselves silly about how much firefighters and cops should make as compared to the council. How exactly does city council pay relate to police officer or firefighter pay? Answer -- it doesn't. There are citizens of this city walking and talking because of my actions. No price can be put on that. Can the council claim that?

I do suppose that they could be compared to the board of a 'Fortune 600' (sic) company. Johnny whines about the FD and PD requiring only a HS education. Besides the fact that he's wrong, what's the educational requirement for council? Yep... less than ours.

Now let's look at public perception. One city council candidate recently did some independent polling before asking for our endorsement. Smart move. The polls found that we have a 90+% approval rating in San Diego. A Harris poll (http://www.harrisinteractive.com/harris_poll/index.asp?PID=793) showed firefighting topped the "most prestigious" jobs in America. Incidentally, lawyers and journalists were near the bottom -- right above union leaders. Take that for what it's worth.

As it turns out, we're not asking for the world. All we've ever asked for is to be at the median of the ten largest cities in CA. Not the ten top paid, the ten largest. That's not outrageous, considering how short staffed we are and the incredible fires we face down here.

We gave back 6% four years ago. This year we got back most of that. But we're still behind where we were four years ago, especially if you count the reduction in benefits. If you factor in the CPI, we should have gotten 13% in increases in that time, plus the 6% back. Yet we're not whining -- we passed the contract by something like 190 to 10. Still, we've done our share. It's time for others to help out.

Response to post #16: I think the list you sent is just as incriminating. There is runaway overtime. But what's that "other" category? Some make well over $200,000 on "other" alone. Best, Don Bauder

Don, The "other" was one time pension payouts, etc. Cashout of accumulated annual leave, etc. Should employees be allowed to accumulate that much leave? Well, I don't know what the Vallejo policy is. The city of SD pays off 50 cents on the dollar for cashed in leave upon retirement. Meanwhile, they pay time and a half for someone to replace the person on leave. Makes sense to cash it out.

Before you start screaming, Johnny, I've looked at the Vallejo pay scale. It's much, much higher than here in SD. We'd have to give a 20-30% raise to get there.

DavidGUrban, Don't believe Johnny when he claims that city workers are the only ones calling for tax increases. http://onlinecpi.org/downloads/THE%20BOTTOM%20LINE.pdf

San Diego has the lowest tax rate of the largest cities in CA. SD collects about $38 per person per month. The AVERAGE of the ten largest cities in CA is $59.

Is that too low? Well, it's really the choice of the citizens. City employee pay is already lower than other cities. You can't cut much more there. So what's left? Services....

Try looking at the detailed list of Vallejo's salaries. The one that includes OT pay and one time pesion payouts. It gives a little different picture than the incomplete list JV keepsposting.


The list was interesting, one thing that jumps out from the get go is the BASE PAY for the PD and FD, virtually all of them are making over $100K in base pay.

I personally do not think any FF or cop should make over $50K in base pay.

JF, regarding tax rates in CA, San Diego is NOT under taxed, and just because it is below some other city tax systems means nothing-IMHO the OTHER cities are OVER taxed.

If these PD and FD pensions were eliminated then no city taxpayer would have to pay such high taxes.

Response to post #18: The police and fire personnel who went to Vallejo because of low San Diego pay must be having second thoughts. Best, Don Bauder

Response to post #19: I'm not sure SD pay and fringes are as low as they can get. Best, Don Bauder

Response to post #20: I believe police and fire are worth more than $50,000, but not $100,000. The pay should be in the lower range -- say $60,000. Best, Don Bauder

I believe police and fire are worth more than $50,000, but not $100,000. The pay should be in the lower range -- say $60,000

I was actually going to suggest $50K-$60K in base pay, but when you add in current benefits, $60K is too high- in my book anyway.

$50K in cash compensation (not adding in benefits) is still 10-20% above the national median, and it is twice the national median for HS graduates.

When Bob Ottilie said we should raise the pay for the Clowncil he pulled pay records for the PD, and 75% (1300+) made over $75K with O/T. So I think $50K base would work.

Response to post #24: I can't argue with those numbers. Take them to Jerry Sanders and see if he agrees. After all, he said he was going to rein in excessive pay. Best, Don Bauder

Response to post #26: San Diegans have always been hit by a sunshine tax: that is, pay is lower and expenses higher than in comparable U.S. and California cities. This dynamic becomes even more critical when the City is flat broke, as it is now. Best, Don Bauder

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