Vallejo files for bankruptcy
Posted by ecoshift on May 23, 2008
By TERENCE CHEA Associated Press Writer
Article Launched: 05/23/2008 10:56:22 AM PDT
SAN FRANCISCO—The city of Vallejo filed for bankruptcy protection Friday to deal with a ballooning budget deficit caused by soaring employee costs and declining tax revenue.The San Francisco Bay area suburb of about 120,000 residents became the largest California city to declare bankruptcy.
Mayor Osby Davis said the city’s attorneys filed papers seeking Chapter 9 bankruptcy protection in federal court in Sacramento.
“We’ve exhausted all avenues at this point, and this is all we had left,” Davis said. “I had hoped to avoid it all the way up until yesterday. It’s something we can’t avoid. It just doesn’t work. We can’t pay our bills.”