VALLEJO — If Vallejo becomes
one of the first California cities to file for bankruptcy, the negative
effects could be far-reaching, but also may leave the city with a fresh
start, experts said Thursday.
If it takes this route, Vallejo would
still need to keep its doors open and provide municipal services,
though employees may be asked to stay home if there’s nothing in the
coffers to pay them.
"The city would still be there and would still have to provide services
for residents. With the city you can’t just disappear," said Orange
County Supervisor John M.W. Moorlach, an expert on bankruptcy since his
own county took this route in 1994.
Through Chapter 9 protection, a federal bankruptcy judge would sort
through the city’s finances, labor and other contracts, and then work
out a fiscal plan to move forward.
Source – Contra Costa Times
Google – Vallejo Bankruptcy in Google News for the latest information. The council is supposed to vote tonight to ratify a Chapter 9 filing.
Thanks to Michelle Centeno from Target Specialty for sending this story in to CMA Daily News.