Vallejo avoids bankruptcy just before council decision

The Sacramento Bee reports:

This cash-strapped city reached a tentative agreement with its public safety unions Thursday, just minutes before city leaders were to convene to decide whether to seek bankruptcy protection.

Details on the agreement were not immediately available, but the city had been seeking concessions from police and fire unions. Those departments account for 80 percent of the spending of the city's $80 million general fund expenditures.

For now, Vallejo staves off the embarrassment of becoming the first sizeable city in state history to seek protection under Chapter 9, a rarely used provision of the federal bankruptcy law that allows municipalities and other jurisdictions to keep creditors at bay while trying to recover from economic hard times.

Officials of the Solano County city had said that it would run out of money to pay bills and employees by April if it did not come to terms with the unions or file for bankruptcy protection.

For more on Vallejo's firemen that make $200,000 a year.