Vallejo City Council OKs short-term budget fix

The San Francisco Chronicle reports:

Vallejo's City Council voted early today to approve a deal with its police and fire unions to keep the cash-strapped city solvent at least temporarily.

The agreement, which was struck hours before the council was to vote last week on declaring bankruptcy, would give the city about six weeks to come up with a longer-term solution to its financial morass.

Members of the police and fire unions will vote on the agreement this week. The council approved the deal on a 5-2 vote late Monday.

The deal immediately slashes police and fire salaries by 6.5 percent and cancels a 1.5 percent raise that union members have been owed since July. It also closes two firehouses and defers half the $3.5 million buyout packages owed to the 21 police officers and firefighters who have retired since the city's dire financial situation hit the news last month.

The deal would save Vallejo about $6 million, enough for the city to pay its bills through the fiscal year that ends June 30. The city needs to have a long-term financial plan ready by April 22 to meet its deadlines to approve a balanced budget for the next fiscal year.

To meet that goal, the unions and city staff will head back to the bargaining table almost immediately, said Vallejo fire Capt. Jon Riley, vice president of the union.

"This gives us some breathing room to avoid bankruptcy and come up with a long-term solution," Riley said. "I'm very confident something can be worked out."

Support for the deal is far from unanimous. Some Vallejo residents and elected officials say it is a temporary fix that will worsen the city's financial troubles because it leaves the city with less bargaining power in future negotiations.

"If one more person retires or oil prices go up, it pushes us over the edge," said City Councilwoman Stephanie Gomes. "It's so tenuous, it's like we're on a tightrope. If there's even one sneeze, we fall."