Posted on 07/24/2008 7:45:35 AM PDT by SmithL
SACRAMENTO — Resurrecting negotiations between Vallejo employee unions and city negotiators could be the next step in Vallejo's Chapter 9 bankruptcy saga, attorneys for the city and unions agreed Wednesday.
The attorneys disagreed, however, on what that move would mean for Vallejo's future.
Opening arguments on Vallejo's bankrupt status were heard in U.S. Bankruptcy Court before Chief Justice Michael McManus on Wednesday. McManus must first decide if the city meets the criteria for bankruptcy before considering voiding employee union contracts, set to expire in June 2010.
The city filed for bankruptcy protection May 23, with the unanimous backing of the Vallejo City Council, whose members said the city had no other alternative in light of failed employee contract negotiations.
City bankruptcy attorney Marc Levinson said in court Wednesday afternoon that if McManus threw the case out, the city would be forced into accepting the unions' offers, but would reappear before the court with the same or worsening general fund debt. Meanwhile, the unions would gain a tighter hold over the city's finances.
Union bankruptcy attorney Dean Gloster — representing city firefighters, police officers and other non-management employees — told the court that the unions' last proffered pay cuts, with the caveat of a three-year contract extension, would buy the city time to devise its desired long-term solution out of bankruptcy.
In accepting the negotiated salary cutbacks, the city would receive savings in addition to those agreed upon in a year-end stop-gap plan that was extended into the current year.
Gloster said since the city can avoid a deficit by accepting the unions' deal, it is therefore not insolvent.
Mayor Osby Davis, who attended the first day's hearing, said outside the hearing that he could not judge which way the case was going yet, "because you're only seeing one sentence of the whole chapter." Also attending were council members Stephanie Gomes, Erin Hannigan and Michael Wilson.
The bankruptcy case is scheduled for half-day hearings today and Friday, with further dates set aside in early August.
Assistant Finance Director Susan Mayer testified first Wednesday, following opening arguments by both the city and union attorneys. Attorney Kelly Woodruff, a member of the unions' legal team, tried to show that an approximately $17 million deficit projected in May was actually much smaller.
McManus also set aside a last-minute flurry of court filings by both the city and unions, saying they had come after set deadlines. The 18 filings this week dealt with union objections to various city official declarations and city requests to exclude confidential information disclosed during mediation sessions.
When the Gub’mint teat runs dry.
No, much more can be printed and then the U.S. citizenship can repay it as indirect tax via inflation. How wonderful the collective will get to shoulder the burden of California’s fine leadership.
But no worries, I know Juanita and her family will continue driving around in a $40k SUV to the hospital to get free medical treatment and then go home to check the mail for food stamps and welfare check, to further recline in a chair to watch Univision in an apartment under Section 8 to finally end her difficult day of calling Juan on the other side of town to complain to him how unfair our government is that she can’t start the legal immigration process until 2020.
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