In May 2008, the Vallejo City Council voted to declare bankruptcy, even after city workers offered a package of wage and benefits concessions that would have solved the city’s deficit. The City Council saw bankruptcy as an easy out to break commitments to police officers, firefighters and other city employees. Last week, the US Bankruptcy judge invalidated the collective bargaining agreement between the City of Vallejo and its employees, represented by the IBEW.

With the economic downturn and the precedent set that municipal bankruptcy can be used to break union contracts, we are likely to see a wave of municipal bankruptcies throughout the state. Press reports confirm an increasing number of cities and counties are publicly considering bankruptcy as an option.

SB 88 (DeSaulnier) would impose state oversight over municipal bankruptcies. It would create a fair and open state review process so our unions could review the financial claims and the city could be presented with alternatives to bankruptcy.

In the coming days, SB 88 will be taken up in the Senate Appropriations committee and will then go to the Senate floor. Please act now to urge your Senator to protect workers from the harm caused by municipal bankruptcy, and support SB 88.

rg/tng39521cwa/afl-cio

Dear [ Decision Maker ] ,

Workers in California face bleak economic times. The last thing we need are cities and counties abusing the bankruptcy process as a way to break union contracts. SB 88 will protect workers, while preserving local control.

Municipal bankruptcies are not just bad for city workers, police and firefighters. These bankruptcies result in devastating cuts to seniors, children, and public safety. They undermine the fiscal health of a community for decades, impacting bond ratings, insurance rates, home values, and the business climate.

Municipal bankruptcies also impact the overall state economy and financial status, in addition to increasing reliance on state services. They can also jeopardize receipt of federal money needed to revitalize our economy.

California is one of just 12 states that give local government a blanket authorization to enter into bankruptcy. 22 states deny all access to municipal bankruptcy and another 16 impose conditions and provide oversight.

SB 88 (DeSaulnier) will enact safeguards to protect local communities, while still preserving the right of a municipality to choose bankruptcy if necessary. SB 88 creates an open and transparent pre-bankruptcy review process to ensure municipalities have access to advice and resources to avert unnecessary bankruptcies. This process will reduce costly litigation for both sides and give taxpayers access to accurate information about the city's finances.

For these reasons, I support SB 88 and ask for your AYE vote.

Sincerely,

Campaign Launched:
September 09, 2009