Star Tribune Sat, 24 May 2008 12:04:09 GMT
City of Vallejo, Calif., seeks bankruptcy protection to deal with ballooning budget deficit
The city of Vallejo filed for bankruptcy protection Friday to deal with a ballooning budget deficit caused by soaring employee costs and declining tax revenue. The San Francisco Bay area suburb of about 120,000 residents became the largest California city to seek bankruptcy protection. Mayor Osby Davis said the city's attorneys filed papers seeking Chapter 9 bankruptcy protection in federal court in Sacramento. "We've exhausted all avenues at this point, and this is all we had left," Davis said. "I had hoped to avoid it all the way up until yesterday. It's something we can't avoid ... We can't pay our bills."
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