San Francisco suburb Vallejo files for bankruptcy
SAN FRANCISCO (Reuters) - The city of Vallejo, California, filed for bankruptcy on Friday, a move signaled by its city council earlier this month as it struggles to avoid running out of money amid steep city personnel costs and sliding revenues from a housing slump.

The Chapter 9 filing by Vallejo, a blue-collar, former Navy town in the San Francisco Bay Area, in U.S. bankruptcy court in Sacramento had been expected since May 6, when the city council approved the drastic move.

"It is a sad day for the city and for me personally. It is not something I ever wanted to do," Vallejo Mayor Osby Davis told Reuters. "We did everything we could do to find other solutions and other alternatives, but we were not able to."

Vallejo, with more than 100,000 residents, is the first sizable city in California to file for bankruptcy. Chapter 9 is a bankruptcy filing for municipalities.

"Obviously, it has some far reaching ramifications as to our credit worthiness and being able to get into the credit," the mayor said.

Although many California towns are coping with shrinking tax revenue and some of the highest home foreclosure rates in the country, they are not likely to follow Vallejo's suit.

Moody's Investors Service said this month that Vallejo's expected bankruptcy filing would be a "unique case."

California's last governmental bankruptcy filing was in 1994 when Orange County's finances ran aground on soured investments linked to derivatives. Continued...

The city consul is fighting against the city's unions. Perhaps brought on by jewish encouragement of the unions.
Could part of the problem be that well over 70 percent of the city is non-White and possibly renters?:rolleyes:
http://www.reuters.com/article/bondsNews/idUSN2352179020080523
AP Story Here