If Stockton wants a peek into its future, it might look toward Vallejo, a blue collar town on the northern edge of San Francisco Bay. Five years ago, with the city unable to balance its budget and crushed under a mountain of debt, Vallejo declared bankruptcy. It was just weeks into Osby Davis's first term as mayor. “I spent the first six months attempting not to file bankruptcy, trying to find a way out, finance our way out, negotiate our way out, wait our out. None of that worked,” he says.
The city treasury was empty. And Vallejo simply couldn't afford the rising costs of wages and retirement benefits for city workers. Shortly after bankruptcy, the economy fell into a deep in recession, worsening the city's fiscal ditch. Vallejo slashed and scratched its way toward solvency. It emerged from bankruptcy three years later, but its budget still isn't balanced.
We traveled to Vallejo this month to see what scars remain from the bankruptcy -- and how people have adapted. Vallejo Police Chief Joseph Kreins gave a tour of police headquarters -- a modest two-story building not far from downtown. “This building was in horrific shape. I mean paint peeling off the walls, carpeting that was horrible. And these past several months now, we’ve painted the entire inside of this building, replaced all the carpeting, replaced some flooring. And those seem like little things, but it's a big, big deal when you're talking about your working condition,” he says.
Chief Kreins got here last year, after the city escaped bankruptcy. He was brought in to pick up the pieces. The number of police officers had fallen by nearly half -- from about 155 cops down to 85. Almost anyone, including Chief Kreins, will tell you it left the city in peril. “On our graveyard shifts for example, say after two o’clock in the morning, quite frequently, we’re running with a sergeant and about five or six police officers for a city of 115,000 people and 40 square miles. And those are ridiculously low numbers. I honestly believe that this agency cut further than they probably should have,” he says.
Today Vallejo has no anti-gang unit. It's lost 10 of its 24 dispatchers. The result, says Chief Kreins, is frustrating. “Wherein we might have responded to calls, say within an hour, and I’m talking about non-in-progress calls, today it might take us hours and, or, if we respond at all,” he says.
On the city's waterfront on a recent sunny afternoon, Vallejo's money problems were nowhere to be found. Across the channel from Mare Island -- the former naval shipyard that closed in 1996 -- parents and kids strolled along the sidewalk as fishermen cast their lines into the water.
But city services, and the quality of life, have surely declined since the bankruptcy. The good news? Residents of Vallejo have stepped up. “We were a city; now we’re a community, because so many of us have banded together to do something about it,” says John Allen, program director with the Fighting Back Partnership, a group that helps battle crime.
Allen and two other community leaders stood at the waterfront and reflected on how Vallejo has changed since the bankruptcy. Allen says that after Vallejo fell into bankruptcy, residents here felt targeted by criminals from other cities, with people “coming in here, just feeling that they could get away with stuff -- burglaries, home invasions -- because the police couldn't respond to everything that was going on,” he says.
Since 2008, the number of community crime watch groups has ballooned -- to more than 400. They're all coordinated by an online newspaper called the Vallejo Lamplighter. The website was started by resident Ann Smith during a rash of crime. “The prostitution started about six o’clock with actually carloads of prostitutes driving up, and beginning to phone and text johns. And they would start picking them up in front of my house and all around the corner,” Smith remembers.
The neighborhood watch groups have helped restore a semblance of security to many Vallejo neighborhoods. But Smith says Vallejo's fall into the fiscal abyss has changed the way residents think about local government. “There's been a whole lot more political activism on the part of the people in Vallejo. They’ve been going to City Council meetings, demanding a higher accountability level. I think people are really motivated and interested in turning the town around and making sure we go back to being the kind of community we all envision,” she says.
Allen and Smith say they're hopeful about the future. But Patrice Lewis of the local NAACP says she worries about a lingering stigma -- the kind she felt as a student at Sacramento State. “I would tell people, ‘Oh, I live in the City of Vallejo,’ or ‘I’m from Vallejo,’ and they’d say, ‘Oh the bankrupt city.’ It makes the people and the citizens lose morale overall, you know, because they have this label of being bankrupt, when really, it’s a great city,” says Lewis.
Back in his office, Vallejo Mayor Osby Davis laments the toll bankruptcy has taken here, not just in public safety but in the crumbling condition of city streets -- and he says they just can't keep up. “So they are getting worse by the day, as opposed to better, even though we're putting money into paving our streets,” he says.
The mayor notes that despite the spending cuts, Vallejo's budget is still not in balance. The final piece, he says -- squeezing more concessions from the city's police officers union. Progress in those talks is slow -- and the union president says they've already given back what they were asked -- that further cuts will only make it harder to attract and keep police officers.
For Vallejo, the worst of bankruptcy is now over. But as a fix for fiscal problems, City Manager Dan Keen doesn't recommend it. “Bankruptcy is horribly expensive. It's a morale killer, and its long lasting effects are pretty devastating. So, I would always advise, if there’s some way to avoid it, it's not the best solution,” he says.
The good news, says Keen -- Standard and Poor’s recently upgraded -- just slightly -- one of the city's bond ratings.