San Francisco Bay Area Suburb May Go Bust: Report

Law360, New York (February 22, 2008, 12:00 AM EST) -- A small city in the San Francisco Bay area reportedly may file for Chapter 9 bankruptcy amid rising employee costs and falling tax revenue.

Vallejo, Calif., a city of 120,000 people in Solano County, is suffering from rising police and firefighter salaries and overtime expenses, coupled with falling tax revenue from the weak housing market, according to the San Francisco Chronicle, which first reported on the story Thursday.

The city started the fiscal year with a $4 million budget surplus, but it will end with a...
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