VALLEJO, Calif. (AP) — A last-minute deal between city leaders and
labor unions could allow this cash-strapped Bay Area suburb to avoid
becoming the first city in the state to declare bankruptcy over a
But Mayor Osby Davis said the deal would balance the budget for its
current fiscal year and "provide a framework for solving the long-term
"It's not the answer to our financial problems," said
Davis, who took office in December. "The problems we face are
long-standing. They're not going to be solved overnight."
It is collecting less tax revenue than projected as retail sales and property values decline amid an economic downturn.
the same time, Vallejo faces escalating costs for its police and
firefighters, whose pay and benefits make up nearly 80 percent of its
general fund budget.