Ethicalego Speaks

Vallejo City Council finally faced the reality of the need to declare bankruptcy. The fault is not with them or this city manager alone, but from a series of obviously bad policy and monetary decisions over the years.

Union officials still claim City of Vallejo is hiding money and that it has enough to avoid bankruptcy. This is a curious claim when one considers the stakes involved. It is unlikely that city officials would take such a chancy move with the national spotlight on them and the stigma attached to bankruptcy. However, anything is possible.

Ironically, this dispute over the amount of money in city coffers should not be the negotiations deal breaker that sends Vallejo into bankruptcy. Instead, it provides the perfect solution for resolving this dispute without a bankruptcy filing.

The union should state publicly why it claims the city is hiding money and how much the city has hidden that it could use to pay its bills without cutting jobs. The city should publicly dispute this claim. Then, each side should commit to an audit and agree to the following conditions from the audit findings.

The city should agree to the following if the audit finds it has hidden money. It will restore personnel cuts. It will grant employee pay increases at levels supported by the found money. It will agree to a one-year extension of the current public safety employees’ contracts. It will pay the audit costs.

Union officials will agree to these conditions if the audit proves them wrong. Union members will take a 25 percent pay decrease or the amount the audit shows the city needs to balance its budget, whichever is greater. It will agree to end the current labor contract effective January 1, 2009. It will pay the audit’s costs.

Both sides recognize that time is critical, because the city will run out of money by June 30, if its claims are true. Therefore, they will agree to these interim conditions. The unions will agree to immediate pay reductions beginning June 1, 2008 that are necessary to balance the budget according to the city’s current claims. The city will repay this money to employees with interest if the audit disproves its claim.

This is the Kenneth Brooks solution for the problem. It is simple and it is fair. Making this process public prevents disingenuous claims from either side that inflame public emotions.
The requirement for unions to state what amount of money they claim the city is hiding is crucial for making this solution work. Otherwise, union officials can make ambiguous claims about city assets that are impossible to refute. For example, unions could identify the value of land or other assets the city could sell to generate money. However, it would be foolhardy for City of Vallejo or any corporations to rely on the potential income from land sales or any onetime sources of income to support continuing budget expenses like employee salaries, health, and retirement benefits.

Likewise, the likelihood of voters approving a tax to balance the budget should not count as claimed income for the city. This would be uncertain income at best, because there is no way to guarantee this income short of a tax referendum. Therefore, no ambiguous sources of income should count as hidden city money.

In public statements, the unions made the issue of hidden city money crucial to settling this dispute. Therefore, I cannot think of any reasons why they would not accept these conditions for a solution. City officials also firmly deny the claim of hidden money, so they have no reason to reject this solution.

I am not an attorney, so I expect both sides’ attorneys will want to tweak the language of the conditions for this solution. Nevertheless, they should not use disputes over language to kill this proposed solution. They will not do this if they are sincere about their claims.
City employees have family and money concerns, as do Vallejo residents and city officials. Nobody wins from the current contentious approach to this budget issue or from Vallejo's bankruptcy. This solution offers a fair and least disruptive approach to settling this issue. The figures from an audit by a neutral corporation will not lie or distort matters.

I wrote this article Thursday, May 8, 2008 and I immediately sent e-mail or fax copies to the City Manager, the mayor, council members and firefighters union rather than wait for the newspaper to publish it Monday. Vallejo residents and union members who agree with this solution should ask city and union officials why they do not use it or some version of it to settle this issue.