Vallejo CA pulls the plug: Calpers holding the bag on 219 million in unfunded pension benfits

Well this is the shot that will be heard round the world. The question really is what kind of precedent will this set for other cities in the US and in Calif. to deal with the massive public employee pension problem. Like most issues the government deals with I smell a bailout. Taxpayers better grab their wallets and run. I think the time has come for the voters to become the city managers and to hold elections on the "pension giveaways". God knows the politicians cannot be trusted anymore with the public employee unions.


City of Vallejo, California files for bankruptcy
Fri May 23, 2008 5:03pm EDT
http://www.reuters.com/article/domesticNews/idUSN2352179020080523

By Adam Tanner

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.

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

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

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

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

LEVERAGE WITH EMPLOYEES?

According to the filing signed by City Manager Joseph Tanner, the city has 1,000 to 5,000 creditors, estimated assets of half a billion to $1 billion and liabilities of $100 million to $500 million. Tanner had previously said that the city's general fund would be depleted at the end of June.

Vallejo's main financial difficulty is the high spending on public safety employees, whose costs eat up three-quarters of the city's general fund.

Although the city reached a deal with employees in February for pay cuts and other short-term measures to keep paying bills, the city council said earlier this month that filing for bankruptcy might give it more leverage in talks with workers on wages and benefits.

A document accompanying the filing said that the California Public Employees Retirement System, the nation's largest pension fund, known as Calpers, held the largest unsecured claim, with $135.4 million in retiree health benefits, and another $83.9 million in unfunded pension plan benefits.

Wells Fargo Bank was a bond trustee with $27.3 million in unsecured claims, and the Union Bank of California with $26.2 million in unsecured claims, the document said.

(Reporting by Adam Tanner, writing by Mary Milliken; editing by Leslie Adler)

Lakewood Accountability Action Group™ LAAG | www.LAAG.us | Lakewood, CA
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Buena Park restricts 'safe and sane' fireworks

It is a small concession but we would like to see a lot more of these types of "use" restrictions especially given the police costs "safe and sane" fireworks force cities to incur. And with many cities facing a "Vallejo dilemma" any budget cost that can be cut is welcomed, especially in the public safety arena as those costs are so inflated to begin with (for what you really get in terms of effectiveness).

Tuesday, May 13, 2008
Buena Park restricts 'safe and sane' fireworks
Residents will no longer get to light up on busy La Palma Avenue.
By SERENA MARIA DANIELS
THE ORANGE COUNTY REGISTER
http://www.ocregister.com/articles/fireworks-park-buena-2041950-year-city#

BUENA PARK – Residents wanting to light up fireworks this Fourth of July will face more restrictions after the city banned them on a strip of La Palma Avenue that's usually overrun with celebrants.

La Palma, between Western Avenue and El Monte Drive, has for years been home to as many as 3,000 people, all in the street, blocking traffic to get a spot to see the fireworks show at Knott's Berry Farm.

While they're waiting, many light up their own legal fireworks on the street, blocking traffic and creating safety hazards, said Buena Park police Sgt. William Kohanek.

"Congestion on this major thoroughfare is just overwhelming," Kohanek said.

Fireworks can be safely shot off on the city's other public streets.

City Councilmen Don McCay, Steve Berry and Mayor Jim Dow approved the restriction at Tuesday evening's meeting. Council members Patsy Marshall and Art Brown were not present.

Buena Park is one of five cities that allow so-called safe and sane fireworks; so do Santa Ana, Costa Mesa, Garden Grove and Stanton.

Last year, Buena Park banned Piccolo Pete fireworks, in part because of noise complaints.

Fines have been imposed on people caught with illegal fireworks in Garden Grove.

Santa Ana officials, on the other hand, have tentatively agreed to extend operating hours for firework vendors. Stands would open an hour earlier – at 9 a.m. on July 2, 3 and 4. Santa Ana council members are expected to finalize the extended hours next month.

Buena Park's restriction comes a month after an Orange County grand jury report called for a three-year moratorium against fireworks in the five cities to allow time to find ways of improving public safety. The report says that county taxpayers paid about $188,000 last year for extra policing and fire services during the Fourth of July season.

But the report holds no legal authority.

Last year, Buena Park police responded to 240 firework-related calls on July 1-4.

Contact the writer: 714-704-3795 or sdaniels@ocregister.com

Lakewood Accountability Action Group™ LAAG | www.LAAG.us | Lakewood, CA
A California Non Profit Association | Demanding action and accountability from local government™

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In California, unions have the upper hand and will eventually take over

This pretty much sums up the current situation with public unions and how they are contrasted with private unions. Again we are reaching a tipping point as the Vallejo potential bankruptcy all but too painfully points out. this is all about greed and control and "we want what they have" mentality. It has to come to an end sooner or later. The Housing crisis may bring it to a head quicker due to the shortfall in property tax revenue which will be hitting home soon. This is a showdown between the taxpayers and the "ruling elite"...the public employee unions, the spinless political hacks we let get elected and their pork barrel dog and pony show.

The trouble with unions
By MICHAEL HALEY
Napa Valley Register
http://www.napavalleyregister.com/articles/2008/05/18/opinion/michael_haley/doc482b723f46256162341736.txt

When I read the recent Register article about the service workers unions approaching the City Council for support in unionizing new hotel workers, all I could think was here comes trouble. I hope the City Council does not help them.

I think most people believe that unions counterbalance management in a sort of equal relationship, one side representing one point of view, the other another, and that it all balances out equally assuring fairness. But it is not an equal relationship, the unions soon grow to have more power than management and can control the entire situation to the point that the employer becomes harmed, even bankrupt.

Let me first of all say that often times unions have done a lot of good, so I am not necessarily opposed to them in total.

But there are two main reasons for unions having an unfair advantage that it is important for people to understand. This happens in both private unions and even more so in government.

The first reason is that labor unions all link together as a large unit, while the employers, be they government or private, have to act independently by law. If you can control the position of labor across a whole field of employment, say all the firefighters in the state acting together, then each individual local government is far out manned.

The second is that they are not a feature of a free marketplace, but are an invention of the government to control a free market place. Unions only exist because government laws and regulations mandate them. A marketplace, on the other hand, would exist whether the government regulated it or not.

What that means is that by taking away some of the freedom of employers and employees to freely associate on whatever terms they prefer, you lose economic efficiency. On an economic basis, there is just no way around it.

Vallejo's safety unions are a good example of how that harms us.

The salaries they have negotiated are a shocker they are so high, yet they have refused to negotiate and caused the city to go into bankruptcy. And yet they still won‚t negotiate, they have no incentive to do so. And there is little that the city can do about it. In a non-union environment, Vallejo would have cut salaries, benefits, rearranged work schedules and a number of other things that would have saved the city through tough times. The same thing any household would do when budgets were tight.

The lesson? Union contracts cause the management of a company or government to lose control of the very thing they are supposed to run. And the unions have no responsibility to manage it themselves, even though they control it.

Of course, the automotive companies are yet another example where union demands and economically unfeasible contracts could not be gotten out of and they have bankrupted the entire auto industry in America. And which automaker has risen to the top and avoided all this? Toyota, which does not have unions.

Because unions are a government regulatory creation, they are slow to respond to changing economic circumstances, if at all. The only real control over them is whatever the employer can exert.

An employer, be that the government or private, has an organic limit on its behavior. A company has to please its customers or it will go out of business. The government is limited by what it can extract from taxpayers.

But the unions have no organic limit built into their economic system. The company or government can go bust and the unions can remain unaffected. We have seen that with both Vallejo and the auto industry. They are only limited by moral suasion and whatever the management can convince them to do.

The auto industry could have chosen to keep their prices high, but if customers won't buy that is it, they are done. On the other hand, if General Motors had just decided not to pay their union workers as much, they would have been hauled into court and fined.

This is an incredibly important point for the public to understand about unions, because this is not about whether anyone or I likes them or not, it is about the way economic reality functions. There is an organic limit built into what a government or company can do, but there is no limit built into what a union can do. Therein lies the problem.

If you doubt this, all you have to do is look at what has happened. The auto industry, Vallejo, state worker pension and medical benefit unfunded liabilities, the fact that the city of Napa is mandated to pay a salary rate based on bankrupt Vallejo salaries even when it makes no sense, these are all things that no one would do unless mandated by law.

The fact is that the way the system is structured, especially in California, unions automatically have the upper hand and they eventually will take over. This is pretty much what has already happened to the California state legislature. Lets not encourage this in Napa.


Lakewood Accountability Action Group™ LAAG | www.LAAG.us | Lakewood, CA
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Executive order regarding fireworks

Oh yes by all means get those illegal fireworks...the safe and sane ones could never cause fires, especially when modified...heaven forbid we eliminated person fireworks now that we are headed into a long term drought...

05/09/2008
EXECUTIVE ORDER S-03-08
by the Governor of the State of California
http://gov.ca.gov/index.php?/executive-order/9546/

WHEREAS last year California experienced devastating wildfires that destroyed lives, property, businesses, and the environment and resulted in the largest deployment of firefighting resources and the highest number of evacuations in state history; and

WHEREAS this year, California once again finds itself facing an imminent threat of devastating wildfires and imminent peril to people and property; and

WHEREAS the number of dead, dying and diseased trees continues to increase as a result of bark beetle infestation in Southern California, providing a readily available fuel load which creates an imminent threat of catastrophic fires; and....

[snip]

NOW, THEREFORE, I, Arnold Schwarzenegger, Governor of the State of California, in accordance with the authority vested in me by the Constitution and statutes of the State of California, do hereby issue the following orders to become effective immediately:

IT IS HEREBY ORDERED that the California Department of Forestry and Fire Protection (CAL FIRE) shall secure and deploy additional resources that are necessary, as determined by the Director, to protect the safety of persons and property from wildfires during periods of elevated fire risk as follows:

[snip]

IT IS FURTHER ORDERED that CAL FIRE develop and implement aggressive interdiction plans for the enforcement of laws regarding arson and illegal and dangerous fireworks, focusing on high traffic, high impact, high volume distribution and transportation points which may be the sources for the ignition of wildland fires in California.

[snip]

Lakewood Accountability Action Group™ LAAG | www.LAAG.us | Lakewood, CA
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Orange County Grand Jury Report on "safe and sane" Fireworks

The OC Grand Jury report calls the permitting process for fireworks sales "flawed" and finds that taxpayers are required to foot the bill – last year about $188,000 – for extra police and fire services during the Fourth of July season.

Grand Jury report said police and fire officials said that they are often overwhelmed by fireworks-related calls for service during the Fourth of July season and some neighborhoods resemble "war zones" during that time. The full report can be read here

Basically the fireworks sellers and the cities want local control as it makes it much easier for the fireworks companies and the teams and clubs that benefit from them to make this look like a grass roots populist campaign when in reality all it is is "astroturfing" which is activity which seeks to create the impression of being spontaneous, grassroots behavior, hence the reference to the artificial grass AstroTurf. The goal of such a campaign is to disguise the efforts of a political or commercial entity as an independent public reaction to some political entity—a politician, political group, product, service or event. Astroturfers attempt to orchestrate the actions of apparently diverse and geographically distributed individuals, by both overt ("outreach", "awareness", etc.) and covert (disinformation) means. Astroturfing may be undertaken by anything from an individual pushing one's own personal agenda through to highly organized professional groups with financial backing from large corporations, non-profits, or activist organizations. (see http://en.wikipedia.org/wiki/Astroturfing)

One mayor quoted below noted “There seems to be a lot of attention paid to the fact that it’s a fundraising mechanism, but it’s also an American tradition,” he added. Of course what he failed to point out was that all of the "astro-turfers" only use the "tradition" as cover for what they really want; a quick way to raise some loot (while polluting th environment and raiding city coffers for extra police presence). This is all very transparent.

Published Saturday, April 26, 2008 9:50 PM PDT
Public safety
July 4 safety discussed
Costa Mesa officials pass on proposal to suspend sales of legal fireworks. City resembles ‘war zone’ on the holiday, some say.

By Chris Caesar

Reaction to an Orange County Grand Jury report calling for a three-year moratorium on the sale of “safe and sane” fireworks in Costa Mesa for the Fourth of July has been lukewarm with elected officials saying they would not hear or endorse the proposal — at least for this year.

Five Orange County cities, including Costa Mesa, permit the regulated use and sale of “sane and safe” fireworks endorsed by the state Fire Marshall, which has led to some friction between the cities and their neighbors.

Some officials say the cities resemble a “war zone” on the Fourth of July, and that even the use of legal fireworks contributes to the holiday’s chaotic atmosphere and a significant increase in the use of their illegal counterparts.

Sports teams and extracurricular groups, however, sell the items as part of their annual fundraising drives, leading some city officials to be wary of banning the practice outright.

Mayor Eric Bever, who reviewed a rough draft of the report prior to its final publication, said he would favor a “local control” approach to fireworks regulation, noting the city has its own internal task force to improve fireworks safety.

“I know the state, feds, county and everyone else wants to mandate everything, but I think that the local people should have as much control as possible in regards to their destiny,” he said. “We’re working toward finding ways of managing fireworks more efficiently, and we’ve had our task force out in the field on the Fourth of July in the last three years. I think people are getting the idea that they won’t get away with illegal fireworks anymore.”

“There seems to be a lot of attention paid to the fact that it’s a fundraising mechanism, but it’s also an American tradition,” he added. “Certainly there are people who are disrupted by illegal fireworks — I count myself among them — but I don’t think that killing off an American tradition is the way to solve that problem.”

Councilwoman Wendy Leece said the city can become a “war zone” on the holiday and that she sympathized with the city’s fire and police departments during their heightened patrols on the Fourth of July.

Yet, she also said that personal responsibility and citizens working together would be the only force that would enhance safety, and that any moratorium should be implemented with local groups in mind.

“Putting a moratorium on our fireworks sales this year would be a hardship for organizations which depend on this money for their programs,” she said. “However, if things are worse this year in our city, I will support some type of a moratorium for next year.”

Costa Mesa resident and mother Linda Schwandt said that she frequently participates and donates to fundraisers supporting local youth, and said she would feel bad if the proposed moratorium hindered their activities.

But, assuming they are given ample time to reorganize their efforts, she thought it may be worth a shot.

“I think that would be pretty fair,” she said. “Let the numbers speak for themselves.”

The City Council will provide direction to staff in regards to a list of suggestions generated by city staff during its scheduled May 6 meeting, though Bever said it would be unlikely the city would take up any formal discussion of the grand jury’s recommendations.

Attempts to reach a representative of the Orange County Grand Jury were unsuccessful.

CHRIS CAESAR may be reached at (714) 966-4626 or at chris.caesar@latimes.com.


Thursday, April 24, 2008
Update: Grand jury says cities that allow fireworks sales should stop
Report calls on 5 cities that permit 'safe and sane' fireworks sales to enact 3-year moratorium for safety's sake.
By ERIC CARPENTER
The Orange County Register
Comments 41 | Recommend 4

SANTA ANA The Orange County Grand Jury released a report Thursday calling for the five Orange County cities that allow the sale of fireworks to temporarily ban such sales – adding fuel to a debate that's flared for years.

The Grand Jury recommended the cities – Buena Park, Costa Mesa, Garden Grove, Santa Ana and Stanton – adopt at least a three-year moratorium on fireworks sales to improve public safety.

That recommendation quickly met with resistance from some city officials who have been dealing with the issue for years.

Supporters of so-called "safe and sane" fireworks say they are a good fundraiser for community groups and are a tradition for families who, in most cases, use them responsibly.

The Grand Jury report calls the permitting process for fireworks sales "flawed" and finds that taxpayers are required to foot the bill – last year about $188,000 – for extra police and fire services during the Fourth of July season.

Grand Jury Foreman Ann Avery Andres said police and fire officials told the jury that they are often overwhelmed by fireworks-related calls for service during the Fourth of July season and some neighborhoods resemble "war zones" during that time.

Allowing the sale of legal fireworks – those that don't explode or fly through the air – appears to contribute to the use of illegal fireworks, she added.

"Three years is what law enforcement officials determined would be an optimum time to change the culture of firework use and curb the use of illegal fireworks," said Grand Jury member Bill Guidas, of Yorba Linda.

Last year, Costa Mesa assigned an additional 20 police officers and firefighters on July 4 and responded to 272 calls for service.

"We get bombarded every year with fireworks calls," said Costa Mesa police Lt. Paul Dondero.

The Grand Jury report has no enforcement teeth; cities won't be required to make any changes to existing laws. Officials from each city are expected to file a written response within 60 days.

Garden Grove Councilman Mark Rosen didn't hesitate when he heard the recommendation for a three-year ban.

"Not going to happen," Rosen said. "Part of it is that it's a good fund-raiser (and) it is a tradition that families enjoy being able to have, fireworks in front of their homes. I'll continue to support fireworks."

Last October, the Garden Grove council delayed a vote on whether to let voters decide whether fireworks should be banned until after the coming July Fourth holiday.

"We put some heavy fines in place recently for unlawful use of fireworks, and we want to see how that plays out first," Rosen said.

Costa Mesa City Manager Allan Roeder said the city has tightened its regulation over the years and limited the number of booths allowed to sell fireworks to 40.

More regulations, unrelated to the Grand Jury report, are scheduled to come before the council May 6, Roeder said.

Buena Park Councilman Art Brown said his city is chaotic on July 4 and city crews are left to clean up the debris.

"Personally, I would like to see fireworks banned and to have the city provide a free fireworks show for the citizens to view," he said.

But because voters there decided in 2004 to allow the sale of fireworks, the Buena Park council would likely take no further action, he said.

The full report is available online at www.ocgrandjury.org.

Lakewood Accountability Action Group™ LAAG | www.LAAG.us | Lakewood, CA
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Pit Bull attacks

This is just another sign of slow collapse of a neighborhood into a ghetto like slum. Why do people need 5 dogs of any breed. They don't. Oh and I am sure these 5 dogs never barked much. And I'll bet the yard looked and smelled great. People that own these types of dogs always say they are gentile and sweet, great around kids etc. What they fail to forget is that they are fighting dogs and are bred for fighting. They also have large mouths and very powerful locking jaws. They never will be like golden retrievers. Period. These dog owners should be prosecuted in some fashion. Also it seems to me that the animal control officer was not well trained going after 5 pit bulls alone. A "two year" "veteran". What? Does not take a rocket scientist to figure that things could go really wrong on this assignment...picking up 5 pit bulls. Not the same and catching ONE stray poodle.

Pit bull mauls animal control officer
From wire reports
Article Launched: 05/08/2008 07:16:41 AM PDT

An animal control officer suffered injuries to his legs and an arm when he was mauled Wednesday by a pit bull at a Lakewood home, authorities said.

The officer, 28, a two-year veteran with the Southeast Area Animal Control Authority, will undergo surgery for his injuries at Long Beach Memorial Hospital, according to Aaron Reyes, the authority's director of operations.

``The biggest concern is infection,'' Reyes said. ``He has a break in his knuckle; his third knuckle is facing upward. His wounds are deep and they are tear-type wounds as well. They're watching for nerve damage and infection. We're on pins and needles just hoping that he does fine.''

The officer went to the home in the 6100 block of Briercrest Avenue at noon to speak with the residents about having too many pit bulls. Authority records show prior violations over the number of dogs kept in the residence.

The dog owner had agreed to relinquish custody of three of the five pit bulls on the property. When the officer attempted to capture the dogs, one ``changed its friendly demeanor'' and attacked him, Reyes said.

``This is a sad day for this officer, who has been hurt very badly simply trying to do his job,'' Reyes said.

The attacking dog will be tested by the Los Angeles County Department of Health Services for rabies. The four other pit bulls on the property will be euthanized.

Anyone with information on the case is asked to call the authority's Investigation
Advertisement
Division at (562) 803-3301, Ext. 224.

Lakewood Accountability Action Group™ LAAG | www.LAAG.us | Lakewood, CA
A California Non Profit Association | Demanding action and accountability from local government™

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Taxation Without Representation

As Vallejo readies for Bankruptcy due to public employee salaries, LBReport.com did an article today on Logn Beach's action regarding public employees costs noting: "...Almost all of LB's Councilmembers voted to obligate LB taxpayers to incur at least $26.5 million in General Fund costs over the next five years to provide raises and add'l benefits in separate contracts with LB's non-public-safety city employees and firefighters. The Council majority did so despite a continuing structural deficit, declining property tax revenues...and multi-million dollar increases previously granted by the Council for the LB Police Officers' contract...."

Last week LBReport.com did an editorial on the mess in advance of this story. You can read it here. It looks like the same old pattern is repeated over and over endlessly..they got a raise so now we want one.

LAAG responded to the LBReport editorial as follows:

Subject: "Taxation Without Representation"

What an appropriate picture. Here is the wikipedia link for your readers that goes with the picture and to learn a little history. http://en.wikipedia.org/wiki/No_taxation_without_representation LAAG has been fed up with local politicians pandering to public employee unions. We started this crusade before the mainstream media got on board. At first it was limited to giveaways to "public safety" employees. Now its the full spectrum of public employees with no end in site. The problem is that all these giveaways are done in "plain view" yet concealed from most taxpayers. We need more info on the internet. More disclosure. More timely. Easier to find. The other thing that need to be done is we need to start telling private sector employees what employees like them are making for less work, less skill, less education and less hours. Once taxpayers see that then they will get angry and throw out the politicians that hide or fail to fix the problems. Check out our site for details www.LAAG.us as well as http://www.pensiontsunami.com/ and this little gem courtesy of the Sacramento Bee (what a great paper; sort of like LB Report on steroids) http://www.laag.us/2008/03/want-to-know-what-state-employees-make.html


Lakewood Accountability Action Group™ LAAG | www.LAAG.us | Lakewood, CA
A California Non Profit Association | Demanding action and accountability from local government™

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Vallejo, CA Bankruptcy Looms

This is a really big story that is not getting much press coverage. Astute LAAG readers have seen this coming for some time. The question is really whether or not this will spell out the future for many small California cities that are being held in a chokehold by public employee unions who refuse to bend during the downturn in the economy. Their feeling is just raise taxes. The hell with the taxpayers. We want our six figure retirements! We are the new elite in CA. This will be a big showdown and Vallejo needs to be watched to see if it is the model for future bankrupt cities. I am sure Long Beach is watching closely. I hope the public unions are.

Vallejo, California, Residents Foresee Cuts as Bankruptcy Looms

By Michael B. Marois and William Selway
More Photos/Details

May 8 (Bloomberg) -- As Vallejo, California's home prices plunged, the once-humming Navy town on the north edge of the San Francisco Bay seemed like a good place to settle down, said Tim Medrow, a manager at a store that sells floor and bathroom tiles.

Then came the city council meeting Tuesday night, when elected leaders voted to turn Vallejo into the largest California city to declare bankruptcy. ``It's crippling the city,'' said Medrow, 32. ``It's already feast or famine. And it's only going to get worse now.''

Vallejo, with a population of 117,000, is being squeezed by declining home sales that have rippled through its economy, cutting into the taxes it relies on from local retailers and home owners. It has been pushed to the breaking point, city officials say, by union contracts with firefighters and police it can't afford or renegotiate.

After talks with unions stalled, the seven members of Vallejo's city council decided unanimously to approve filing for bankruptcy. According to a report by City Manager Joseph Tanner, the city would otherwise face ``draconian'' cuts to close a $16 million budget shortfall that would leave the community faced with deteriorating roads and public buildings and rising crime.

``This is dire,'' said Councilwoman Erin Hannigan. ``We are at rock bottom.''

Bankruptcies Rare

Cities and towns rarely go bankrupt. Since 1937 there have been 543 municipal bankruptcies, two-thirds of them small districts established to sell municipal bonds for projects, according to James Spiotto, a municipal bankruptcy specialist at Chapman and Cutler LLP in Chicago.

The last California city to go bankrupt, Desert Hot Springs, a town of 20,000 near Palm Springs, did so in 2001 because it was hit by a legal verdict it couldn't afford to pay. Orange County, California, was felled by bad bets with leveraged investments in 1994.

Vallejo residents worry that a filing will hurt a city that struggled even in the best of times, when median home prices more than doubled between 2000 and 2005, according to the city manager's report. In interviews, they said they were concerned it could scare away new residents, hurt city services, and push Vallejo deeper into the hole.

``What business is going to want to come to a city with no money?'' said Josef Klaus, the owner of a vacuum and janitorial supply shop.

Vallejo, on the San Francisco Bay, was home to the West Coast's first shipyard, and residents and business owners say its economy never recovered after 1996, when the facility was closed by the U.S. Navy as the military pared spending following the end of the Cold War.

Housing Slump

The area has since been one of the hardest hit in Northern California by the housing market slump. Home prices in Solano County, which includes Vallejo, dropped 26 percent in March from the year before, according to DataQuick Information Systems, a firm which tracks real-estate markets in the state.

That helped fuel a projected sales tax drop of 7 percent to $12.4 million, according to city figures, while the taxes collected when property changes hands are expected to fall by more than $1.6 million.

Vallejo is also being hurt by its contracts with unions, which have wielded clout in the blue-collar town. As budget shortfalls emerged this year, the city has been unable to wrest permanent concessions from the police and firefighters that account for $58 million, or 69 percent, of the city's general fund budget last year.

Seeking Concessions

The permission to file bankruptcy may give the city more leverage with unions concerned that a federal judge might order more onerous cuts. Joanne Schivley, a city councilwoman, said Vallejo may stave off filing for protection from its creditors.

``We can pull the plug on bankruptcy at any time,'' she said.

Should Vallejo file, a federal bankruptcy judge must decide whether the city is actually insolvent. Assistant City Manager Craig Whittom said a plan to emerge from bankruptcy might include asking voters for more taxes.

Without additional revenue, he said, spending for road maintenance, libraries and health clinics may be curtailed. He said police and fire fighting services are already at minimum levels because of previous layoffs aimed at cutting public safety labor costs. Police no longer have enough officers to investigate property crimes, he said.

Businesses Suffer

Megan Bolton is feeling the squeeze. Bolton, who owns a commercial and residential window business with her husband, said building and remodeling fees rose fourfold last year, and she's had to pass it along to customers.

``Vallejo doesn't value businesses,'' said Bolton, 28.

Ivonne Johnson, a 38-year-old cheerleading and dance instructor, moved to Vallejo in October from San Francisco, looking to get away from crime and high-priced real estate. She stepped back from buying a home after she saw $80,000 cut from the asking price of one she was looking at. After this week's news, she's set her sights elsewhere.

``If city services are going to lose funding, and that means there might be less police officers who can respond, we're afraid it might turn into the kind of place we just left,'' she said.

To contact the reporter on this story: Michael B. Marois in Sacramento at mmarois@bloomberg.net; William Selway in San Francisco at wselway@bloomberg.net.


Lakewood Accountability Action Group™ LAAG | www.LAAG.us | Lakewood, CA
A California Non Profit Association | Demanding action and accountability from local government™

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The "smokeshop" arrives in Lakewood

I guess the moral of the story is be careful what you wish for. A few months back we were complaining about the "Gotham Comics" bookstore on South St. near Bellflower Blvd., home of the former Von's market and Itana Furniture (aka "the dilapidated warehouse") The comic book store was in poor shape and attracted a bad element, not to mention all the "wonderful people" that hung out next door at the "Hide-a-way" bar. And dont forget the lovely liquor store just a few doors down from the Hide-a-way (so you can get your fix after the bar closes). Well now the folks over at the Hide-a-way will have some new friends...customers of the "smokeshop" which is moving into the newly renovated Gotham Comics store. There is only one problem. The "smoke shop", as the new owners call it, is not going to just sell tobacco, but that special tobacco, known to some as pot, mary jane, ganja etc. (call it what you like). So really its more of a 'headshop" than a smokeshop. Our sources tell us that the "smokeshop" received a "permit" from the city of Lakewood. Seems odd as the city tried to deny a simple liquor licence to Joe's Sushi a few doors down. With these three "wholesome" business all in the same block perhaps they can attract other similar businesses. "Fritz That's It" strip club lost its lease in Bellflower, perhaps they could move into the beautiful former Von's store that the city only took three years to force the owners to clean up. Its amazing what blight can do for a city's business culture? Lets see what next for South and Bellflower? I think Long Beach is chasing child molesters out of their city (due to Halfway houses running up against Megan's law). Perhaps we could put a halfway house in at the old Von's store. It is truly amazing how much the city fawns all over Lakewood Shopping Center and the new Costco yet falls flat on its face when it comes to shopping centers a mile away and not across the street from City Hall.

I can't wait for this July. Lakewood residents can go buy their pot, walk across the street to get their "safe and sane" fireworks and have a rip roarin' 4th. One book of matches keeps a whole family entertained all night.

Lakewood Accountability Action Group™ LAAG | www.LAAG.us | Lakewood, CA
A California Non Profit Association | Demanding action and accountability from local government™

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"Fresh and Easy" no so fresh and easy?

Well quite frankly we are not surprised by this news below. There is nothing "fresh" or "easy" about Fresh & Easy. Most of the produce is packaged in environmentally unfriendly plastic bubbles. Oh and they give you a nice "free" re-usable big PLASTIC bag upon checkout. I would not make a big deal over this fact but for the reason that the chain makes such a big deal about their environmental "consciousness". There is no selection (due to the small store size) and you have to check yourself out. So its not "easy". Also I would have spent less time just going to Pavillions or some other major chain store and getting all the items I wanted rather than just 50% of what I wanted. How is going to two stores to get what you need "easy"? Also the parking lot is 1/3 the size of Pavillions (which is across the street) so really its harder to find a parking spot not "easier". (well that really is not true most of the time as no one is in the Fresh & Easy store most of the time). Oh and of course there is the one "hybrid" parking spot front and center. What a joke. I wonder what "enviro-marketing" guy came up with that and what it cost them. I really dont understand this whole concept of a "mini" store with 1/3 the items and I suspect in a year this location in Lakewood will be gone. Oh and finally the prices are no great deal either so Food 4 Less and Costco see no competition here. Time for the red coats to pack up and go back to the UK. The Revolution is over.


Tesco Puts The Brakes On U.S. Expansion Of Fresh & Easy
March 31, 2008

By Steve Goldstein

LONDON (Dow Jones) -- Britain's Tesco is halting for three months the expansion of its U.S. operation Fresh & Easy, the food-retailing unit meant to carve out a niche between convenience stores and the massive warehouse-style retailers.

Tesco said the suspension of its expansion of the 59-store chain was planned and that it was "pleased" with its performance.

"We've given ourselves a little bit of time to kick the tires, smooth out any wrinkles, and make some improvements that customers have asked for," the company said in an blog entry.

Improvements made over the last few months include accepting American Express credit cards alongside those of MasterCard and Visa, the company said.

Fresh & Easy operates on the West Coast, with stores in Las Vegas, Phoenix, Los Angeles and San Diego.

It focuses on ready-to-eat meals and fresh products, and its arrival put a scare under firms ranging from Wal-Mart Stores (WMT) to Kroger (KR) to Whole Foods Markets (WFMI).

"Tesco suggested it wanted Fresh & Easy to have the convenience of Walgreens, the value of Wal-Mart, the fresh food quality of Whole Foods, and the differentiated product range of a Trader Joe's," said Credit Suisse analyst Andrew Kasoulis in a note last year.

"We think the format largely seems to have achieved that."

But the Sunday Telegraph, which first published the news about the delay, said there were rumors that the concept had missing internal sales forecasts. The report suggested that Fresh & Easy wasn't getting the customer traffic it needed to drive sales growth.

Shares in Tesco dropped 3.5% on Monday, one of the worst-performing FTSE 100 stocks -- underperforming even Terminal 5-ravaged British Airways.

Clive Black, an analyst at the U.K. brokerage Shore Capital, said the operation needs to be seen in context.

"The business is tiny within the context of the group, and even if it did fail (which we're not assuming), a 1 billion-pound cost within a business that has a market capitalization of over 30 billion pounds needs to be reflected upon," he said.

"Tesco management has consistently said to us that this is a risk-reward equation that is manageable and favorable, and this can remain the case."

Lakewood Accountability Action Group™ LAAG | www.LAAG.us | Lakewood, CA
A California Non Profit Association | Demanding action and accountability from local government™

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