A Vallejo councilwoman warns Central Falls about Chapter 9

August 15th, 2011 at 7:00 am by under Nesi's Notes

Stephanie Gomes is a member of the City Council in Vallejo, Calif., which finally exited Chapter 9 last week more than three years after it first declared bankruptcy. With Central Falls looking to Vallejo for guidance in how the process works, Gomes wrote in to share her thoughts on what happened there:

The thing people don’t understand is how our employee unions dragged us through legal challenges that ultimately cost us both years and millions of dollars – we’ve spent approximately $11 million in legal fees.

Our unions challenged our solvency, whether we were hiding money, demanded we pay them from restricted funds, and ultimately fought us on whether we could tear up our CBAs [collective bargaining agreements]. We prevailed on these challenges, but it was costly and completely unnecessary.

We proved legally we could have restructured our employee contracts (94% of our general fund), but failed to do so in a meaningful way because of a lack of political will. We even gave raises to employees in bankruptcy! (I was in a minority against an employee-union-funded/supported majority.) Now the majority is asking for a sales tax increase to make up for what they failed to do in bankruptcy.

I recently gave a talk to a local taxpayers association on an “inside look” at our bankruptcy that you might be interested in. I have my speech transcript and a link to a video of the speech, with Q&As afterwards where I had our former city manager come up and enlighten people on a few outstanding questions. It’s at StephanieGomes.com.

I understand Rhode Island has different laws than California, but I certainly hope you all don’t get mired in legal battles or political games.

(photo: Associated Press/Eric Risberg)

 

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2 Responses to “A Vallejo councilwoman warns Central Falls about Chapter 9”

  1. Cosmo says:

    Seems like a nice lady, but she obviously does not know RI at all. Here’s the way it will go here. Public employee unions will wage a legal battle to suck out whatever money is left in this state that hasn’t already been taken by the pay and benefits of the retire after 20 years of service even if you’re only 40 crowd. Then our bought and paid for general assembly will keep everything the way it is right now and raise our taxes to get the money pay for it. Badda bing badda boom welcome to Rhode Island lean forward please.

  2. Sam Kurshan says:

    Gomes conveniently left out the most important facts concerning Vallejo’s bankruptcy. That being how she and her friends created VIB and used it as a tool to market anti u\public safety union propaganda, which scapegoated the fire fighters and police as being the cause of Vallejo’s financial troubles, through a relentless attack using hostile cartoons depicting them as pigs accompanied by hateful statements. This process accompanied by an anti labor City Manager, Joe Tanner, completed destroyed labor relations and trust. It was a deliberate form of sabotage which forced bankruptcy because under the hostile atmosphere that existed, no meaningful dialogue yielding any meaningful concessions occurred.

    Gomes and her friends did absolutely nothing to avoid bankruptcy, they pushed for it, it failed and only now after the fact is Gomes regretful.
    She is the last person to be lecturing about bankruptcy.