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Public safety, jobs a concern for bankrupt California city

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Jeremy Hobson: Well, to a completely different sector of the economy now. You’ve heard about all the budget problems facing cities and states. Today one of the first cities to file for bankruptcy after the financial crisis in 2008 is trying to get out of it. A judge is set to rule on a plan to exit from bankruptcy in the Northern California city of Vallejo.

Kelley Weiss reports.

Kelley Weiss: There’s a sign outside of Vallejo’s old fire station headquarters: “Closed, in case of emergency call 911.” But Vallejo Fire Chief Doug Robertson says 911 isn’t a sure bet anymore. There used to be four dispatchers to answer the phones. Now there are two.

Doug Robertson: It’s serious business when somebody’s breaking into your home or your house is on fire and you call and no one picks up the phone. We get those complaints and they’re legitimate.

The city shut down three of its eight fire stations after filing for bankruptcy in 2008.

On a Monday night, Robertson’s car bumps along roads full of potholes. The city has put street maintenance on hold, and the police department has lost more than 30 percent of its officers. Robertson grew up in this town and says residents are more emotionally and financially strained than before.

Robertson: Well economically, it’s as bad as I’ve ever seen it.

The city has a plan to get services restored. It hinges on paying creditors what it can. And those creditors are mostly city employees. Some could end up getting 5 cents on the dollar for retiree health benefits and back pay.

The next step is to jumpstart the economy. Michael Coan hopes to attract private businesses. He’s the board chairman of Vallejo’s Chamber of Commerce. He says a faster permitting process and deferral of some start-up costs could help do that.

Michael Coan: Something to give them an incentive to say, you know hey, Vallejo’s offering this, Vallejo wants us here, they’re really willing to work with us — let’s go here, let’s go to Vallejo.

Coan says landing big-box stores would create jobs. And draw traffic from the highway running into the San Francisco Bay area. That could entice a large retailer, despite the city’s debt problems.

Malachy Kavanagh: Nobody builds a store based on the past; they’re basing it on the futures.

That’s Malachy Kavanagh with the International Council on Shopping Centers. Kavanagh says local consumers are starting to spend more, and retailers are looking to expand again after the recession.

In the meantime, city leaders say Vallejo still has to get out of bankruptcy and restore confidence in public safety.

From Vallejo, Calif., I’m Kelley Weiss for Marketplace.

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