Distressed Cities Weigh Bold Tactics in a New Fiscal Era

http://www.nytimes.com/2012/04/01/us/cities-swap-bold-strategies-for-a-new-fiscal-era.html?_r=1&hp

For municipalities such as Vallejo, Calif., attempts to plug budget holes with one-time transactions are giving way to other, more radical approaches.

Robert Stout, the former finance director of Vallejo, Calif., was talking about the spiraling public safety costs that ultimately led his city to declare bankruptcy when he mentioned the time a fire broke out two blocks from his home there, not long after the city had closed some of its firehouses to save money.

“The first fire truck that went by was yellow,” Mr. Stout recalled. “Our fire trucks are red. So the first fire truck to respond was on mutual aid from a town 20 miles away. That gives you some sense of what you are facing when you get into these situations.”