The Vallejo City Council voted Monday to approve renegotiated labor contracts that, combined with budget cuts, are expected to allow the city to avoid an immediate bankruptcy filing.

The council was poised to vote to authorize a Chapter 9 filing last week, before Mayor Osby Davis announced a last-minute deal with police and fire unions that would give the city some financial breathing room.

Without such an arrangement, Vallejo’s general fund was on pace to run out of cash by next month, according to a staff report prepared by city manager Joseph Tanner before the concession deal was reached.

Union negotiators agreed to defer raises due this year, and also to defer some payouts for unused leave that were due to employees retiring this year. Retirements have spiked in recent weeks as the scope of the city’s financial problems became clearer.

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