VALLEJO, Calif. -- Setting the scene for a showdown in bankruptcy court, Vallejo officials have asked a judge to void employee labor contracts with several unions including those covering the police and firefighters.

The city filed the request with the federal bankruptcy court in Sacramento which is overseeing the proceedings involving California’s largest city ever to declare bankruptcy.

"It's not unexpected,” City Councilwoman Stephanie Gomes told the San Francisco Chronicle. “Our labor contracts are one of the main reasons we're in bankruptcy. We have employee salaries and benefits we simply cannot afford."

Police union officials said would fight the request in court papers that are scheduled to be filed by both sides on Friday.

"It's absurd, ridiculous,” Vallejo police Lt. Mat Mustard, vice president of the police union, told the paper. “This doesn't just affect salaries, but working conditions. Although I think voiding the contracts has been their motivation all along."

The seven-member Vallejo City Council voted unanimously to authorize the city manager to file for bankruptcy on May 6 after months of failed negotiations with its police and firefighters unions.

After that vote, city officials and union representatives continued to meet in hopes of reaching a last-minute deal to stave off bankruptcy, but the two sides couldn't reach an agreement.

Vallejo, a mostly working-class city about 30 miles northeast of San Francisco, faces a $16 million budget deficit in its fiscal year starting July 1.

The foreclosure crisis and economic downturn have caused a sharp decline in revenue from sales tax, property tax and development fees.

Many officials and residents blame Vallejo's chronic financial problems on labor contracts that they say provide overly generous pay and benefits to the city's police officers and firefighters, which make up about three-quarters of the city's general fund.

The unions say compensation for Vallejo's public safety employees is in line with that of other Bay Area cities, and blame the fiscal crisis on government mismanagement and poor decisions by previous city councils.

In addition to being the largest California city to declare bankruptcy, Vallejo also is the first to do so because its revenues cannot cover expenses, experts say.

Orange County filed for bankruptcy in 1994 after it lost money in a series of bad investments; the Southern California town of Desert Hot Springs declared bankruptcy in 2001 after losing a lawsuit.

Some officials worry that bankruptcy could damage the city's reputation and ability to attract residents and businesses, but others say the city could eventually emerge stronger and more financially secure.

"The mismanagement of the city for so long has tarnished our reputation, not bankruptcy," said Councilwoman Stephanie Gomes. "Bankruptcy gives us the opportunity to fix that mismanagement and put a long-term plan in place to ensure true growth and recovery."