Mammoth one step away from bankruptcy
The Town of Mammoth Lakes is seemingly on a collision course with mediation in its $42 million judgment by the Mammoth Lakes Land Acquisition.
With settlement talks at a standstill, mediation is its last chance before the Town is forced into its final option—municipal bankruptcy.
A local court, the state’s appeals panel, and the California Supreme Court have pummeled Mammoth.
So far, the town has spent $400,000 in legal fees on the settlement part of the matter, according to Marianna Marysheva-Martinez, the town’s financial advisor who is the point person on the case (along with Town Manager Dave Wilbrecht).
The grim tale was offered at Wednesday’s Town Council meeting by Marysheva-Martinez.
The council chambers were jam packed—standing room only.
Wilbert said all the information in the case is also on the town’s website. Because it was televised, people can watch repeats of the meeting on their computers or on channel 51.
The list of frequently asked questions is also is on the site, he said.
Last week, MLAA attorneys disseminated an email describing their side of the case. Marysheva-Martinez responded in an email, which was also made available to the press.
Wednesday was the first out-in-the open meeting with the public regarding the case.
The upsides—which are hard to find—is that Mammoth can take advantage of a new California law that went into effect Jan. 1.
“Local governments should be required to first go through mediation before filing for Chapter 9, the form of bankruptcy reserved for municipalities.”
While municipal bankruptcy filings remain rare, the concept is more frequently being considered as governments are facing falling tax revenue and rising labor, health care, and retiree costs.
California is no stranger to municipal bankruptcy. Orange County filed the largest-ever Chapter 9 in 1994. The city of Vallejo, in the Bay area, emerged from bankruptcy last month after three years mired in Chapter 9.
The process of mediation for Mammoth Lakes could begin soon.
Under the new California state law, the state requires the mediator to have specific requirements. He or she needs to pass training, either in experience conflicting resolutions or one municipal bankruptcy and/or municipal finance.
The way mediation works is that both sides present a series of mediators’ names. By the end f that process, a single mediator will hear the case.
Town Councilman Rick Wood, Mammoth attorney, said the process is aimed toward finding a neutral observer.
He said once the mediator is named, the whole thing get wrapped up with 60 days.
So put on your battle helmets.
D-Day looms at last.