In their meeting Thursday, the Mammoth Town Council planned to talk in closed session about the MLLA debt settlement offer and about internally borrowing roughly $4.4 million to pay lawyers, consultants and a DIF fund imbalance.
The money issues have deepened for the Town of Mammoth. The Town Council faced analyzing the recent and somewhat hostile letter from Mammoth Lakes Land Acquisition. An MLLA attorney accused Mammoth officials of refusal to accept the responsibility of paying the $42 million lawsuit judgment debt. The letter implied bad faith on the part of Mammoth. MLLA’s Jay Becker further insulted officials by sending the letter to the media before Town officials received it.
The deal offered by MLLA is for Mammoth to pay $2 million now and $2.8 million per year for 30 years with some other terms. The deal would allow lower payments by Mammoth in very low snow years. The Council planned to review this offer in a closed session.
Once out of closed session, the Council then planned to face a resolution approving an internal loan of $4.4 million from the Town’s Vehicle Replacement Fund to the General Fund. The agenda bill on this item describes the arduous process of settlement talks with MLLA and the deterioration of the Town’s finances, with a $700,000 shortfall this fiscal year and a $2.2 million shortfall next fiscal year.
Assistant Town Manager, Marianna Marysheva-Martinez, presents the agenda bill and said that the Town’s worsening financial situation has been made even worse by the fact that the General Fund paid for essential capital projects intended to be paid for by Development Impact Fees. DIF fees have dropped off due to the down economy.
Martinez said the Town intends to work with its creditors, employees and others, including MLLA, towards a “comprehensive debt restructuring plan.” The agenda bill says Town government needs the internal loan to pay $2,235,000 in legal fees over debt problems, $687,500 in financial consultant fees, $44,500 for a mediation process involving the Town’s creditors including MLLA, and $1.4 million to the negative balances in the DIF fund.
The Town General Fund would pay back the total $4.4 million to the Vehicle Replacement Fund over 11 years at around $400,000 per year.
The Town Council was scheduled to start meeting Thursday at 1pm with open session at 2pm in Suite Z.