As Mammoth officials continue to hand over information to Mammoth Lakes Land Acquisition so they can eventually negotiate payment of Mammoth’s $41 million debt, the option of bankruptcy remains
a possibility. Advisor to the Town, Marianna Marysheva-Martinez continues to say she does not prefer bankruptcy. It is believed MLLA agrees. Martinez did share with Sierra Wave an article on details of the City of Vallejo’s bankruptcy.
The article appears on InsideBayArea.com and quotes Vallejo City Councilwoman Stephanie Gomes who appeared at a meeting of the Contra Costa Taxpayers Association. The article quotes Gomes as saying that bankruptcy is not a magic pill for cities struggling to balance their budgets.
In the case of Vallejo, a number of financial issues hurt the city, including closure of the Mare Island Naval Base and the disappearance of its federal funds. The loss of the base created a major economic vacuum. The article said Vallejo had also failed to cost out pensions and benefits and employee unions gained in power.
In a downhill loss of the tax base, general fund and reserves were depleted by 2008 and the Vallejo City Council voted to file for bankruptcy. Unions fought the bankruptcy but lost. The article on Vallejo said that “The city won a precedent-setting legal point: that a bankruptcy court could void public employee contracts.”
The City of Vallejo still has problems but did gain power over employee unions, according to the article written by Peter Langley, a former city councilman from Martinez, CA.