Letter to editor: Town of Mammoth responds to MLLA letter

mammothtownofficesThursday, April 05, 2012
RE: Letter to the Editor from the Mammoth Lakes Town Council addressing a Letter from Mammoth Lakes Land Acquisition (MLLA) to the Town dated March 23, 2012

Dear Editor:
On March 23, 2012, MLLA sent the Town a letter with their demand for a full payment of their $42 million judgment. They chose to make their request publicly, breaching the confidentiality agreement between MLLA and the Town and obliging us to make this public response.

As a point of fact, since the start of the negotiations, the Town Council has been receiving many requests for information and desires to communicate important information to the community about the status of the negotiations and settlement. Last fall, we formulated information in a Frequently Asked Questions (FAQ) document and were prepared to send to the media. In respect for the confidentiality process, the FAQ was sent to MLLA. MLLA immediately demanded the Town not send it as proposed, claiming a breach in our agreement with them. In respect to the process, and MLLA’s specific request of the Town to not distribute the FAQ, we held back sending it.

The Town Council has reported publicly and to MLLA that it is facing structural financial challenges above and beyond MLLA’s $42 million judgment. After balancing a $2.8 million Fiscal Year 2010-11 shortfall in June 2011, the Town now estimates a $0.9 million budget gap in FY 2011-12, and a $2.5 million baseline shortfall in the following year, FY 2012-13.

While MLLA’s judgment is the Town’s largest liability, we must make difficult cuts in expenditures and restructures of existing indebtedness simply to balance the above baseline budget issues, and must make even more cuts and restructures in order to finance any sort of payment on the judgment. For context, the $2.5 million baseline budget shortfall represents some 13% of the Town’s General Fund budget for FY 2012-13. If the Town were simply to make across-the-board cuts to balance that baseline issue without any other restructuring, all of its expenses would need to be reduced by 13%. This hypothetical, across-the-board reduction would include employee compensation, cuts to marketing, housing and transit dollars, reductions in public safety and snow removal services, cuts to recreation programs, and so on. This is why a fundamental financial plan involving both cuts and debts restructuring is important.

During discussions last fall, the Town Council and staff were intent on a settlement with MLLA that would withstand the test of time – a settlement that would not fail in the future due to financial conditions beyond our control, which could force the Town into a crisis. This was sound reasoning then and still is. As we have experienced this winter, financial crises do happen. This crisis has and will affect the Town’s ability to deliver services now and into the future. The Town Council and staff have a fiduciary responsibly to preserve essential services. The Town’s restructuring plan, once finalized, will balance the need to continue providing these services with the need to satisfy the MLLA judgment and other obligations of the Town.

Resolving the Town’s baseline fiscal issues and the additional issues posed by the MLLA judgment will require a broad and carefully crafted restructuring of the Town’s finances that is sustainable and can be supported by the community. The Town continues to formulate a plan to accomplish this goal that will involve concessions from multiple interested parties, including MLLA, who have been invited to participate in the mediation process provided by section 53760.3(a) of the California Government Code. So far, MLLA has refused to participate in that mediation.

As we continue to develop the Town’s restructuring plan and negotiate a fair and sustainable solution to the Town’s many financial challenges in the mediation, we will be able to make more detailed proposals in response to MLLA’s most recent demand.

 

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5 Responses to Letter to editor: Town of Mammoth responds to MLLA letter

  1. Observer April 5, 2012 at 3:22 pm #

    The Town Council seems to be suffering a serious disconnect from reality. Do they really think MLLA is obliged to “take a hit” along with everyone else? Where did they get the idea they have leverage in settling with MLLA? Is this mindset coming from the Texas lawyers providing Council with so-called expert advice? Meanwhile interest continues to accrue at 7% per annum on the unpaid judgement. What a mess.

     
  2. Town Council is a JOKE April 5, 2012 at 4:58 pm #

    Why Does the Town Council of Mammoth consistently reference
    “Section 53760.3(a) of the California Government Code”

    That section of the code says the town has TWO options:
    1 – Mediation
    2 – Declares a Fiscal Emergency

    Here’s the CODE:

    53760. A local public entity in this state may file a petition
    and exercise powers pursuant to applicable federal bankruptcy law if
    either of the following apply:
    (a) The local public entity has participated in a neutral
    evaluation process pursuant to Section 53760.3.
    (b) The local public entity declares a fiscal emergency and adopts
    a resolution by a majority vote of the governing board pursuant to
    Section 53760.5.

    53760.3.(a) A local public entity may initiate the neutral
    evaluation process if the local public entity is or likely will
    become unable to meet its financial obligations as and when those
    obligations are due or become due and owing. The local public entity
    shall initiate the neutral evaluation by providing notice by
    certified mail of a request for neutral evaluation to all interested
    parties as defined in Section 53760.1.
    (b) Interested parties shall respond within 10 business days of
    receipt of notice of the local public entity’s request for neutral
    evaluation.
    (c) (1) The local public entity and the interested parties
    agreeing to participate in the neutral evaluation shall, through a
    mutually agreed upon process, select the neutral evaluator to oversee
    the neutral evaluation process and facilitate all discussions in an
    effort to resolve their disputes.

    (NOTE: The interested parties (MLLA) are NOT REQUIRED to participate in this mediation.)

    53760.5. Notwithstanding Section 53760.3, a local public entity
    may file a petition and exercise powers pursuant to applicable
    federal bankruptcy law, if the local public entity declares a fiscal
    emergency and adopts a resolution by a majority vote of the governing
    board at a noticed public hearing that includes findings that the
    financial state of the local public entity jeopardizes the health,
    safety, or well-being of the residents of the local public entity’s
    jurisdiction or service area absent the protections of Chapter 9. The
    resolution shall make findings that the public entity is or will be
    unable to pay its obligations within the next 60 days. Prior to a
    declaration of fiscal emergency and adoption of a resolution, the
    local public entity shall place an item on the agenda of a noticed
    public hearing on the fiscal condition of the entity to take public
    comment. The board of supervisors of a county that intends to take
    action pursuant to this section and places a notice on an agenda
    regarding a proposed resolution to declare a fiscal emergency may
    require local agencies with funds invested in the county treasury to
    provide a five-day notice of withdrawal before the county is required
    to comply with a request for withdrawal of funds by that local
    agency.

    SUMMERY: The Town Council of Mammoth DOES NOT HAVE A LEG TO STAND ON.
    The Town Council of Mammoth CANNOT FORCE MLLA TO MEDIATION.

    Hey Mammoth, Time to put your Big Boy Pants on….

    … You Lost the case and all the appeals…. 4 YEARS AGO

    … Accept Responsibility… and START PAYING…..

    …. And STOP PAYING FOR MORE LAWYERS

     
  3. jose chavez April 5, 2012 at 7:00 pm #

    what a joke. no wonder why so many long time mammoth residents left town.

     
  4. Trouble April 5, 2012 at 8:14 pm #

    I’m actually glad to see this response. Any agreement to hide these negotiations from the public is simple wrong. The Mammoth tax payers should be allowed to know what is being proposed and have a say in this matter. My personnel opinion is to declare bankruptcy and let a judge deal with MLLA con-artists.

     
  5. kaat April 5, 2012 at 10:55 pm #

    “This hypothetical, across-the-board reduction would include employee compensation, cuts to marketing, housing and transit dollars, reductions in public safety and snow removal services, cuts to recreation programs, and so on.”

    So, it’s a no brainer…..keep public safety going along with snow removal services…..cut everything else….pay the court ordered $$$……act like adults and deal with reality….the town will survive and maybe people will stop laughing at us if we accept responsibility and just get it done with….enough of this already.

    Also…..the letter is full excuses and says absolutely nothing….it’s a joke, but so typical!

     

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