The shadow of bankruptcy in Mammoth Lakes

mammothtownofficesEven as headlines shouted that Stockton, California would file for bankruptcy by Friday, Town of Mammoth people suspected the same fate for their town next week.  Mammoth officials have not confirmed that they will file for Chapter 9 municipal bankruptcy, but short of a deal on MLLA’s $43 million debt, bankruptcy seems the only choice. The many steps taken, including mediation, show that Mammoth officials have been carefully planning for potential bankruptcy for some time.

The Town of Mammoth did issue a press release to reveal with whom they have been in mediation. The big creditor, MLLA, has declined to participate. The 60-day mediation, as set out by State bankruptcy law, will conclude Friday, June 29 unless there is some reason to extend it.  Officials said that the Town “has been able to reach agreements with most parties.”  Town officials also secured releases from creditors to make their names public. The information is posted on the Town’s website.

The Town press release says that Mammoth has “sought agreements with its creditors in an attempt to restructure its current debts and obligations outside of bankruptcy, or pursuant to a Chapter 9 plan if a bankruptcy is commenced.”  Regardless of the outcome of mediation and the status of agreements, Town officials say they plan to implement next fiscal year’s budget which was balanced through the assumption that creditors would make concessions.

The list of creditors posted on the Town website includes all civilian employees.  Their signed deal calls for an 8% payment by employees into their own retirement, 2% cut of deferred compensation, a limit on the annual cash out of leave to 80 hours plus a recommendation for a 10% cut in pre-July leave balances.  Sworn employees have made a similar agreement with a 9% retirement pick-up and a 5% savings from discontinuation of a savings plan. The Police Department will lose one position plus the same items in civilian workers’ agreement.

Mammoth School District is listed with a 10% reduction in lease payments for the ice rink. 10% funding reductions are listed for the Mammoth Chamber of Commerce, Bravo Gardens, Mono County Dispatch, Steve Searles, Mammoth Tourism, Mammoth Lakes Housing, Eastern Sierra Transit, and Mono County Historical Society.  The Town will cancel the County contract for the Whitmore Animal Shelter and the contract with High Sierra Energy Foundation.  A new agreement has been signed with Hot Creek Aviation, the FBO at the Airport.

Not participating in mediation was developer Terry Ballas, although discussions are under way regarding his remaining development rights at Mammoth Airport.

Also not participating in mediation were Minaret Village Center and Bradmont LLC, both of which hold leases on the Town Offices and Police Department. The California Joint Powers Authority did not mediate on a 10-year payment on past liabilities amounting to $1.4 million.

Most significantly, Mammoth Lakes Land Acquisition refused to mediate on their $43 million lawsuit judgment.

The Town’s press release points to a proposed plan of debt adjustment to be filed with the Bankruptcy Court, say officials, if the Town determines to commence a Chapter 9 bankruptcy case.  All of this is available on the Town of Mammoth website.

The Town Council scheduled a special meeting for Thursday, June 28 at noon in closed session.  They will apparently discuss mediations and potential bankruptcy.


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11 Responses to The shadow of bankruptcy in Mammoth Lakes

  1. upthecreek June 27, 2012 at 10:38 pm #

    Stockon , CA = BK

    “Death by a Thousand Meetings.” Mediations ended Monday at midnight

    the quote above describes what is happening in Mammoth to a “T”

    Gov. Gone wild

    BK it and be done Mammoth

  2. Dingo June 28, 2012 at 9:14 am #

    Misery loves company.

  3. John Barton June 28, 2012 at 9:51 am #

    As I already said under a previous headline, Mammoth will be insolvent 7/2. When they will announce it and the media frenzy begins remains to be seen. How about 7/4? Go out with a bang!

  4. SierraFan June 28, 2012 at 10:59 am #

    I think this is inevitable! Negotiate a much lower result and sell what ever they can to pay this out in a reduced time frame then move on to greener pastures. What would a business do?

    • John Barton June 28, 2012 at 12:52 pm #

      A business would declare Chapter 7 bankruptcy, essentially an asset sale and would be gone. In this case there is no negotiating. The court has ruled and that’s the end. The tax payers are now on the hook because of gross incompetence of our elected and appointed “leaders”. They will find ways to cut costs and strive to be leaner which will ultimately result in lessons learned and a way for the town to see that can make do with much less– helpful for a future generation, I hope.

      • johnjcampnfish July 1, 2012 at 7:14 pm #

        Shouldn’t that read, “the MAMMOTH LAKES taxpayers are now on the hook”?

        • P&B July 2, 2012 at 6:05 am #

          Sadly, yes the Mono County taxpayers with all suffer from this fiasco managed by Dave Wilbrecht and implemented by his front person 3M (combined payouts close to $500K with benefits). Typical of this administration they continue to skim the best from the top and move everyone else towards the “cliff” (seems to mirror Bell city administration).

          The closed door meetings should be focussed on what is a necessity rather than a want, but it’s obvious that obfuscation of the true needs of the town/citizens will continue to be the order of the day.

          The elected officials continue to operate in the dark and approach solutions with clandestine methodologies rather than the much proclaimed “transperancy”. When will this change, likley not in our life times due to personal interests driving the direction of the solution rather than the “wiil of the people”.

  5. Just the facts July 2, 2012 at 12:12 pm #

    Hate to break this to you P&B, but Dave Wilbrecht was busy running a successful county way before the town’s airport monstrosity hit the fan. You would be better served focusing on everyone who had anything to do with the “let’s get rich with the airport!” thing. Some of them are still around and get re-elected, not appointed, year after year.

    • Big AL July 2, 2012 at 2:12 pm #

      Right on facts, I hear ya

  6. A brilliant idea? July 2, 2012 at 1:51 pm #

    Everytime I drive by the airport with its empty hangars and vacant buildings, and the notion that a hotel would be a terrific idea there …
    I think the same thing – somebody took a bundle of money and ran.
    And those same people are still around, smirking and lurking.

  7. Big AL July 2, 2012 at 2:14 pm #

    I don’t think a motel will work so good there, but if they can’t attract people with air craft, they could maybe attrct people who need storage space maybe? If I’m not mistaken, I think there is some of that that is happening now? Just a thought.


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