Mammoth Town Council: MLLA offer, internal loan

mltc2-1-12In 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.


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10 Responses to Mammoth Town Council: MLLA offer, internal loan

  1. longtimemllocal March 28, 2012 at 6:43 pm #

    $687,500 in financial consultant fees WHAT THE HECK IS THIS!!!!!!!!!!!!

    • Benett Kessler March 28, 2012 at 9:04 pm #

      To quote from the agenda bill: “The Town retained various professional firms to assist in its efforts to (a) develop certain cash flow analyses, long-term financial projections, and a sustainable budget balancing and operational restructuring plan; (b) conduct mediation and, if mediation efforts should fail, pursue all available legal avenues, including, if necessary, the institution of a Chapter 9 bankruptcy process; and (c) eventually implement the budget balancing and operational restructuring plan. The Town must ensure that funds are available to pay the engaged professional firms for their services.” The specific firms hired for financial advice are FTI and NHA. Benett Kessler

    • Dingo March 29, 2012 at 8:19 am #

      I think I’m in the wrong line of work.

  2. Observer March 28, 2012 at 8:32 pm #

    The agenda packet document for the loan item states that most of the money being “borrowed” is to “pre-fund potential estimated fees of professional firms engaged to assist with the MLLA settlement process”. This implies that the Town is not planning to settle and needs huge amounts of future legal time/fees to take the TOML to bankruptcy. Why else set aside that much money in advance for lawyers and financial advisors? And doesn’t adding $397,837 a year to the General Fund budget for the each of the next 11 years for debt repayment just aggravate the budget deficits going forward? Isn’t this more likely some kind of strategy to find “safe harbor” for about $1.5M of TOML liquid assets in different accounts that can’t be attached by MLLA (while appropriating about $3M for non-yet-incurred professional expenses in its battle to fend off paying MLLA what it is owed)? Questions like this need to be posed to the Town Council at the public meeting on Thursday.

  3. F.Y.I. March 28, 2012 at 9:17 pm #

    Dissolve the township now !

  4. fed up March 28, 2012 at 10:56 pm #

    Wow 2.9 million MORE for legal fees and financial advice. Let’s see TOML spent more than 4.3 million already on legal fees associated with this fiasco. so that is roughly 7.2 million before we are done. Gee that seems just great.

    Are you kidding! This is responsible thinking. These people have no clue. They are brainless. The only brain they have is to get a job in this mess and make money over it.

    The Council needs an overhaul.

    • upthecreek March 29, 2012 at 12:49 pm #

      like I have been saying for years..
      “Government Gone Wild”

      Welcome to your new nightmare


  5. crazy dog March 29, 2012 at 7:34 pm #

    When did MMM become the Assistant Town Manager?

    • P&B March 30, 2012 at 4:32 am #

      MMM has always acted in this poisition, after all you wouldn’t expect Wilbrecht to step up a be responsible for anything…would you?

  6. dennis kostecki April 2, 2012 at 1:20 pm #

    Except for one elected official that remains today( If I understand the story correctly) those who got the ball rolling on this mess are gone. It seems to me Dave Wilbrecht and Marianna Marysheva-Martinez came unto the scene well after the fact. Yet there continues to be postings to the contrary as to their immediate responsibility for the situation that exists today.

    One is left with the question: What could be the motivation behind anyone trying to put the blame on those who were clearly not part of the original equation to begin with?

    Why the vendetta?


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