Mammoth’s money problems: chronic and serious

mammothtownofficesMammoth Town government has a long-term, structural, financial problem that will require more cuts.  That’s what Assistant Town Manager Marianna Marysheva-Martinez said when Sierra Wave News asked her if the Town has a chronic lack of money to cover costs, aside from the $42 million debt issue.

Next fiscal year, the Town expects a nearly $3 million shortfall.  Revenues, Martinez said, are not keeping up with expenses. Partly as a result of this, the Town sent out letters to all Town creditors, including employees, to ask them to mediate lower payments.  One of the Town’s legal firms is working to get a mediator on board to begin sessions this month. This type of mediation can be a prelude to bankruptcy.

Martinez said Mammoth is experiencing what many towns, counties and states now deal with – rising retirement, medical and other costs in the face of declining revenues.  It means as things are now, Mammoth can not pay its bills long-term without making more changes.  Martinez said Transient Occupancy Tax is not growing as it used to, and property taxes are dropping due to real estate issues.  Sales taxes are growing but the increase is not keeping up with the expenditure side.

Asked how chronic the Town’s money problems are, Martinez said, “We’re in a very challenging situation.  It’s structural.  Long term, revenues can’t cover costs.”  Martinez said that’s why the Town invited all creditors to mediate.  She said there needs to be a “major restructuring involving operations, costs, employees and services provided.”

And, the costs are rising.  Next fiscal year, Town employees’ contracts entitle them to a 4.5% pay  increase.  CalPERS, the state retirement fund, has lost money over recent years through its stock market investments.  That means the Town has to pay more into the pension system.  More recently, CalPERS experienced another revenue decline.  Again, more money required from the Town.  Medical insurance costs have gone up 5 to 9%, Martinez said.  Service contracts have gone up.  The bottom line – salaries, benefits and retirement are going higher than revenue on a consistent basis.

Martinez called it a “huge problem.”  She said given the magnitude, it’s not enough to just look at services. Officials are now at work on what they call a Restructuring Plan which “attempts to take a little from everyone.” This plan is the key component in upcoming confidential mediation sessions. Martinez said the Town will ask mediation participants if the plan can go public.

All of this grim news does not even include Mammoth Lakes Land Acquisition and its $42 million debt. An Associated Press story published in many newspapers says Mammoth Lakes is the second local government after Stockton to use a new state mediation process as it contemplates bankruptcy.  The AP reported that Assembly Bill 506 requires local governments to enter an evaluation process with bond holders, creditors, employee unions and retirees for up to 90 days in an effort to avoid Chapter 9 protection.

The Assistant Town Manager did say officials want to engage the public in the budget process to talk about how to deal with this long-term financial problem.  Those public talks will not happen until later this month or next. Could the situation lead to cutting Town departments?  Martinez said it could, but “we would have to hear from the public first.”

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41 Responses to Mammoth’s money problems: chronic and serious

  1. GREAT POST!!!! April 13, 2012 at 7:48 pm #

    Everyone in Mammoth should read your post.

    Good Job

  2. dennis kostecki April 13, 2012 at 5:56 pm #

    I’m an old, grizzled retired, tea-bagger who didn’t plan for the future, in debt to my ears, refuse social security payments because after all – that’s socialism, I listen to Rush Limbaugh 3 straight hours a day and reruns on weekends, believe that Michele Bachman should be president, think that underserved kids from the ghetto should not get one red cent for medical treatment and pull themselves up by their bootstraps, and support the previous administration’s wars (so what if they have bankrupted the country) and Dick Cheney and his wife Lynne who were both previous CEO’s of international defense contractors … and, and … (I’m out of breath) and most importantly, I can wave the flag faster than you can possibly imagine.

    • Rock of Ages April 14, 2012 at 1:20 am #

      Maybe you are an old, experienced, grizzzled retired person who has experiencened your attempted govt. achieved dreams and has fallen short?
      JUST ANSWER IT…are you a free-loader?

      • happy & well-adjusted April 16, 2012 at 9:25 am #

        Wow! I had no idea there were so many rednecks in this part of the country!
        Limbaugh must be having a field day with them.

  3. Rob April 13, 2012 at 4:16 pm #

    dennis kostecki what do you do for a living? Retired, what did you do?

  4. Mo Murray April 13, 2012 at 1:47 pm #

    Winston Churchill once said, “What the people really want to hear is the truth-it is the exciting thing-to speak the truth”

    1. The people of TOML should be told the truth why Judge, Jury, Appellate Judges and even the California Supreme Courtall agreed with the judgement and legal fees awarded to MLLA.

    2. The people of TOML should be told the truth about how devastating and permanently destructive a Municpal Bankruptcywould be to all those who live, work, own businesses or real property in the community.

    3. The people of TOML should be told the truth by their Council why they are willing to go to great extremes,paying huge fees to Attorneys and Advisors who will tell them only what they want to hear.

    4. The people of TOML should be told the truth by their Council as to why they refuse to sell judgement Bonds to fund the payment of the adjudicated debt and create new taxes to service the bonds which over time would likely turn out to be less expensive than number 2 above.

    • johndoeml April 14, 2012 at 2:06 pm #

      Do you think we’ll get a good interest rate on the judgement bonds? My guess is the interest rate would be higher than any rates TOML could get after a completed bankruptcy and restructuring. I sure wouldn’t lend to Mammoth unless the interest rate was usurious. Bankruptcy is the better option.

    • P&B April 16, 2012 at 8:38 am #

      Problem is the “truth” is ALWAYS filtered by politicians and their lackies like Wilbrecht, 3M, and their upper management minions. The truth is counter productive to their goals based in clandestine manuevers behind closed dorr meetings under the guise of “possible legal action”…

  5. Trouble April 13, 2012 at 7:35 am #

    Dennis K. I wish you would stop criticizing us about people who blog using false names. I do so,so I can speak freely and not to draw attention to myself, my family and most of all my fellow workers. I listen to insults all day long about their anti- liberal views and ignore them all. We all have are reasons for not wanting to offend others.

    • dennis kostecki April 13, 2012 at 11:13 am #

      Whenever I read the non-stop angry rants from those who refuse to use their real, honest name on this format, I’m reminded of the Wizard of Oz.

      “Pay no attention to that man behind the curtain!”

      And just what is behind that curtain? …

      A sad little old man who is clearly something other that what he is pretending to be.

  6. jj April 13, 2012 at 5:56 am #

    So Dennis K. has pitty for me. Save it. If you can’t handle people speaking their minds freely, stop blogging.

  7. Principal Peter April 12, 2012 at 1:31 pm #

    200k plus benies for the Town Manager
    MMM as an Assistant Town Manager
    A recently hired budget analyst (to analyze what exactly?)
    A director, assistant, and three others playing cards down at the airport…..
    Sure, let’s not look at the REAL problem.

    • Well Said, Peter April 13, 2012 at 11:00 am #

      Principal Peter above has obviously discovered the largest concentration of Peter Principle refugees and generally useless individuals in the State of California, a virtual motherlode of incompetence.

      Peter Drucker must be smiling down on this motley crew as proof personified of his famous principle. And rumor has it that the Kennedy School of Government is planning to use TML as a case study in failed municipal government with the names changed to protect the guilty.

  8. How About Informing Your Readers April 12, 2012 at 11:49 am #

    MLLA Does NOT have to Mediate.

    “We have considered your proposal for mediation of the amounts owed to MLLA by the Town of 
Mammoth Lakes (“TOML”). Under the circumstances, we must decline to participate.


    The law/code (Assembly Bill 506, aka… AB506, Section 53760, Sections 53760.1,53760.3, 53760.5, of the California Government Code)…

    Does Not Force or oblige the creditors (like MLLA) to participate in this mediation.

    MLLA already gave the Town of Mammoth Lakes its answerer…..

    MLLA wants nothing to do with this Mediation Stall Tactic.

    The incompetence of Mammoth’s government will now turn this $30M judgment, into the current $42M Judgment, in to a $45M+ judgment.

    What a FARCE.

    The Local Papers in Mammoth Should Be All Over This…..

    But they’re not…. interesting … don’t you think.

  9. How About Informing Your Readers April 12, 2012 at 11:47 am #

    I just love all the articles by the Sierra Wave that FAIL to mention the OTHER OPTION Mammoth has…


    Here’s some articles by the Sierra Wave that FAIL to Mention this OTHER OPTION:

    April 11, 2012
    “Assembly Bill 506 requires local governments to enter an evaluation process with bond holders, creditors, employee unions and retirees for up to 90 days in an effort to avoid Chapter 9 protection.”


    April 5, 2012
    “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.”


    March 30, 2012
    “He (Dave Wilbrecht) explained that in California if a public entity is thinking about Chapter 9 and a re-structuring of debt, the Town “has to go through mediation.” Wilbrecht said that regardless of what MLLA does, some of the Town’s creditors will go to mediation.”


    Feb 15, 2012
    “on February 15, 2012, the Town sent MLLA a letter requesting that the parties continue their settlement discussions through a neutral evaluation process (i.e., mediation) in accordance with section 53760.3 of the California Government Code.”

    “the Town sent MLLA a letter requesting that the parties participate in a neutral evaluation process (i.e., mediation) in accordance with section 53760.3 of the California Government Code.”

    “Town sent MLLA a letter requesting that the parties continue their settlement discussions through a neutral evaluation process (i.e., mediation) in accordance with section 53760.3 of the California Government Code.”

    What Gives with the Sierra Wave News?

    • Benett Kessler April 12, 2012 at 1:57 pm #

      I see from your comment that you regularly read When we learn new facts, we include them. Chill out and stay tuned. Oh, and I don’t care for bullies. So, if you send any more ill-mannered emails, they will head to the trash. Benett Kessler

      • How About Informing Your Readers April 12, 2012 at 2:29 pm #

        Fair enough.

        Here is a NEW FACT…..

        …that, presently, is Not Being Reported by the Sierra Wave News:

        The TOML has two options.

        1) engage in a neutral evaluation process with its creditors with the help of a mediator;


        2) declare a fiscal emergency


        Will this information be included in your next article?

        • Benett Kessler April 12, 2012 at 2:50 pm #

          I’m publishing this so I can tell you to knock it off. We got your message. You don’t need to pound it in with a sledge hammer.

          I’ll gladly consider the information that you already sent in previous comments. Consideration and respect will go a lot further to my hearing what you may have to say. FYI, I cover many other stories and will get to this. Benett Kessler

          • dennis kostecki April 12, 2012 at 4:46 pm #

            I have nothing but pity in my heart for those poor soul posters that hide behind a made-up moniker and like a Rush Limbaugh or Ann Coulter, lambaste everything and everyone associated with local or national governmental functions. They are victims of non-stop cruel propaganda and hate-filled ignorance.

            But my pity does not extend so far as them insulting and chastising everyone whom they believe is standing in the way of their angst-ridden political agendas including those attempting to present the picture and story in an open and reasonable manner. This is an election year after all – and a nasty one.

            The recent political primary should be enough evidence to prove just how unreasonable and childish these foam-at-the-mouth types can be.

          • Tom April 12, 2012 at 7:41 pm #

            From the story of 6/22/11 , San Jose,CA

            “Opinon: Declaring Fiscal Emergency could make San Jose’s plight worse”…….

            “Just last year, San Diego considered adopting a similar Fiscal Emergency measure but decide against it after the City’s attorneys concluded that it was “unlikely that San Diego’s ongoing budgetary issues would qualify as an emergency” San Diego also concluded that even if it could declare a fiscal emergency, doing so would not permit the city to escape its contractural obligations under California law.” …..

          • MoMoney April 15, 2012 at 9:33 pm #

            Hey Benett,

            Anyone is allowed to say whatever they want, including criticizing your “journalism.” Lay off.

          • Benett Kessler April 16, 2012 at 8:22 am #

            Under the same premise, I agree;and can talk back if I want. BK

  10. dennis kostecki April 12, 2012 at 11:12 am #

    In a small community like Mammoth Lakes, where some elected officials have their fingers in so many pies for so many years, it seems to be that it might be a good idea to have written into Municipal Code laws prohibiting and strict punishment for: projects and developments promoted for illigitimate gain, bribery or accepting bribes, cronyism, nepotism, patronage and graft. To my knowledge there is no such law in the Mammoth Lakes charter.

    Kleptocracy is a form of political corruption where the government exists to increase the personal wealth and political power of its officials and the ruling class at the expense of the wider population often without pretense of honest service. This type of government corruption is often achieved by the embezzlement of local funds.

  11. dennis kostecki April 12, 2012 at 9:32 am #

    Until it is 100% illegal for an elected official to accept one penny from, partner with, or promote a project or development with the promise of a kick-back or favor, the system you have in place will be a corrupt one.

    • Problem Solved April 13, 2012 at 1:26 pm #


      You must be talking about Rod Blagiovich !

      You are correct.

  12. The Author of this Article is WRONG! April 12, 2012 at 9:26 am #

    To quote this article:

    “Assembly Bill 506 requires local governments to enter an evaluation process with bond holders, creditors, employee unions and retirees for up to 90 days in an effort to avoid Chapter 9 protection.”

    Absolutely WRONG!

    Assembly Bill 506 requires local governments, before resorting to bankruptcy protection, to do EITHER:

    1) engage in a neutral evaluation process with its creditors with the help of a mediator;


    2) declare a fiscal emergency.


    If the local government decides to go with option 1 (neutral evaluation), the CREDITORS DO NOT HAVE TO PARTICIPATE.

    So… the TOML will drag its feet, once again.

    I think it’s fair to say that this is just another stall tactic made by the Town of Mammoth Lake’s inept government to delay the inevitable (aka Bankruptcy Protection).

    Hey, Mammoth – Just Declare a Fiscal Emergency and move forward.

    Hey Sierra Wave – Maybe a little more fact checking is needed before these sloppy articles are released.

    • Benett Kessler April 12, 2012 at 9:55 am #

      I have yet to read AB506, but our story was quoting the Associated Press comments on that. I have now attributed that statement to them. Thanks for the info, but not the unnecessary scolding. Benett Kessler

  13. Friar Tuck April 12, 2012 at 8:00 am #

    “Assistant Town Manager Marianna Marysheva-Martinez” is going to be the fall gal when this is all said and done. She will then disappear as fast as she arrived having accomplished her mission.

    Her mi$$ion is to become the target of the electorates current and future anger. She is earning her salary and doing exactly what she was hired to accomplish. Thanks to her, our town politicians and managers will survive with their bounty and live to pillage another day.

    We are being prepped for the many more that will be forced to suffer in order to free up some more money. The people who created this mess and the ones in charge of finding a solution, they’ll be just fine. The game is fixed and they’ll come out of this unscathed while the “Assistant Town Manager Marianna Marysheva-Martinez” leaves the scene of the crime with her pockets full and most of the blame.

    A few years down the road and a couple of new taxes, it will be back to business as usual and just in time for the next taxpayers con!

  14. johndoeml April 12, 2012 at 7:56 am #

    I’m sympathetic to MMM. I think she’s doing what she can with a bad situation.

  15. Here We Go Again April 12, 2012 at 6:01 am #

    “Mammoth Town government has a long-term, structural, financial problem that will require more cuts. That’s what Assistant Town Manager Marianna Marysheva-Martinez said . . .”

    Of course it does, with parasites like the Tsarina who’s skimming $4,000 a week off the top while she flies around looking for a better deal at another gullible municipality – Tacoma last November and now Yakima. Her weekly rake would pay for 3-4 real employees; you know, the ones that she’s always attributing the Town’s financial losses to.

    And talk about losses, or is it losers. How about the seldom-heard and even more seldom-seen Town Manager who, at $200,000 a year, costs the Town more in pension and other benefits than any five of those greedy little union employees who are up for another 4.5% increase. 4.5% that they won’t get again, or that will be offset by more unpaid furlough days, or by a few more layoffs.

    Pretty soon there’ll be no one left at the Town offices except the Town Manager and his trusty Assistant, and that on the one day a month that one of them is around to tell Sierra Wave how bad things are.

  16. upthecreek April 11, 2012 at 9:48 pm #

    “Mammoth Town government has a long-term, structural, financial problem that will require more cuts.”

    No Way…Tell me it is’nt so.


    Fire them all and file already


  17. Jake April 11, 2012 at 7:38 pm #

    Fire Martinez TODAY! Talk about over spending…. She is ROFLOL all the way to the bank.

    • Tom April 12, 2012 at 7:09 pm #

      “Shooting the Messenger” is a phrase used to describe the act of lashing out at the
      Bearer of Bad News” ref. Wikipedia.

      Mariana, considering the circumstances. Thank you.

      • Rob April 13, 2012 at 7:30 am #

        What ever works and keeps the towns people comfortable and in denial. The government they elected is the government they deserve.

        From the outside looking in this is great reading.

    • Sierra Lady April 11, 2012 at 9:19 pm #

      ^ JD, now isn’t that interesting to learn about MMM?!

      Forgive me if this has been discussed elsewhere, but does anyone know when MMM went from being the TOML’s financial consultant to Assistant Town Manager? One of the local rags still calls her a consultant while the other calls her the Assistant????

      It doesn’t surprise me she is hoping to move on to “greener” pastures. Who would want to continue to work for the TOML if they didn’t have to?

  18. Ken Warner April 11, 2012 at 5:28 pm #

    Maybe start with the Assistant Town Manager position? Why do we need a Town Manager and an Assistant Town Manager in a 4 square mile town with 8,000 people? Might also cut the funding of the legal department given it’s performance history.

  19. Observer April 11, 2012 at 4:24 pm #

    Thanks, Benett.

    All this TOML secrecy needs to stop. It is outside of the legal process over MLLA. Now that the non-MLLA issue is finally front and center–at least on your website–how about TOML settling with MLLA and getting on with their structural crisis in public?

    The town council could meet next week and adopt a 5% amusement tax. (Most of the tax revenue would come from lift tickets.) That would bring in more than enough money to cover paying off MLLA over thirty years, especially if TOML could negotiate a better interest rate than what MLLA has already offered to accept. By settling with MLLA first, TOML can reduce its interest expense obligation to MMLA from 7% to perhaps 4% immediately–close to $1.5M a year. It would be both a start and probably the best deal to be had with MLLA.

  20. Tourbillon April 11, 2012 at 4:05 pm #

    This is what is playing out everywhere, or soon will be. Not even Helicopter Ben can keep printing Bernankes forever. The state is insolvent, the Town is bankrupt, and the most imaginative response by the federal and state executive branches is to stick it even more to “the rich”, the definition of which continues to shift downward as it must eventually to us, the middle class, which is where the bulk of the money is.

    Class warfare, satisfying as it is to some, cannot make unicorns exflatulate sunshine. We could confiscate every last dime of those dastardly one percenters and it would not make a dent in the train wreck of insurmountable debt caused by runaway entitlements and out of control public spending. Public services and the public sector are going to be cut deliberately or are going to get cut involuntarily, but get cut they shall, and all the transitory pleasure we derive from soak-the-rich schadenfreud is not going to change that one little bit.

    • dennis kostecki April 12, 2012 at 9:09 am #

      Most conservative criticisms about the ill-effects of taxes are exaggerated or untrue. Taxes are in fact good – they are dues we pay to enjoy the numerous vital benefits that government provides for our society.

      Personally I like my: Fire Departments, Police Departments, Public schools, Military, unemployment benefits, social services and welfare, transportation and transportation systems, Social Security, Medicare, Medicaid, Interest on the National Debt, Federal Highways, Veteran’s benefits, Health care research, Education Funding for Low Income K-12 Students, Pell Grants for Low Income College Students, Military Retirement Benefits, Environmental Clean Up (EPA), The FBI, Head Start, Public Housing, National Parks (Including Yellowstone), Drug Enforcement Agency, Funding for the Arts …

      In an election year when the going gets tough – the crazy turn professional.

      • Problem Solved April 12, 2012 at 5:54 pm #


        Go ahead and raise the taxes on the top 1%. I’m fine with it.

        Per the Congressional Budget Office it will generate a whopping 4.7 Billion per year.!!! WOW

        With our present budget deficits running over a TRILLION DOLLARS per year.

        It’s an absolute joke to think that would help solve any deficit problems.

        It’s a spending problem not an income problem.


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