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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Big AL
Big AL
10 years ago

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.

A brilliant idea?
A brilliant idea?
10 years ago

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.

Just the facts
Just the facts
10 years ago

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… Read more »

Big AL
Big AL
10 years ago
Reply to  Just the facts

Right on facts, I hear ya

SierraFan
SierraFan
10 years ago

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
John Barton
10 years ago
Reply to  SierraFan

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… Read more »

johnjcampnfish
johnjcampnfish
10 years ago
Reply to  John Barton

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

P&B
P&B
10 years ago
Reply to  johnjcampnfish

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”… Read more »

John Barton
John Barton
10 years ago

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!

Dingo
Dingo
10 years ago

Misery loves company.

upthecreek
upthecreek
10 years ago

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