theSheetNews.com

The Town of Mammoth Lakes is seeking input from residents and business owners of the Town through an online Resident Survey, available at:

www.surveymonkey.com/s/T6BMDGH.

The Survey seeks comments on the Town’s proposed Restructuring Plan, which calls for significant reductions in expenditures to help pay $2 million annually to Mammoth Lakes Land Acquisition (MLLA) and divert more than $111,000 annually to the Ballas entities (the Airport’s original Developer). The proposed reductions include the elimination of up to 13 Town positions, including up to 7 police sworn jobs, and discontinuing the Town’s 50% funding for the Whitmore Pool and Park.

Town residents and business owners are asked to complete the survey as soon as possible, but no later than the evening of Sunday, Oct. 21.

The Town plans to present the survey’s results at the Nov. 7 public meeting. If you have questions or experience technical difficulties email mllasettlement@ci.mammoth-lakes.ca.us, or call 760.934.8989, extension 223.

Who’s in charge around here, Al Haig?

Or to quote Casey Stengel, “Does anyone around here know how to play this game?”

On Wednesday, the Town of Mammoth Lakes issued a press release regarding a public survey it had posted online. According to the press release,

“The Survey seeks comments on the Town’s proposed Restructuring Plan, which calls for significant reductions in expenditures to help pay $2 million annually to Mammoth Lakes Land Acquisition (MLLA) and divert over $111,000 annually to the Ballas entities (the Airport’s original Developer). The proposed reductions include the elimination of up to 13 Town positions, including up to 7.0 police sworn jobs, and discontinuing the Town’s 50% funding for the Whitmore Pool and Park.”

An email which included the attached press release was sent to Lunch at 3:19 p.m. by Assistant Town Manager MMMartinez. Town Manager Wilbrecht was cc’d on the email.

Wilbrecht replied to the email at 9:19 p.m. Fortunately for Sheet readers, it appears Wilbrecht replied to all when he likely only meant to reply to MMM.

“Marianna, I got a very strong negative call from Matthew wanting to pull the survey. He got calls from John Urdi and others. I said I’d email you. I think we need to add options for comments and some other things. Please call me tomorrow morning to discuss.”

I suppose this is what happens when you have two Town Managers, and yet, neither one showed up at the office this week. Assistant Town Manager MMM worked from home in Southern California. Town Manager David Wilbrecht is on vacation.

Naturally, I got the email and rushed to my computer, hoping the survey was still posted. It was. There were the four basic questions that were asked. In the interest of brevity, I will edit the questions and possible answers down to their essence. After the question and possible answers from the survey, I will add my usual pithy commentary. The first question related to proposed police staffing cuts.

1.) Would you support raising new revenues, including options below? (If you are OPPOSED to cuts in the Police Dept., check all options that you would support. Otherwise, select “Not Applicable” only).

Answers to choose from:

-Not Applicable – I am not opposed to Police reductions

-Seek voter approval for a new admissions tax, which would be a surcharge on all lift ticket and other admissions, including event tickets

-Sales tax hike

-Parcel tax

-Establish a B.I.D. (Business Improvement District) to support tourism and air service, which would consequently free up money for police

-Utility tax hike

-T.O.T. hike

So you can see already why folks might’ve been irritated with the survey. If you opposed police cuts, you were given no alternative but to approve a tax hike. 

2.) Would you support making reductions to tourism, housing and transit in violation of tax measures A & T?

Answers to choose from:

-Charge a transit fee. This would allow the Town to reduce its $700,000 annual support for transit

-Reduce spending on tourism, which costs $2.2 million annually

-Reduce spending on Housing, which costs $300,000 annually

You can see why Mammoth Lakes Tourism Executive Director John Urdi would balk at how this question was framed. If you are only provided the option of cutting one of these three items, it would seem natural that folks would be inclined to pare the most expensive program. As Urdi said in a telephone interview Thursday, “We’re not looking to right-size things. We’re just looking to backfill things.

“And I didn’t see anything about cutting the Assistant Town Manager [MMMartinez] to realize a $300,000 savings.”

3.) Do you support the Town searching for ways to maintain its current level of service for police at reduced cost?

Answers to choose from:

-Yes, as an alternative to proposed cuts

-Yes, in addition to proposed cuts

-No, I do not

This is just a dumb question. Everyone’s always looking to get something for less – that’s a basic tenet of a market economy. But here’s the funny part – it’s not as if the Town has actually done any searching yet. When I spoke to Mono County Sheriff Rick Scholl on Wednesday, he said he has not been “approached in any way” by the Town regarding a possible contracting of law enforcement duties. 

Furthermore, said Scholl, “I wouldn’t [recommend] sign a contract that calls for less patrol staffing.” 

Scholl hadn’t crunched any numbers to determine whether or not the Town would realize any cost savings if it contracted with the Sheriff’s Dept. But in closing, he did say, “In Mammoth, people come to party. If you don’t have a police department, you’re taking a huge safety risk.” 

For kicks, I asked Mammoth Mayor Matthew Lehman in a separate conversation if the County had been approached regarding the contracting of law enforcement services. “Yes, [Town Manager Dave] Wilbrecht has had some conversations with them … Dave’s in constant communication with the County.”

4.) If you oppose the proposed elimination of the Town’s share of funding (50%) for the Whitmore Pool and Park to save nearly $120,000 annually, would you support using Measure R funds to help fund these programs at the current level?

Answers to choose from:

-Not Applicable, I am not opposed to the proposed cuts in funding to the Whitmore Pool and Park

-Yes, I’d support using R

-No, I don’t support using R, which could lead to closure of the facilities.

Only at the end was there a place to provide comment. And to proceed from one question to the next, you had to give an answer.

When reached for comment Thursday, Mayor Matthew Lehman took the hit for the survey as initially written, saying “My fault. I reviewed it and said okay.”

By noon Thursday, the survey had been amended so you didn’t have to choose an answer on the first two questions to proceed and comment space had been added.

When asked about the proposed police cuts, Lehman acknowledged that the Town could be in violation of its MOU (Memorandum of Understanding) with the Police Officers’ union if it eliminated sworn officer positions before July 1, 2013. “The department looks like it’s off the table [as far as possible cuts are concerned] until then,” he said.

The relevant sections from the revised MOU (in which the police agreed to modifications which resulted in a 23% cost savings to the Town and changes in their retirement plan) signed by Dave Wilbrecht and the MLPOA’s Paul Robles in June are excerpted below.

“For each budget year during the remaining term of this MOU, the Town will maintain the budgeted sworn officer staffing level that exists at July 1 of fiscal year for the duration of that year, and allow for hiring to maintain that level if during the applicable year staffing falls below that level. For clarity, that staffing level for the 2012-2013 fiscal year is 17 sworn officers. The foregoing staff maintenance provision is subject to the following exceptions: a) agreement by the MLPOA to a different staffing level; b) as a condition of a chapter 9 bankruptcy plan confirmation; and c) changes to this agreement agreed upon under the financial reopener in paragraph c4.”

C4: “The Town and the Association agree to meet and confer in good faith at any time during the term of the Memorandum of Understanding regarding potential changes to this agreement, if there is a material change in the Town’s revenues or expenses from the FTI long-term projections included as part of the Agenda Bill dated May 8, 2012.”

Apologies to all in that my story about the single family housing rental issue will be delayed until next week. Also, be advised that because Council is postponing its meeting until Thursday night, we will not go to press until that meeting is complete, which could result in a later paper delivery on Friday. Now from Kirkner:

By Allen Best

Pot ban a bust

WHISTLER, B.E. – Whistler’s mayor was among those calling for decriminalization of marijuana.

“It would be regulated,” explained Mayor Nancy Wilhelm-Morden. “Prohibition has been a failed policy, and the cultivation and trade of marijuana is in the hands of gangs.”

She said that the impact of gangs in the distribution of marijuana in Whistler has been minimal, but it’s quite another matter in other parts of British Columbia.

“We do know that gangsters do come to Whistler from time to time, but for those communities that have heavy gang influence, they’ve got a level of violence in the community that is simply unacceptable,” she said.

The mayor had voted for a resolution adopted by the Union of British Columbia Municipalities. Also voting for the resolution was a councilor from Squamish, a town down-valley from Whistler. He admitted to using marijuana for medicinal purposes, but wanted the conversation expanded to recreational use.

“Everyone is basically fed up. We have a law that doesn’t work.” She told the Pique newsmagazine the resolution was a good step toward forcing the conversation at the provincial and federal levels. “That is where it should be, but they just haven’t had the …courage to deal with the issue,” she said.

Ferment it and eat it

JACKSON, Wyo. – Michael Pollan, the author of “The Omnivore’s Dilemma” and other best-selling books, was in Jackson Hole recently to give a talk. He’d never been anywhere in Wyoming before, but was told that it was cold there, with long winters.

Given those long winters, should they eat fruits and vegetables when not much locally produced food of that sort is available, the Jackson Hole New& Guide asked him.

“Fermentation,” he answered. “We forget that people have dealt with these questions for thousands of years. Before refrigeration the way people ate vegetables in the winter was to put them up in the fall. That was how people got their vitamin C in the winter months. They didn’t ship in oranges.”

He added: “I’m not a fanatic locavore. I think there is a place for moving food around the country or the world. I just think we shouldn’t get in a position where we’re dependent on food from other places.”

Although not much of a hunter himself, Pollan told the News & Guide that he believes hunting is a “very important part of eating sustainably. Most of the animals we hunt, principally deer, have become pests, and their populations need to be controlled. And their meat therefore doesn’t have a big carbon footprint. It’s really solar-powered food. These are animals that eat in the wild.

“And then there’s also the added advantage that the hunter deals with the full moral complexity of eating animals. The hunter confronts that in a way that most of us don’t.”

Will airport economics work?

VAIL, Colo. – Almost from its opening in the late 1980s there has been talk about whether the airport at Gypsum, about 38 miles west of Vail, will accommodate international flights without stops along the way for customs.

That talk has become more serious in recent years, although no decision is pending, awaiting completion of a study. However, in interviews with the several candidates for Eagle County Commission, the Vail Daily finds everybody signaling support.

The most insightful comments, however, came from the lone incumbent, Jon Stavney: spending $3 million to build a custom facilities is not the real barrier. The question, he said, is whether flights from Mexico City (Toronto and Montreal are also possible sites of originating flights) will deliver enough passengers to justify the ongoing expense of federal customs officials.

Smartphones glitch WiFi

KETCHUM, Idaho – Ketchum has pulled the plug on its effort to have wireless interconnectivity throughout town. Not only was the WiFi system somewhat expensive to maintain and with large gaps in coverage, but it’s been bypassed by the rise of smartphones, which do not require a wireless network to access the Internet.

The WiFi system was installed after Allen & Co., the investment firm that holds the well-known conference at nearby Sun Valley each July, awarded a $100,000 grant. Maintenance costs for the city have been reduced to $17,500, but the coverage needed additional investment to improve signals. It is, city officials decided, time to move on, reports the Idaho Mountain Express.

Optimistic about hydrogen 

CANMORE, Alberta – Having made a fortune in oil and natural gas, Guy Turcotte is now pushing hydrogen and fuel cells as the wave of the future.

A native of Alberta, Turcotte founded oil companies, Chauvco Resource and Western Oil Sands, the latter of which was sold in 2007 for an estimated $6.6 billion. He is also chairman of Stone Creek Resorts, a real-estate development company in Canmore.

Turcotte was in Canmore to share his excitement about hydrogen and fuel cells. He’s also chairman of Western Hydrogen, a Calgary-based company that is seeking to develop and commercialize hydrogen manufacturing technology.

Turcotte, according to the Rocky Mountain Outlook, said the technology exists, and now it’s a time to scale up the infrastructure to accommodate it.

“They now have all the technical specs met. They just need volume,” he said. “There’s not a lot of hydrogen stations around here … but in countries like Japan (South) Korea and Germany, those guys are planning multi-service stations.”

Whistler has had 20 buses operated by hydrogen fuel cells since late 2009, the largest such fleet in North America. The short-term verdict is that they are responsible for far fewer emissions of carbon into the atmosphere.

Harder than anticipated 

TELLURIDE, Colo. – A developer of a 300-kilowatt solar array near the airport on a mesa above Telluride is having a hard time making the numbers work. The developer, Erdman Energy Enterprises, is seeking a power purchase agreement with the local electrical cooperative, San Miguel Power Association.

In an interview with the Telluride Watch, project manager Dirk de Pagter blamed limitations imposed by wholesale supplier Tri-State Generation and Transmission, which provides power to cooperatives serving Durango, Crested Butte, Winter Park and other more rural areas of the Rocky Mountains.”

Tim Erdman, the chief executive, said he wanted to demonstrate how simply a solar farm could be installed. “Somehow, I am demonstrating the opposite,” he told The Watch.

Renewable fund at $9 million

ASPEN, Colo. – In 2000, Aspen enacted something called the Renewable Energy Mitigation program, which was arguably the first carbon tax in the United States.

The program said that all new houses above 5,000 square feet or those with such amenities as snowmelt system for driveways, outdoor swimming pools and other big energy consumers in a cold climate had a choice. They could either provide renewable energy sources themselves, or pay into a mitigation fund.

That fund has now collected $9 million, and $5 million of it has been awarded to 80 projects in the Roaring Fork Valley, where Aspen is located. Those projects range from a car-share program in Aspen to a solar photovoltaic system at a building for non-profit organizations located down-valley in Carbondale.

Mammoth Lakes Town Council heard its first feedback from the public at its regular meeting Wednesday night in Suite Z regarding proposed budget cuts and policy changes necessitated as a result of the airport litigation judgment.

In short, the public is mixed about legalizing single-family home rental in certain residential neighborhoods, and strongly opposed to police budget cuts and a Whitmore Park and Pool closure.

According to Assistant Town Manager MMMartinez, the first $2.5 million payment to MLLA (Mammoth Lakes Land Acquisition) is due upon acceptance of the negotiated agreement by the courts and will be made by Dec. 31, 2012.

The first of 23 annual payments of $2 million each will be made on July 1, 2013.

So the Town needs to come up with $4.5 million over the next six months.

The first payment, said MMMartinez, will be cobbled together from various accounts, including approximately $100,000 from the almost-depleted Vehicle Replacement Fund, $700,000 from the last DIF account that hadn’t already been previously raided, more than $600,000 from the employee leave fund and $1 million from what MMMartinez said was budget surplus from FY 2011-2012 (which didn’t make sense to me because I thought they ran a huge deficit last year, but …)

When I asked her if tapping Measures R and U to make the initial payment was a possibility, she said yes, it was possible.

Police cuts 

This is what we know.

Lt. John Mair and Officer Jesse Gorham have put in their retirement papers.

As the sergeant with the most seniority, Marc Moscowitz would remain as the lone sergeant of the department and #2 overall behind Chief Dan Watson.

The two other current sergeants, Eric Hugelman and Paul Robles, would be reclassified as officers.

The five officers with the least amount of seniority would be laid off.

Officer Marty Thompson has applied for work at the Mono County Sheriff’s Dept.

Chief Watson said in an interview Wednesday that some of the other officers on the chopping block may catch on with the Bishop Police Dept., which he said is currently recruiting.

“Even officers who are not threatened with being laid off are looking [for work elsewhere], because they are concerned about the future of the department,” added Watson.

On condition of anonymity, one Mammoth Lakes Police Officer told The Sheet this week that Mammoth’s Council, by virtue of its proposed layoffs, has essentially “lost” the department.

Watson said if the cuts are made as proposed, the department would not provide a MONET (Mono County Narcotics Enforcement Team) officer, which could lead to the dissolution of MONET depending upon the commitment of the other agencies. MLPD would also eliminate the School Resource Officer position and see staffing decrease from four to two officers on busy weekend nights.

Another issue is that officers would be largely unsupervised, because the Chief and Sergeant would be mostly confined to completing administrative tasks on the day shift. Lack of supervision, in the long run, generally leads to problems, said Watson.

“The [decreased] level of staffing poses a genuine risk,” he said.

That thought was echoed during public comment by local resident James Hoodman. Hoodman, now turning his life around after getting out of jail approximately a year ago, said “These guys [police] are what slow me down.”

Hoodman predicted burglary, theft and gang activity would all increase if department staffing is thinned as proposed. “It’s gonna get ten times worse,” he said, “because even if I’ve changed my life around, there are a dozen out there who haven’t.”

Sal Montanez said that Mammoth Lakes has been a safe haven for those who have come from more urban areas with more criminal activity. He fears the haven may erode if Mammoth reduces its police presence.

Kate Page said that if Council follows through on this experiment, it is taking a huge gamble. Mammoth could lose its reputation as a safe and fun place. What you might save in expenses would be dwarfed by what you might lose in business.

Mayor Pro-Tem Rick Wood said the Town has always prioritized public safety, and that it has traditionally garnered the largest share of the budget. The real problem, he said, is not that we have too many officers, but that the officers we do have are paid too much. Should the compensation package be readjusted? he asked rhetorically. The police union doesn’t want to renegotiate its contract, and frankly, Wood doesn’t blame them. Who would give up the opportunity of retiring at 50 at 90% of one’s salary?

Wood pointed out that the MLPOA (Mammoth Lakes Police Officers Association) does have the unilateral power to reduce the number of cuts by voluntarily reducing its own wages and benefits.

Question is, why would police voluntarily make these reductions when the marketplace suggests police officers are in demand?

In a column that appeared in the Wall Street Journal on Friday, Sept. 28, Stockton, Calif. Town Manager Bob Deis noted that since 2009, Stockton, as part of an effort to get its fiscal house in order, has reduced its number of police officers by 25%.

The result? Stockton is now the 10th-most violent city in America. Rates of violence, according to Deis, are increasing by double digits each year. “We have the second-lowest police staffing levels in the country for a large city,” he wrote, “and often Stockton Police can respond only to ‘in progress’ crimes.

“Since reducing our compensation, we have already [additionally] lost 45 officers to other cities. We cannot just pluck people from the unemployment lines – the requirements to be a police officer are demanding and 99% of applicants do not qualify or, if hired, wash out,” he wrote.

The POST report 

Rather ironically, a Management Study conducted by the California Commission on Peace Officers Standards and Training (POST), which Police Chief Dan Watson commissioned in January 2011, finally came out last week on Sept. 20.

The report was written by Senior Consultant Joe Sampson.

Sampson included statistics in his report which showed Mammoth staffing levels compared to “what were believed to be the most similar agencies in California [i.e. departments that served a population of less than 15,000 residents that more than doubled in population during tourist season].” The selected comparable communities included Healdsburg, Morro Bay, Capitola and Pismo Beach.

Sworn staff per permanent population:

Mammoth 1:488

Morro Bay 1:572

Healdsburg 1:706

Capitola 1:452

Pismo Beach  1:350

Sampson recommended that Mammoth “employ no fewer than 17 sworn officers … and effectively freeze any changes to the current shift deployment until a service delivery plan with public safety goals and priorities can be created.”

Whitmore 

Several community members voiced objection to the closure of Whitmore Pool, particularly local resident Lisa Okamoto, President of the Mammoth Lakes Swim Team.

Okamoto said the team had 90 swimmers last year.

She noted that Whitmore is the only municipal pool in Mono County. She also said it is an invaluable resource to the local Husky Club, so kids who might not normally be able to get swim lessons have the opportunity.

Okamoto said she was told by Mono County Finance Director Brian Muir that the county and town split the pool cost 50/50. Her query: If the county keeps up its half, even if Mammoth reneges on its half, can the pool be operated at reduced hours?

She also asked about the possibility of using Measure R funds to support the pool.

Mayor Matthew Lehman said that using R to support the pool would represent a clear “supplanting” issue.

“Do we touch the tax measures or not?” This is what we want to hear from the public about,” said Mayor Pro-Tem Rick Wood.

Okamoto doesn’t care whether it’s supplanting or not. “I thought [when I was voting for R] what I was voting for was recreation.”

Parent Erin LeFrancois urged the Council not to go backwards when it comes to parks and recreation offerings. Don’t balance your budget on the backs of kids who had no part in any adult-botched litigation was her message.

Mel Seator said the Town needs facilities to attract and keep families who wish to live/move here.

SFR rentals 

The other issue which garnered the most attention was Council’s trial balloon regarding the rental of single family homes.

Proponents suggest this is a way of generating additional revenue. David Page, who started a website www.mammothvhr.org (subtitled “Why allowing short-term single family home rentals makes good sense for Mammoth”), said many of our peer resorts have studied this issue, implemented it, and realized significant additional revenue.

Opponents say it will ruin neighborhoods, and generate far more unintended consequences than revenue.

As Gary Thompson said via telephone Thursday, the effect of legalizing SFR rentals is creating a “boutique hotel” on every lot in Mammoth.

A position paper supported by John Vereuck, Gordon Alper, Tom and Kathy Cage, Tom and Teri Stehlik, Lanie Somers-Standifer and the Thompsons said such a change would increase property value for homes and decrease property value for condominiums. “No local will ever be able to buy another house.”

The change would undermine the Town’s General Plan vision, undermine quality-of-life and reward people for heretofore illegal behavior,

Somers’ suggestion: “If we police our neighborhoods and respond to complaints about transient occupancy we will drive the revenue back into the areas where we have planned for it and the TOT will be realized.”

The Sheet promises a more thorough examination of this thorny issue next week.

By Allen Best

Hydrogen buses test well

WHISTLER, B.C. – The 20 buses in Whistler powered by hydrogen fuel cells are about halfway through their five-year pilot phase. Despite minor problems, the experiment is working out well, officials tell Pique Newsmagazine.

One complaint is that the hydrogen is manufactured in Quebec. Even so, it represents a 60 percent decline in emissions, a reduction to be increased further with completion of a sodium chlorate plant in North Vancouver in 2013. Local emissions from the buses, of course, are virtually non-existent: Just a few drips of water coming out the tailpipes.

Flags over Grand Lake

GRAND LAKE, Colo. – If Aspen can have a festival focused on macaroni and cheese, why can’t Grand Lake, the town located at the west entrance of Rocky Mountain National Park, have a week-long celebration of the signing of the U.S. Constitution.

The Sky-Hi News says the festivities include a “patriotic parade, plenty of flag-waving, a Constitution trivia contest, and more. The event was capped by what was called the Forefather’s Fireworks Extravaganza, which seemed to offer a good excuse to set off the fireworks that couldn’t be used on July 4, when fire danger gripped Colorado.

Vail hustling for summer biz

VAIL, Colo. – Vail is boosting its budget to market its allures to the outside world for next summer by 8 percent, to $2.57 billion.

The Vail Daily says that the Vail Local Marketing District wants to grow the percentage of out-of-state business from 56 to 60 percent of the total, and to bring back more international visitors during summer. The share of summer guests from international locales dropped by half from 2010 to 2012.

Colo towns explore air link

CRESTED BUTTE, Colo. – Telluride wants Crested Butte to pool resources to draw in a new low-cost air carrier to deliver visitors to both resorts from the Phoenix and San Francisco areas.

Planes by the airline, which hasn’t been identified, would land at Montrose, which is already the primary portal for visitors to Telluride, about an hour away. Crested Butte is two hours distant.

To make the deal work, the two resort communities would have to scrape together a minimum of $650,000, maybe $1 million, to market the flights, explains the Crested Butte News.

There is some concern as to whether the flights would have the 90% load factors that are predicted as another matter. Flights to ski markets average 60 percent, according to flight consultant Kent Meyers, and he points out that the originating airports would be in suburban locations. The airport that would serve the Phoenix area is 45 minutes away from the major Phoenix airport.

Bike race has wheels

ASPEN, Colo. – After two years, the U.S. Pro Cycling Challenge appears to have strong wheels. But Aspen is somewhat worried about the financial commitment of hosting the event, tabulated at $1 million this year, although offset by increased lodging and spending by visitors.

The fallout: Restructuring plan will gut Police Department 

On Thursday, the tsunami debris from the proposed airport litigation settlement with MLLA (Mammoth Lakes Land Acquisition) finally reached Mammoth’s shores, and 13 more Town employees now face elimination, including seven police officers (one lieutenant, two sergeants and four patrolmen).

But first, let’s back up. The Town announced its deal with MLLA last Friday, after both weekly newspapers had come out. The basic terms: $48.5 million to be paid over 23 years to MLLA, and another $3.4 million to be paid to Terry Ballas over the next 30 years to finally solve all possible lingering legal entanglements from the infamous 1997 Hot Creek Development Agreement.

At Thursday night’s Special Town Council meeting in Suite Z, Bankruptcy attorneys Ken Klee and Michael Tuchin and Mediating Judge Elizabeth Perris (appearing via videoconference) explained to a standing-room audience why they believed the settlement deal was a good one for the Town.

But before that, they made sure to spend a proper amount of time fawning over their employers (Council), the judge and themselves.

Some choice samples: “Fortune smiled on this town when Elizabeth Perris was appointed [as mediator].” -Ken Klee.

“This settlement itself is a fantastic solution for this town.” -again, Ken Klee, who just happened to negotiate said settlement.

Tuchin characterized the process as “exhausting” and “grueling,” which is how I would feel if I were making $1 million a month publishing this paper. Instead, I listen to this crap and wonder why I didn’t go to law school.

Even Judge Perris got in on the act. Her phrase was “Herculean task.” She also took credit for making the recommendation which ultimately broke the stalemate and led to a settlement.

Do I hear a faint cry from the bleachers? Per-ris! Per-ris!

Imagine, all these egos on display and Rick Wood hadn’t even spoken yet.

Okay, okay … back to telling it straight – or maybe trying to read between the lines, because now we’re onto the editorial page.

From Michael Tuchin’s testimony, it appears as though the Town’s lowball offer in its initial bankruptcy plan (offering about ten cents on the dollar, or approximately $550,000/year for ten years), was not going to play in front of Bankruptcy Judge Thomas Holman, a real stickler whom Tuchin described as “wedded to due process.”

In a separate interview Wednesday afternoon, Town Manager Dave Wilbrecht told The Sheet that “We couldn’t read the Judge [Holman] well enough to know how it would’ve gone.”

Wilbrecht also said that Judge Perris saw two fairly serious flaws in the Town’s plan: 1.) CalPERS. 2.) She felt the Town had the money to pay.

According to Wilbrecht, CalPERS isn’t letting anyone off the hook (Stockton, San Bernardino, et. al.) because it’s leery of a domino effect. Let one entity wriggle out of its pension obligations and you’ll see a mad rush for the door. Wilbrecht suggested MLLA would’ve pulled CalPERS into the fight and we would’ve been even more outgunned.

As it was, the Town’s “burn rate” since declaring Chapter 9 has been about $1 million monthly, and it would’ve cost the Town another $2 to $5 million just to find out whether or not it was bankruptcy-eligible if it hadn’t settled.

Overall, Assistant Town Manager MMMartinez said the Town has spent $8.5 million on lawyers and professionals since the initial judgment was made against it in Mono County Superior Court in April 2008. She estimated we’ve spent $4 million since March of this year.

Prompting Paul Rudder to turn to me and deadpan “If they [Klee and Tuchin] do anything more to save the town money, we really will be bankrupt.”

Before public comment, each Town Councilmember had a say, each say a reflection on their personality. Eastman pointed to all the instances where Mammoth has dug in and pitched in to make itself a better community. As far as he’s concerned, we’ve done it [rallied] before and we’ll do it again.

Wood said the elephant in the room was based on two questions: 1.) How did this happen? 2.) Who’s to blame.

He then went into a long disavowal of his connection to anything, particularly the connection of that long and winding six-foot trunk stuck to his face.

He did, however, make sure to link his name to Mayor Matthew Lehman’s at every opportunity.

Lunch aside: I agree with Wood in that blame does little good and doesn’t move us forward. But even a half-ass “I could’ve done a few things differently” might be nice. You’re about to see 13 more people lose their jobs and the community’s about to lose Whitmore Pool and Park – a contemplated casualty in the draft restructuring plan. If pinning that tail on some donkey (and it’s just an analogy. Don’t be so thin-skinned. I’m not calling you an ass) will make ‘em feel better, be that donkey. 

And from Geisel’s desk … 

Several points and questions were raised during public comment on the Restructuring proposals, one of which was could Ballas come back and sue the Town again? Klee responded that the slate would be clean, and Ballas could only sue if there was a breach in the payment plan going forward. However, he also said later that if there was a shortfall in a payment, for example if the Town were only able to pay $1 million of one of its scheduled $2 million payments, a provision in the deal would mean Ballas could take the payment and the balance due would accrue at 7% interest until paid off.

John Wentworth suggested Council might want to consider priorities, such as whether it wants to pay off the settlement in 7 years or go the entire 23-year distance. Lehman agreed with that idea, noting that the interest is front-loaded, and it might be worth exploring what it might take to get rid of that early, in four years perhaps, and then start knocking down the principal.

Joe Mueller said he is concerned about cuts to the Police Department, but added that, “If we want things, we have to budget for them.” He also said that with 13% [T.O.T.] tax rates, the Town has enough of those, and he doesn’t favor anymore borrowing and then having taxpayers enact more measures to pay for it. Councilmember Wood agreed, saying he’s been of the position that taxing isn’t realistic, calling it a hindrance and not something Council wants to pursue.

John Walter cited the conspicuous absence of one of the airport debacle’s players, MMSA CEO Rusty Gregory. He asked if MMSA was aware of the settlement agreement and planned to participate. Lehman replied that Gregory and MMSA have been briefed on the settlement, but were not privilege to any of the negotiations.

“They’re learning about it the same as [the public] is,” he said. “We had to keep them in the dark about it the same as we had to keep the public in the dark.” He added that MMSA is not in favor of any imposed tax on lift tickets and the like. “They didn’t take that too well,” Lehman related. He did say MMSA indicated it MIGHT support a voluntary tax if were temporary, but didn’t elaborate on what sort of tax might warrant any consideration.

One of the most pointed observations came from John Vereuck. He criticized the “restructuring” as being little more than “cost-cutting,” pointing out that earlier in the Town’s existence, it ran with just 50 staff before ballooning to 130 employees at its peak five or six years ago. He also cautioned Council against talking about passing a tax. “No one’s got the stomach for that,” he said, garnering some applause for suggesting term limits on Council seats.

Dieter Fiebiger was worried about the 47% cut to the Police Department, but even more worried that he’d be 103 by the time the settlement is paid off! Meanwhile, after the meeting, MLPD Chief Dan Watson said he’s going to be trying to get his head around being 24% of the budget, but taking 47% of the cuts, and trying to come up with more ways to shore up both his staff and line item.

Wood indicated the Chapter 9 filing was good at least as a maneuver, one of the few moves the Town’s made during the past few years that’s worked. “The value of Chapter 9 was that it brought MLLA to the table,” he said. He also said he hopes that the soon-to-be-nullified DA would soon be used to attract industry [to the airport property] that’s suitable to the FAA … “and NOT housing.”

Before adjourning, Lehman apologized to the citizenry for the actions of Councils and staffs past. “Every time I drive by the airport, I wonder how we as a Town ended up owing $30 million on property that’s been unchanged since the beginning of time … with no tangible improvements, no structures,” he said in Council remarks. “It leaves me angry and frustrated. It’s a tough pill to swallow. I wanted the number to be a lot closer to zero.”

He concluded by wondering, “Is this legal justice, or a victory of sheer greed?”

The Town is scheduled to appear in Bankruptcy Court on Oct. 19 to seek approval to begin the process under which it would execute the terms of the settlement. Next step from there would be petitioning the court to modify the Writ of Mandate down from the previous amount of $43 million to the settlement amount of $29.5 million. From there, the Town would go before Judge Thomas Holman to have the Chapter 9 filing dismissed, which would likely occur sometime in November.

Council is expected to approve a final list of employee cuts and reductions by its regular meeting on Dec. 5 in order to allow sufficient time to implement layoffs.

For more coverage of this story, see Geisel’s piece on community reaction, and also the text of Councilman Michael Raimondo’s letter.

People are happy it’s over, if not about the terms 

Last Friday, the Town of Mammoth Lakes announced the terms and details of its $29.5 million settlement with Mammoth Lakes Land Acquisition (MLLA). Since then, locals who had read it online exhibited a wide variety of thoughts on the terms details. One detail that stuck out to local Bob Solheim: when the Town chose to release it:

“I was surprised at how many folks didn’t even know the PR was out,” he said. “The timing the Town used skipped an entire news cycle, and people read the newspapers here, they just do. The Town effectively seemed to black out a lot of people from knowing about it and possibly attending Thursday night’s special meeting.”

Solheim said he is happy to have closure, and thinks the Town is trying to put the best face on a horrible situation, but called the $2 million annually over 23 years payment scenario “quite a millstone” around the Town’s neck.

“Industry has been reducing its budgets, and I’m not downplaying the amount the Town needs to cut … it’s a lot, but it should be able to take a 10% reduction even after all the previous cuts, and still remain effective,” he said. “Reorganization, outsourcing and having the unions bid to compete … all those are the right things to do.” What isn’t the right thing to do, he countered, is suggest the public tax itself to help pay the judgment. “I have no support for taxes, and I hope the Town has the good sense not to use cuts to the Police Department and so on as leverage to help sell the public on a tax increase,” Solheim said.

Neal Levin, a Mammoth resident with extensive accounting experience, said he’s glad a settlement was reached, but cautioned, “We’ll have to wait and see how the town funds these payments…who loses their job, what services are cut, etc. before we can say the deal was a good one.” Levin said he’d like to see whether the Town has any legal recourse against those originally responsible for the debacle. “If not, at least those responsible should no longer hold office in this town or be ‘consulted’ in the future on ANY town business.”

Don McPherson pointed out that the settlement figure is almost identical to a proposed offer of $29 million that had been rejected earlier by the Town. “Now we’re right back where we started a year or so ago, and we spent hundreds of thousands or millions of dollars to get here,” he said. McPherson is also critical of one of the settlement’s restructuring pitches, which involves, “Creating opportunities for the public to be more involved in government by establishing a far-reaching volunteer program, with opportunities in areas such as customer service, visitor services and neighborhood patrols.”

“I’m not going to volunteer to jump on a snowplow,” he said, railing against levels of service that could be gutted to unworkable extremes. “As a taxpayer, why should I?”

A “taxing” thought …

The Town has suggested the public may wish to enact some form of tax to help pay down the settlement. This has met with stiff resistance.

Locals Diane Eagle and Mary Canada both said they are “opposed to any new taxes,” no matter what form they might take. “I’ll fight that,” Eagle firmly stated. “They got themselves into this, let them get themselves out of it. Don’t look at us [taxpayers].” Ann Gimpel’s comment also was even more direct in terms of taxes: “No taxation without representation. Sound familiar?”

Greg Newbry, however, said he was in favor of a specific type of taxation to help remedy the situation. “I’m for a south county sales tax increase in addition to perhaps a recreation tax; we need this to go away,” he wrote in. “For Mammoth to succeed, we need to get this problem behind us.”

Second homeowner and multiple property owner Peter Dach, who urged Council last week to take its chances in front of a bankruptcy judge, was apparently queasy upon learning of the settlement. “$48.5 million? That is a good deal?,” he asked rhetorically. “[I want to know] what is the real story … pensions, salaries, pictures of someone with farm animals? I’m nauseous.”

A few locals summarily blasted the judgment. One business owner called the settlement “horrible” and said, “[Council] sold us out.” Another went so far as to call it “completely (colorful expletive) up.” Suggestions for how to obtain the $2 million annually ranged from turning over the Police Department to the Mono County Sheriff’s Department to giving Ballas and MLLA deeds to the municipal park and ride lot and the Bell Shaped Parcel, and “telling them to hit the road.”

Linda Wright reserved most of her comments for now, but didn’t seem to be too keen on the final figure. “Wow … $29.5 million! And I thought my daughter’s wedding was expensive!”

Optimists club?

Russ Norton, who was involved in the airport in the 1990s as a member of the Airport Advisory Committee, said there were a lot of “ignorant, arrogant mistakes” made by the Town staff and Council at the time. Today, he’s pragmatic about the settlement. “Nothing’s going to change anything; it’s over, let’s go on and drive forward,” he said. “What we have is what there is … we’ll survive. The Town’s made cuts and I haven’t realized any hardships. There might be some changes, but it will all be okay.”

Contractor Tim Flynn said he had some reservations initially, but seems to share Norton’s cautious optimism. “As for the settlement, what is 98 cents on the dollar? That’s what we ended up with, basically,” he posited. “We just came up $2 million short in our budget and now we’re adding another $2 million. How do we come up with that? It’s simple math, but it doesn’t add up.” The thing that has irritated him since the beginning of the MLLA negotiations: “The veil of secrecy. We had this confidentiality agreement with MLLA, and there was this sense that it was the unions getting in and trying to save entitlements, at the expense of fiscal responsibility, and small business and the taxpayers.”

Flynn went on to say that he’s also glad it’s finally over. “I’m preferring to stay positive about it. “We’re moving forward. I’m confident we’ll find the money and get it done. In five years, we won’t be talking about it anymore.”

He also thinks the public needs to take into consideration some of the many “variables” in play during the negotiations. “I don’t necessarily fault Council,” he added. “They had to deal with … lawyers, a bankruptcy judge … they were under a lot of pressure over details we can’t imagine. It wasn’t easy for them. We had to appoint a Council member by default, nobody wanted to run, that’s how bad it was. We gotta cut them some slack.”

And Flynn’s also of the opinion that Chapter 9 wasn’t the way to go. “I’m not a fan of bankruptcy. If I ran the Town as a business, I wouldn’t want a Chapter 9 on my record,” he said. “It reflects on people personally, as individuals, and I don’t think we want to risk that as a town at that level.”

Mike Coco is of a like mind. “I’m happy it’s over and done. I might not like [the settlement] entirely, but sometimes we have to do things in life we don’t like in order to move forward,” Coco opined. “As my mom used to say, we have to learn from our mistakes.” He is, however, not a fan of the community enacting any new taxes to pay it down. “No. Not interested,” he stated. “Let the Town figure out how to do that for themselves. The public and local businesses have enough on our plate to deal with.”

Mammoth resident Pam Basso is another local happy the settlement’s over. She’s also not too sullen on the terms. “I think we made a good deal. It was $44 million plus, so it could have been worse,” she opined. “The whole town has been dragged through this for so many years. Time to look ahead and get on with our lives.”

Basso also expressed relief at the Town’s decision not to pursue Chapter 9. “I worry about what it would do to investors who have been hesitant to come here, in part because of what a bankruptcy might have meant to property values, which don’t need any more problems.” She agreed with Flynn that perception could have a significant impact on future business and tourism. That said, she also suggested it might be time for other changes. “Now we just need to start over with a whole new Town Council,” Basso added.

Clint Hyde posed a pointed question to the Bridgeport community that harkens back to the award of $30 million, made by a jury in a Bridgeport courtroom, by a predominately north county jury. “How do the folks in Bridgeport who awarded the judgment feel about us now? I’d really like to know,” he queried. “Are they happy about the settlement? Did we have this coming to us? Or do they feel sad? ‘Gee, we’re sorry, we didn’t mean for it to go this far?’”

Hyde also protested MLLA’s ability under state law to buy the rights to the judgment, which he suggested was akin to gambling in Vegas. It might be legal, he acknowledged, but added he personally finds it “immoral.”

Mammoth Lakes Mayor Matthew Lehman opened Wednesday’s Town Council regular meeting by saying he’d hoped to have something to tell the public about the airport litigation settlement. Alas, Lehman says there are Is and Ts left to be dotted and crossed, and thus there would be no announcement. (Editor’s Note: Since this meeting, an announcement about the settlement has been made, which you can read by clicking here.)

The announcement of a lack of an announcement didn’t sit well with second homeowner Peter Dach, who drove up five hours from Los Angeles to comment before Council. Dach had a letter read into the record beforehand, taking issue with the Town’s decision to settle and not pursue Chapter 9 Municipal Bankruptcy as an option.

During Public Comment, Dach charged that the community has a right to know what Council and Town Staff are doing, and asked them to come forward with more information. “If [the settlement] isn’t an astounding deal for the community, it’s a bad deal,” he told Council and those in Suite Z. Lehman and Town Attorney Andrew Morris explained that the terms can’t be disclosed and that the Town is bound by a court-ordered mediation process and confidentiality agreements with MLLA. “It’s a very complex situation,” Lehman said.

When Dach asked about how any settlement would be funded, Morris advised against answering that as well. “It’s not possible to explain where the money comes from without divulging some of the terms,” Morris said.

“You’ve already spent millions and I’m concerned that the deal is not as good as it could be,” he said, saying he thinks the Town would be better off “taking its chances in front of a bankruptcy judge.”

R, U process update

Whether or not the Town taps Measures R & U (voter-approved special tax measures supporting parks, trails, recreation, and arts and culture events) to pay off the judgment still remains a big question mark.

Council and the Recreation Commission met to review the application and awards processes for both measures. Synching them up to run on parallel timelines apparently is on hold, as is a Measure U feasibility study. Lehman, who also serves on the town’s multi-jurisdictional Economic Stimulus Council, said the study needs refinement. “It became too big and ran away with itself, and kind of overwhelmed the consultant,” he explained.

Measure U will not have a fall awards cycle, in that a $325,000 air service subsidy loan taken out against remaining and projected funding has left a negative $264,000 balance.

Council directed staff to convene the Measure U Application Committee to draft a new timeline for a spring award, and determine an award amount (cap) for appropriation. The timeline is expected to go back to Council in November.

“There is still some room to move on U,” Recreation Commissioner Bill Sauser said, noting that some items, such as $20,000 for maintenance of the Whitmore Track project, which is still under Phase 1 construction, probably won’t be needed this year.

Altis entitlement 

And Council granted the Alits development in the Bridges Switchback above Lake Mary Road a District Zoning Amendment, Vesting Tentative Tract Map and Variance, the first ones approved this year, to allow single-family homes to be built, in addition to the four existing townhomes and duplexes. Speaking for Mammoth Mountain Ski Area, the developer, Jim Smith said Altis already has interest in five lots for single-family homes. Councilmember Jo Bacon supported the variance, calling it a “creative solution” to the problem of how to make the project more saleable, while keeping it within the project’s established density.

The following is the formal press release from the Town of Mammoth Lakes regarding the terms of its settlement with Mammoth Lakes Land Acquisition:

Following up on their announcement of the signing of a term sheet on Aug. 21, the Town of Mammoth Lakes and Mammoth Lakes Land Acquisition LLC (MLLA) jointly announced today the settlement’s specific terms, executed by parties on September 20, 2012. Also parties to the settlement are the Airport Developer, Terrence Ballas and his related development entities (“Ballas entities”). The settlement amount is $29.5 million, substantially less than the $43 million judgment held by MLLA against the Town. Since the Town does not currently have available funds to pay the full $29.5 million to MLLA right away, the settlement gives the Town an option to pay over time, starting with approximately $2.5 million downpayment upon dismissal of the Town’s chapter 9 case, and additional $2 million payments annually for 23 years.

The Town can prepay at any time, without penalty, by seeking outside financing for the settlement. If the Town is unable to find such financing and instead follows the 23-year payment schedule provided in the settlement, it will pay the equivalent of a fixed 5.17% interest rate on a principal obligation of $29.5 million. (5.17% is likely lower than what the Town could otherwise get in an open market today.) Under this long-term financing option, over the course of 23 years, the total amount paid would be $48.5 million, including financing charges. For comparison, if the Town were to finance the $43 million it currently owes to MLLA, on the same terms, it would pay nearly $71 million over 23 years at a fixed 5.17% interest rate.

Additional terms of the settlement, the Town’s rationale for settling, and the Town’s plan to finance payments are discussed further in this press release. The Town will hold a series of public meetings to review the settlement documents, answer questions from the community, and begin a dialogue regarding the Town’s plans to reorganize its operations in order to become more creative, effective and efficient, and afford the long- term settlement payments. The first of such meetings has been scheduled for Thursday, Sept. 27, at 6 p.m., in the Town Council Chambers.

The settlement is the outcome of the U.S. Bankruptcy Court’s mandated mediation, led by U.S. Bankruptcy Judge Elizabeth Perris and lasting August 6 through the execution of the settlement. It leaves behind history that began with the Town entering into an Airport Development Agreement with Developer Terrence Ballas in 1997, continued with Ballas transferring the hotel/condominium portion of the agreement to MLLA in 2004, MLLA subsequently suing and obtaining a legal judgment against the Town for $30 million that has grown to $43 million with interest and MLLA’s unpaid legal fees, and eventually resulting in the Town filing for chapter 9 bankruptcy protection in July 2012.

The settlement avoids what would otherwise be heavily litigated, expensive, and highly uncertain bankruptcy proceedings, and becomes effective upon dismissal of the Town’s chapter 9 case. The settlement calls for MLLA and the Town to jointly seek an amended writ of mandate from the State Court (in Mammoth Lakes), and for the Town to end its Chapter 9 bankruptcy case upon the State Court’s approval of the amended writ. The parties anticipate that the necessary actions by both the State and Bankruptcy courts will occur by Dec. 31.

Settlement terms

Below are the settlement’s key terms:

1. The amount of the settlement in current terms (the Net Present Value) is $29,500,434. If the Town had funds to fully pay MLLA on the date the settlement is approved, it would write a check for $29,500,434.

2. Since at the moment, the Town is not able to pay the entire $29.5 million, the settlement provides for a 23-year payment term, the equivalent of financing at a 5.17% fixed interest rate. Under this financing option, the Town will pay to MLLA $2,523,286 following dismissal of the Town’s chapter 9 case by the U.S. Bankruptcy Court. The Town will then make annual payments to MLLA of $2 million, with the first payment due July 1, 2013, for a total of 23 years.

3. The Town will pursue efforts to raise funds to prepay the MLLA obligation through borrowing, and will work with both institutional and individual investors. The settlement does not call for any new taxes. However, the Town expects to engage the community in a discussion of whether a new tax should be raised with voter approval, to help pay off the settlement early.

4. Also parties to the settlement are the Ballas entities, the developer group holding commercial development rights under the Town’s 1997 Airport Development Agreement and associated leases. The Airport commercial development has been put on hold since legal issues with MLLA emerged over the hotel/residential portion, and the Ballas entities have since asserted various contract breaches by the Town, which the settlement will address. As part of the settlement, the Ballas entities are transferring to the Town immediately the water system that supplies water to the airport and its related operations – a critical asset that is important for the Town to own and control.

5. Some of the leases that were approved as part of the Airport Development Agreement in 1997 – mainly the hangar leases – generate income to the Town and the Ballas entities, with the Town currently receiving approximately $111,000 annually. These long-term leases generally have 37 years remaining on their term.

6. As part of the settlement, the Town will reassign its portion of the annual hangar lease revenues (currently $111,000) back to the Ballas entities for 30 years. After 30 years, the Town will resume receiving the revenues until the leases expire. In addition, following dismissal of the Town’s chapter 9 case, the Town will pay the Ballas entities $50,000, with an additional $50,000 within one year of case dismissal.

7. The net present value of the reassigned lease revenue is $2.5 million. In return for this reassignment, the Town will receive the following:

a) The Airport Development Agreement and remaining long-term leases for retail, restaurant, recreational vehicles, a general aviation terminal, and a gas station will be cancelled. The Ballas entities will forgo their rights under the Development Agreement, and the Town will no longer have any associated obligations (such as related to minimum investment in and improvements to the airport, approval of freeway signs, and so on).

b) The Town will be getting back its land currently encumbered by the Development Agreement and the terminated leases, and will be free to use these lands to pursue a C3 compliance level for the Airport, as well as offer land for expansion or relocation of appropriate businesses.

c) The Town will own and control the airport water system.

d) Ballas and his related entities will waive any and all claims that they have against the Town for any alleged breaches or non-performance. If not waived, these claims could lead to another multi-million dollar legal judgment.

The Town will soon publish all of the relevant settlement documents on the Town’s website.

Rationale for Settlement

The Town, including its elected leaders, management, legal counsel, and financial advisors spent countless hours over many weeks on an extensive analysis of the costs and benefits of the settlement versus staying in bankruptcy, as originally approved by the Town Council with a proposed payment of $6 million. The more the Town has learned about Chapter 9 bankruptcy and strengths and weaknesses of our particular case, the more evident the risks and costs became. More detail is provided below:

1. There was a possibility that the bankruptcy judge would find the Town ineligible for Chapter 9 relief, or would not approve our proposed debt restructuring plan. It became clear that the Town would be required to increase financial support for its litigation efforts in order to try to win eligibility and plan confirmation. These increases were estimated between $2.5 million and $5 million. Without a massive cash infusion (and, quite possibly, even after spending additional millions), there was a strong potential for a dismissal of the Town’s bankruptcy case by the bankruptcy judge. This would immediately make the Town subject to the $43 million State court writ, ordering the Town to pay the $43 million immediately, or request a 10-year payment term (resulting in approximately $6 million annual payments for 10 years, after applying the 7% interest set by California State law). The Town simply cannot afford to pay $43 million immediately or $6 million annually.

2. A prolonged legal battle with MLLA and other major creditors was anticipated in the bankruptcy court. Such a battle would require spending millions of dollars in legal fees, with a very uncertain outcome as to the eventual payment to MLLA.

3. Even if the Town eventually received the U.S. Bankruptcy Judge’s approval of its debt adjustment plan, a payment to MLLA under that plan would likely be similar to the $29.5 million negotiated under this settlement. And even then, the Judge’s decisions could have been appealed by MLLA and others, resulting in yet more litigation and additional cost.

4. To finance litigation and eventual payment to MLLA, it was likely that the Town would be forced to use high-priority but discretionary spending sources such as Measures A and T, which currently fund tourism promotion, housing and transit programs.

5. The uncertainty of the ultimate decisions by the Federal Aviation Administration and/or the State Department of Transportation regarding the remainder of the Airport Development Agreement posed great risk. The Development Agreement, signed by the Town in 1997, still requires major approvals, including an environmental study, the access road extension and other onsite improvements.

The Town concluded that the settlement, including prompt dismissal of the bankruptcy case, was in the best interests of the Town. There are multiple benefits to the Town of this settlement:

1. The settlement provides certainty on the amount to be paid by the Town to MLLA and Ballas entities, and the duration of such payments; no such certainty could be possible in the context of a heavily litigated Chapter 9 bankruptcy case.

2. The settlement, at its current present value of $29.5 million, is considerably less than the $43 million that the Town currently owes to MLLA under the legal judgment. The Town could raise funds and pay off MLLA immediately by writing a $29.5 million check. Alternatively, the Town has 23 years to pay $2 million annually, reflecting the equivalent of a loan with a 5.17% fixed interest charge, which is likely lower than what the Town could currently obtain in an open market. The Town could also prepay at any time during the 23-year financing term, if it has sufficient funds. Partial prepayments are also allowed, as low as $250,000 in any given year.

3. It provides for payments over the course of 23 years – far longer than the 10-year period allowed under the State law.

4. It amicably resolves potential disputes with Ballas and the other DA Creditors with respect to the Development Agreements and related contracts and leases that were not assigned to MLLA.

5. The Town will be getting back numerous property and development rights, as well as the water system, as a result of the termination of the Development Agreement and certain related contracts, and these recaptured rights have both financial and strategic value to the Town.

6. The settlement avoids the cost, delay, distraction, and risk that would accompany extensive eligibility and plan confirmation litigation and permits a prompt dismissal of the Town’s Chapter 9 case, further limiting costs.

7. A number of settlements reached with third parties during the pre-bankruptcy mediation process are contingent on effectuation of a plan of restructuring or a settlement with the Ballas entities. The settlement with the Ballas entities will result in the Town receiving the benefit of those third-party settlements.

Town’s Restructuring Plan

During the next few weeks, the Town plans to meet with its employee groups to discuss ways to dramatically restructure its operations and provision of services. This will be a part of an effort to move to an innovative and collaborative model that reduces costs, engages other governmental agencies, volunteers, local non-profits, and the private sector. The Town’s plan includes talking to employee groups and evaluating the following options:

1. Contracting out some of its services, to other governmental entities, non-profits, and/or the private sector.

2. In collaboration with neighboring entities, such as the school district, the hospital, the fire district, ESTA, Mono and Inyo counties, exploring opportunities to create economies of scale in the provision of common services, through formation of a Joint Powers Authority (a JPA, similar to ESTA).

3. Creating opportunities for the public to be more involved in government by establishing a far-reaching volunteer program, with opportunities in areas such as customer service, visitor services and neighborhood patrols.

The Town’s restructuring plan may necessitate elimination of some Town positions. The Town will meet and confer with its employee groups, and those groups will be invited and encouraged to participate in a competitive process to bid on providing the various services and functions that the Town will be considering for outsourcing, including those that may be provided through a JPA.

The Town plans to begin a dialogue with the community regarding its restructuring plan at a regular meeting on Sept. 27, at 6 p.m. The Town’s desire is to begin implementing suitable portions of the plan by Jan. 1, 2013.

For further information:

Please attend a public meeting scheduled for Sept. 27, at 6 p.m., in the Town Council chambers. The Town will publish all of the relevant settlement documents on the Town’s website in advance of the meeting, and have hard copies available at the meeting for discussion. Present at the meeting and available for questions will be the Town’s court-appointed mediator and U.S. Bankruptcy Judge, Elizabeth Perris, as well as legal counsel, including Ken Klee and Michael Tuchin of Klee, Tuchin, Bogdanoff and Stern, who are among the highest ranking and most respected in the bankruptcy field.

If you have questions prior to the meeting, please send them to mllasettlement@ci.mammoth-lakes.ca.us, or call 760.934.8989, extension 223. Town staff will compile all questions and answers into a report available at the Sept. 27 meeting, and later post information on the Town’s website.

By Allen Best

Reading the tea leaves

KETCHUM, Idaho – It’s the season for business conferences as ski town officials huddle to plot their competitive strategies.

In Ketchum and Sun Valley, an economic development group called Sustain Blaine is planning to hear a panel talk about location-neutral companies. Group officials say they get two calls a month from companies interested in relocating their businesses to the Sun Valley area, but only two companies per year end up doing so. What are the barriers to relocation of such businesses?

Also on the agenda in Sun Valley is a talk by Joseph Kasputys, founder of HIS Global Insight, which will probe global and national economies.

In Colorado, something similar is underway in Steamboat Springs. The community already has a more diverse economic base than most. It has 1,000 employees in location-neutral businesses. Among them is SmartWool, the maker of socks for rugged activities, and The Industrial Company, an international construction company, which both began operations in Steamboat and retain corporate headquarters. Outdoor recreation manufacturing employs more than 400.

Tom Kern, director of the local chamber, points out that healthcare has 1,000 full-time employees, energy and mining another 1,000.

“What the economic summit is trying to do is have the community devise a strategic plan regarding its future direction as it relates to economic development. Obviously, tourism will have a large part in that strategy but what are this community’s priorities as it relates to these other industrial clusters that presently reside here?” Kern tells Mountain Town News.

And in Whistler, a high-level brain trust of representatives from the municipal, hotel, ski area and other sectors has been summoned to help spend $6.35 million in provincial money.

While doing so, members of the Economic Partnership Initiative are expected to pool information about the impact of the global financial crisis, changing visitor travel and demographic patterns, exchange rate fluctuations, resort competition, revenue uncertainty, new emerging markets like China, increased global awareness of Whistler in the wake of the 2010 Olympics. and social media and other marketing shifts.

Vail tests health-related tourism

VAIL, Colo. – Vail continues to explore how it can make a better income through what is broadly called medical tourism.

It’s a rubber-band expression that can, depending upon who is speaking, refer to such traditional things as spa treatments and wellness seminars. Also traditional has been the hosting of conferences and seminars to attract medical practioneers.

In the early 1990s, Vail gained another revenue stream when Tahoe-based orthoepeadic surgeon J. Richard Steadman set up business. The clinic continues to draw the rich and famous, including professional athletes, to have their shoulders and knees worked on, but more ordinary people, too. Now, a third of the hospital nights at the adjacent hospital are because of the clinic.

Now, Vail is ramping up efforts to draw visitors for health reasons. One aspect is to draw conferences and other such meetings. The Vail Valley Partnership has added a staff member to specifically recruit medical groups and meetings. Chris Romer, the partnership’s president, reports that this has grown to more than one-fourth of the group business.

Altogether, the hospital and medical groups could account for as much as 6 percent of the towns’ economic base, according to Stan Zemler, the town manager, who spoke recently at a forum covered by the Vail Daily.

Another initiative is to promote seminars and activities appealing to people interested in physical fitness. That’s always been Vail’s forte, but this has a different tact.

Another effort involves special event programming. Last weekend,  an event called Living at Your Peak was held in Vail. There were sessions titled, “ Stress and Biological Aging: What’s lifestyle got to do with it?” and “Nutrition Translated.”

Participants had the opportunity to road bike through Vail with Freddie Rodriguez, who promised to tell stories from the Tour de France. Mt. Everest climber Ellen Miller  explained how interval training and using heart-rate monitors and zones can be used to best advantage. And professional tennis legend Martina Natrilova gave the keynote.

Jasper wants to test air service

JASPER, Alberta – Elected officials in Jasper have agreed to throw in $8,000 toward a $40,000 study to determine the feasibility for regional air service out of the local airport.

The Fitzhugh, the local newspaper, reported that the study was precipitated by the announcement made by WestJet that it had purchased 40 new jets to use for regional service.

Why wouldn’t WestJet and other airlines study the feasibility themselves? In the airline business, that’s the way it works, explained Maggie Davison, chief executive of the Jasper Tourism. Local communities must be aggressive in attracting service.

Main Street redevelopment

PARK CITY, Utah – Major renovation of two-story building on Park City’s Main Street is about to begin. When finished, the building will have four stories. The Park Record says the building is owned by Ken Abdalla, who has acquired several properties along the commercial street in the last several years.

No more butts in Jackson 

JACKSON, Wyo. – The Virginian, the last bar in Jackson Hole to allow smoking indoors, has done a 180. The Jackson Hole News&Guide reports smoking was banned four months ago to enable managers to evaluate the effect on business, and the ban will continue at least several months more. General manger Mike Kraft did acknowledge that the bar’s clientele has changed.