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| Fish. Why worry, our city is already broke? |
"Bankruptcy" by Todd McCune Bray
While there are issues of resident and business flight, in this economy that is doubtful. The most interesting aspects of a Chapter 9 bankruptcy are court appointed time to restructure debt and commitments to things like our pension liabilities coupled with the protection of the federal government against seizure of city owned assets from creditors. http://stateline.org/live/details/story?contentId=614970
Posted by Kathy Meeh
18 comments:
I don't know how it can be avoided. We're kidding ourselves about other solutions. Still, so much of the filing and plan are at the direction of city council and staff. Let's hope we get a better handle on labor contracts than Vallejo did. Wonder how much it will cost to draw up the plan and file? I've heard from a million up. Better do it while we can still borrow the money.
Nobody is going to lend you money to declare bankrupcy
Why don't we just contract police services with the county?
"Let's hope we get a better handle on labor contracts than Vallejo did."
This is the key to much of our revenue crisis. Vallejo screwed up their chance to sharply cut pension costs.
Pacifica has an over 20 million pension obligation to Calpers which is growing by over 1 million a year. Unless we get this and wages under control, bankruptcy will be our only alternative.
Negotiations are just starting with police and fire. We need to be tough with the unions and win big concessions this time. If the unions play hardball we have the right to impose wage and benefit cuts like San Jose, Fresno and several other cities have done.
Negotiate all you want. Won't be enough or fast enough to bail us out of this disaster. And that pension obligation will stuill be there.
anon415 you should ask len and marian. county numbers have been here since Feb14. what's the hold-up?
@415 anon, that's a very good question and it might lead us to an even larger solution. Contract the cops out and save at least a million a year and probably much more, move city offices to the enormous police station( the SMC sheriffs won't need much of it because admin is in RWC), sell off the property on Santa Maria and Francisco (prime real estate for apts, mixed use whatev). That enormous overbuilt police station still has a "mortgage" of several million. Why not get full use out of it?
Tom @403 It's a growth industry in CA and lines of credit can be arranged for just such a purpose. Or the city can raid (by unanimous council vote) the Ralph K. Davies endowment made to this city for PB&R use about 10 years ago. A Chapter 9 filing and plan would require consultants, etc. and cost plenty but it's an idea whose time has come in Pacifica. We could be ahead of the stampede.
Can't you just fill out some bankruptcy forms on LegalZoom?
I don't want to see the terms on such a loan, it will make a payday loan look good.
If we touch the Davies endowment for any other reason than what it was given for we will never get another endowment an would not deserve one.
Worth a shot. Anything to avoid giving a dime to another lawyer scum. Other than Robert Shapiro, of course.
Some others might remember that the police station was originally built with the idea of also using it as city hall and offices. It was engineered sturdy enough for a 2nd story to be added. Oddly enough the police chief back then did not want to share the facility with city staff or council. I can understand.
Appreciate the potential for irony if the fight for space in the life raft heats up.
Wonder what a bankruptcy trustee would say about that endowment and whether it can be protected or has to be put in play.
City offices,school board everything,planning Pb&r could have all been on the police station site. Another pacifica failure
Hindsight is always 20/20 and is delivered like wisdom of the ages. The important thing is that we have the ability to change how things are if we face this town's reality and are willing to work together and make the tough decisions and compromises
After Vallejo's bankruptcy in 2008, the State of California passed Assembly Bill 506, which allows a municipality to restructure its debts with creditors and renegotiate employee contracts without declaring bankruptcy, thereby saving its bond ratings from the consequences of a formal Chapter 9 bankruptcy.
The City of Pacifica has taken the first step necessary for this by declaring a fiscal emergency. Whether intentional or not, our city can now aggressively bring down the cost of senior staff, department heads, fire and police, and potentially restructure its debts with creditors, including fines like the one agreed to in the recent $50 million settlement with the water board.
As of now, AB 506 seems to me like the best option for our city. Correct me if I am wrong, but of all those financial task force options, none of them included a reference to the restructuring AB 506 would afford our community.
I have confirmation the finance task force never discussed nor were introduced to AB 506 and what it might achieve.
That declaration of a fiscal emergency had to be coincidental re AB 506. As you say Todd, it's never been discussed at FCSTF. Sounds like something the city should explore real soon. I suppose if we're not quite broke enough we may not meet the criteria, but that day will surely come soon. That handpicked FCSTF should have included people like Todd Bray and Lionel Emde who not only ask the tough questions but also search for answers. Tom Clifford seems the same sort. Guess the wrong hands did the picking.
The task force was not intended to ask tough questions - it was intended to provide cover and "justify" actions that the council already wanted to take.
At least one person I know resigned from it when that became clear.
A bankruptcy filing would be ugly, real ugly. Chapter 9 is still being sorted out in the courts, and I don't think it's certain as to what would happen. Stockton's struggle will show the way, for good or ill.
The council could ask all the employee unions to reopen their current contracts and renegotiate their compensation downward without a bankruptcy filing. The unions don't have to do it, but at least we would know where we stand.
Problem is that the council seems unable to ask that question. I don't see any other short term step to a stopgap solution.
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