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2nd Calif. city within week files for bankruptcy

9:40 PM, Jul 3, 2012   |    comments
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SACRAMENTO, CA - Mammoth Lakes is the second California city to file for bankruptcy within the last week. Stockton was the first. Mammoth lakes filed Chapter 9 bankruptcy papers in Sacramento Tuesday.

Mammoth Lakes is filing for bankruptcy to protect itself from a $43 million court judgment. The city's largest creditor, Mammoth Lakes Land Acquisition, won a court order requiring the city to pay the judgment by June 30, according to a statement on the city's website.

Mammoth Lakes is the second city within a week to file for bankruptcy. And just a few short years before, the City of Vallejo filed for bankruptcy.

Assem. Kristin Olsen, R-Modesto, who represents the Mammoth Lakes area blames their bankruptcy on out of control pension obligations. She said the state needs to provide local governments with more flexibility to alter and renegotiate contracts to prevent more cities from going bankrupt.

"The sky isn't falling but I think it does point to the gravity of the situation and those in elected office, whether at the local level or the state level, really need to get serious about making the reforms that are necessary to get our fiscal house in order," Olsen said. "And to be able that we are spending tax payer dollars wisely and that we are making fiscally responsible decisions."

CTNS

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