Last year, the Assembly gave local governments an effective tool for dealing with local fiscal crisis. Now, at least one Assemblyman is trying to take that tool back.
When originally proposed, AB 506 was a danger to local governments. It would have all-but procedurally barred local governments from seeking bankruptcy – the first time in sixty years that access to the federal court system would have been stymied. However, a group of local government organizations – including the League of California Cities and the California State Association of Counties – engaged with the bill’s sponsor in rounds of marathon negotiations.
Those negotiations transformed a bill that would have served as legislative handcuffs for desperate local governments and made it something altogether different. It became an avenue for reform and productive conversation. However, now, less than six months later, Assemblyman Bob Wickowski is trying to renege on their deal.
The bill created a neutral and confidential mediation process that allows governments to work with creditors to restructure debts and expenses – reforming some of the most challenging expenses and debts to resolve a fiscal crisis outside of bankruptcy court. In other words, AB 506 serves as an alternative to bankruptcy. To date, two cities have availed themselves of the process: the first was Stockton and the second was Mammoth Lakes.
But last month, Assemblyman Wieckowski offered an amendment to AB 1692 that would strip the results of the productive negotiations from the bill and replace it with the original, untenable language.
When he testified before the Assembly Local Government Committee about his amendments, he announced he never intended to stick to the deal. Instead, Wiechowski said the amendments he’s introduced represent his original intent to AB 506.
That intent is to prevent municipal bankruptcies at any price, hindering those whose actions can most directly can benefit residents. The original – and now amended intent – would create an endless round of mediations with no deadlines, no requirement to act, no impetus to engage in constructive dialogue and negotiation. The “neutral-evaluator” would no longer be neutral. He or she would have the ability to make unilateral decisions that impact the course of the negotiations. Those decisions, and deliberate stall tactics used by any of the participants of the negotiations, could and would prolong the negotiations indefinitely, keeping local governments from resolving their most desperate challenges.
In other words, it represents an affront on local government authority.
Wiechoswki’s amendments to AB 1692 would unravel the positive and replace it with negatives.
It is ironic that bad-faith, dishonest negotiating would undermine a bill designed to provide this avenue for honest negotiations.
The amendments offered to AB 1692 represent an affront to local government authority is another brazen attempted power-grab by an Assembly that fears progress and reform. Perhaps that’s because each time a local government reforms its expenses, controls its debts, and rights its fiscal house, it presents a stark comparison by the dysfunction of Sacramento politicians.