AB 1692, a bill derided on PublicCEO and other local government sites, has been held, leaving cities with the authority to govern their own affairs in the depths of any financial crisis.

The bill would have reneged on a number of compromises that were made during last year’s legislative season. The bill’s author, Bob Wieckowski, had originally introduced AB 506 last year, a bill that was largely seen as a way to inhibit access to bankruptcy courts. However, rounds of negotiations resulted in a new process for confidential mediation. Two cities took advantage of that 60- or 90-day cooling period to work to restructure debts and avoid bankruptcy. A third city entered bankruptcy by bypassing the process.

Wieckowski proposed AB 1692 as a way to slow down or even permanently inhibit localities from entering bankruptcy by installing a powerful mediator into the neutral evaluation period. However, leadership in the Senate said that to take up the bill would be counter-productive at this time, leaving the bill to wallow until the next legislative season.

From the Los Angeles Times:

Legislation that could have delayed some municipal bankruptcies has been tabled after being opposed by the mayors of California’s largest cities, including Los Angeles’ Antonio Villaraigosa.

Senate President Pro Tem Darrell Steinberg (D-Sacramento) put the bill on hold, contending that it was too early to make more changes to a mediation process, agreed to in contentious negotiations last year, for cities intending to file for bankruptcy.

Read the full article here.