Stacking the deck (cont’d)

Assembly Bill 1692, a labor-backed bill making it harder for ailing cities to declare bankruptcy, is advancing throught the legislature.

The irony is twofold. As pointed out here, AB 506 hasn’t even been given a chance to work in Stockton. And unions don’t even know for sure that a federal bankruptcy judge legally can break contracts between cities and unions (somebody ought to figure that one out).

But they’re determined to keep bankruptcy out of bankruptcy court. Too impartial.

The law would allow the mediator to stop mediations’ 60-day clock indefinitely if a majority of participants said the city wasn’t coming clean with correct financial figures. It would allow the mediator to launch an investigation. This revision may flow right out of Stockton, where public employee unions have long beleived the city is hiding its true assets.

Cities would not know when mediation would end. They would get neither the cost savings of bankruptcy nor the surety neccesary to pass a balanced budget. And it is in the interests of public employees to sustain their compensation at higher levels as long as possible. And in the interests of attorneys to keep the case going. Both groups would have a motive to drag out the process, at great cost to the city.

 

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    Michael Fitzgerald

    Mike Fitzgerald is The Record’s award-winning metro columnist. His column runs in the paper three times a week. Born in San Francisco, he was raised in Stockton. His column covers diverse beats including, sometimes, the offbeat. Read Full
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