AB 155 received "yes" votes from LB-area legislators Assemblyman (co-author) Warren Furutani (D., Carson-LB) and Assemblywoman Bonnie Lowenthal (D., LB).

The bill, authored by Assemblyman Tony Mendoza (D., Norwalk-Lakewood), would prohibit local government entities from filing under federal bankruptcy law unless approved by the CA California Debt and Investment Advisory Commission (CDIAC)...which is comprised of the State Treasurer, and other members including the State Controller, the Governor, two members each from the Senate and Assembly, and two local government officials).

The Assembly floor tally was 43-16 (41 votes needed)...but will be recorded as 47-25 under an Assembly procedure that lets Assemblymembers change their votes after they're cast.

The bill is sponsored by the CA Professional Firefighters Association, which has 170 local affiliates including the LB Firefighters Association (Local 372). The LB Firefighters union's website has for months taken an interest in the City of Vallejo's bankruptcy filing, accusing that northern CA city of "using bankruptcy to break employment contracts with its employees [by creating] a budget that makes it appear as though it cannot pay its bills to justify selectively breaking commitments it made to its employees and retirees."

In addition to opposition by the cities of LB and Signal Hill, other area jurisdictions opposing the bill are the Cities of Cypress, Fullerton, Hermosa Beach, Huntington Beach, Newport Beach, Torrance, Tustin, Yorba Linda and the County of Orange.

LBReport.com was first to report on AB 155 on April 24. Although LB's City Council didn't explicitly vote to oppose AB 155, the Council adopted verbiage as part of its general state legislative agenda to oppose "legislation that preempts the current authority possessed by the City and delegates that authority to the State or other government jurisdiction."

Consistent with that Council-declared policy, LB City Manager Pat West signed a letter on April 17 opposing AB 155, which was transmitted to Assemblyman Mendoza and cc'd to LB-area Assemblymembers B. Lowenthal, Furutani and Hall...as well as Senators Wright, A. Lowenthal and Oropeza.

City Manager West's opposition letter to AB 155 stated in pertinent part:

...AB 155 will insert a state body into what is fundamentally a local decision making process, and substitute the judgment of a state body for that of the Long Beach City Council. The City of Long Beach has policies intact that require all city funds to be structurally balanced throughout the budget process. Recurring revenue will equal or exceed recurring expenditures in both Proposed and Adopted Budgets. If a structural imbalance occurs, the City of Long Beach will develop and implement a plan to bring the budget back into structural balance...

Additionally, municipal bankruptcy is rarely used. The record shows that cities will use all means available to them to avoid bankruptcy. Since adoption of Chapter 9 of the Bankruptcy Code in 1949 -- 60 years ago -- only two cities have petitioned for its use: the City of Desert Hot Springs in 1994, and last year the City of Vallejo. Municipal bankruptcy is not an attractive alternative for cities, nor is it an easy process.

...The state today has one of the worst credit ratings in the nation, not as a result of a city action, but due to a lack of confidence among major bond rating and financial institutions, as well as to the State's own financial crisis which was neither created by or the result of local government actions...

AB 155 will do nothing to address the factors affecting the state's credit rating. Rather, it will insert state elected officials into what is fundamentally a local decision-making process...

Given these reasons, the City of Long Beach strongly opposes AB 155.

s/ Patrick H. West
City Manager

In a release following the Assembly vote, Assemblyman Mendoza said:

"The bill will not ban a municipal bankruptcy filing, but instead will utilize CDIAC’s expertise in public finance. My goal is to work with municipalities in reducing and removing any ripple effects that will likely occur through out the state with such a filing. AB 155 is a proactive measure that will help protect the financial outlook of California and the credit rating of local public entities."

The release notes that Assemblyman Mendoza "is a former teacher and Vice-Chair of the Latino Legislative Caucus who proudly serves the communities of Norwalk, Buena Park, Cerritos, Santa Fe Springs, Artesia, Hawaiian Gardens and portions of Whittier and Lakewood."

Supporters and opponents of AB 155 as listed in an April 22 Assembly Committee legislative analysis are:

Support
          CA Professional Firefighters [CO-SPONSOR]
          CDF Firefighters Local 2881 [CO-SPONSOR]
          AARP
          American Federation of State, County and Municipal Employees,
          AFL-CIO
          Association for Los Angeles Deputy Sheriffs
          CA Alliance for Retired Americans
          CA Association of Highway Patrolmen (CAHP)
          CA Labor Federation, AFL-CIO
          CA Nurses Association
          CA Professional Firefighters
          CA Reinvestment Coalition
          CA School Employees Association (CSEA)
          CA State Employees Association
          CA State Firefighters' Association, Inc.
          CA Teamsters Public Affairs Council
          Consumer Federation of CA
          Glendale City Employees Association
          Kern County Fire Fighters Union, Inc.
          L.A. County Probation Officers Union
          Livermore-Pleasanton Firefighters Local 1974
          Los Angeles County Fire Fighters Local 1014
          Los Angeles Police Protective League
          Napa-Solano Central Labor Council
          National Nurses Organizing Committee
          North Bay Labor Council, AFL-CIO
          Organization of SMUD Employees
          Peace Officers Research Association of CA (PORAC)
          Production Strategies, Inc.
          Professional Engineers in CA Government (PECG)
          Riverside Sheriffs' Association
          San Bernardino Public Employees Association
          San Diego Municipal Employee's Association
          San Francisco Labor Council
          San Luis Obispo County Employees Association
          Santa Rosa City Employees Association
          Service Employees International Union (SEIU)
          State Building and Construction Trades Council of CA
          Individual letter

         Opposition
          Association of California Water Agencies
          CA Special Districts Association
          CA State Association of Counties
          Cities of:  Adelanto, American Canyon, Antioch, Arvin,
          Atascadero, Belmont, Benicia,
               Berkeley, Burlingame, California City, Calistoga,
          Chowchilla, Cloverdale, Clayton,
               Clovis, Coalinga, Concord, Cypress, Exeter, Fairfield,
          Fowler, Fremont, Fullerton, Guadalupe, Healdsburg, Hermosa Beach, Highland,
          Huntington Beach,
               Huntington Park, Huron, Kingsburg, Lemoore, Livermore,
          Fontana, Madera, Manteca,
               Merced, Mendota, Mill Valley, Modesto, Moreno Valley,
          Newport Beach, Norco,
               Norwalk, Palmdale, Patterson, Placentia, Pleasanton, Rio
          Vista, Reedley, Ridgecrest, San
               Luis Obispo, San Pablo, Santa Rosa, Shafter, Signal Hill,
          Stockton, Tehachapi, Torrance,
               Tracy, Tulare, Tustin, Visalia, Wasco, Walnut Creek,
          Woodlake, Yorba Linda, Yucaipa
          County of Orange
          League of CA Cities
          League of CA Cities, Inland Empire Division
          League of CA Cities, Orange County Division
          Regional Council of Rural Counties
          South Bay Cities Council of Governments
          Towns of Apple Valley, Danville, Mammoth Lake, Paradise, Windsor
          and Yountville
          Urban Counties Caucus