Another one of Councilman Bernard Parks’ efforts bit the dust Wednesday when the City Council voted to ignore his request to retain the city of Los Angeles’ ability to file bankruptcy, unfettered by state intervention.

All week, the council had been debating a resolution Parks authored (and Councilman Dennis Zine seconded) calling for the city to oppose AB 155 — a bill already passed by the Assembly and headed for the state Senate next week — that restricts the ability of cities to petition for bankruptcy protection.
Parks’ resolution raised alarm among city workers, both present and retired, who took it to mean that, because of its budget woes, the city of Los Angeles is contemplating filing for bankruptcy.

Everybody got upset, especially the Los Angeles Firefighters Union, whose president, Patrick McOsker, camped in the council chambers and spoke strongly against the resolution each of the four times the issue came up.

Employee unions opposed the Parks resolution not only for the sake of their members’ pensions, but for their livelihoods and salaries, as well, which they feared would be lost if the city took the easy way out of its current financial difficulties and filed bankruptcy, as the city of Vallejo did last year.

Vallejo is the first California city in this current financial crisis to file bankruptcy because of revenue losses and expanding pension obligations. To forestall a stampede of cities’ rush into bankruptcy, Democratic Assemblyman Tony Mendoza of Artesia introduced AB 155 in January that puts review provisions and conditions on cities before they can file for bankruptcy protection.

The state-imposed gatekeeper restrictions would address some of the fears and concerns expressed by Los Angeles city workers and pensioners this week. McOsker told the council: “We’re not here just to save our benefits; we don’t want the city to go bankrupt. No employee wants to see the company he works for go bankrupt.”

McOsker said, in effect, that cities should not be allowed to just throw up their hands and declare bankruptcy in times of financial difficulty.

“We want to work and negotiate with the city to resolve difficulties so the city can remain solvent.”

McOsker urged the council to take no position on AB 155, which he labeled “a right and righteous bill.”

Parks said Los Angeles must oppose AB 155 to “defend its rights to local control.” He said the bill was “yet another attempt by the state to assume the rights of charter cities.” In his resolution, Parks referred to the easily obtained bankruptcy filings by Vallejo in 2008 and by Desert Hot Springs in 2001 and Orange County in 1994, and stated that “other cities in California may be faced with these circumstances due to not only the economic downturn, but to the possibility that the state may take property tax revenues to balance its own budget.”

Ergo, the city of Los Angeles should not be hindered or prevented by the state in filing for bankruptcy protection if the city sees fit.

Parks said in City Council Wednesday that the bill, which “takes away our own local rule,” is opposed by 131 cities and supported by none. “It is not in our benefit to support this bill,” Parks insisted.

Parks’ council colleagues pointed out that those 131 cities opposed to AB 155 are little cities with nothing much to lose, while big ones — San Francisco, Sacramento, San Diego, etc. — have taken no position on it, and from all the squirming around the council members did all week, AB 155 is an item they preferred not to deal with either. But Parks kept pushing it into their faces.

Councilman Richard Alarcon said Wednesday, “The only reason to oppose this bill is to anticipate going into bankruptcy,” expressing on the council floor the sentiments of the public. “This bill is good legislation. It creates a process for review; it does not disallow cities to file bankruptcy.”

And for the second time this week, Alarcon made a motion to “receive and file” (read: ignore it) Parks’ resolution. On Monday, Alarcon’s motion passed 7-2 and Wednesday it passed again by a 7-4 vote, finally putting the matter to rest and putting Los Angeles at the table with the big boys — San Francisco, Sacramento, San Diego, etc. — who feel that if push comes to shove, it can handle the state.