The author of California's four-month-old municipal bankruptcy restrictions is recommending revisions to broaden the powers of an outside mediator and loosen deadlines on negotiations with creditors and labor groups, Bloomberg News reported yesterday. Public employee unions are backing the new bill by state Assemblyman Bob Wieckowski (D), who wrote the law approved in September. It requires municipalities to undergo an evaluation or declare a fiscal emergency before filing for bankruptcy. Stockton, Calif., has invoked the process to help the community of 292,000 avoid becoming the largest U.S. city to enter bankruptcy since 2008, when Vallejo, with a population of about 116,000, sought court protection. California joined Indiana and Michigan in developing legislation to restrict filings. The League of California Cities opposes the new bill, saying that it would give outside mediators too much power and make it possible for unions and creditors to prolong the mediation process as cities run out of cash.
