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Mayor Mirrors His City, Files for Bankruptcy

Politician cites his suit against his former employer and the stock market's nose dive. Desert Hot Springs filed for protection last year.

November 24, 2002|Scott Gold | Times Staff Writer

Eleven months ago, Desert Hot Springs, crippled by a legal judgment, became California's first government entity in seven years to file for bankruptcy.

This week, the town's mayor -- financially crippled by the lumbering pace of a legal dispute with his former employer -- said he's declaring bankruptcy too.

Matt Weyuker, mayor since 1999, confirmed in an "open letter" to the struggling desert town that he had filed for Chapter 7 bankruptcy. In the letter, the mayor said he was wrongly fired from his position at a university. He said his lawsuit over the job and a tough run on the stock market have sapped him and his wife of their savings.

"We are, of course, deeply embarrassed by this turn of events," Weyuker wrote. "We simply ran out of money and other assets and literally out of options.... I am proud to be ... mayor, and I sincerely believe that I have done a proficient, knowledgeable and professional job in representing our community and being its elected leader."

In a brief interview, Weyuker, 69, said he has no plans to resign.

His filing earlier this month in U.S. Bankruptcy Court in San Bernardino, according to legal records, comes on the heels of Desert Hot Springs itself being forced into bankruptcy.

Last year, the city filed for protection under Chapter 9 of the federal bankruptcy code. The emergency measure allows the city to protect its assets and property -- and to recover, albeit slowly, from legal troubles.

The move came after a federal judge reinstated an earlier court's ruling that Desert Hot Springs should pay a developer a $3-million judgment in a long-simmering dispute over the city's 1990 decision to quash plans for a mobile home park. The mobile home developer had filed a lawsuit claiming that the city violated the Fair Housing Act by, in effect, discriminating against low-income families.

The bankruptcy filing last December was the first by a government entity in California since Orange County filed for protection in 1994, after losing more than $1.5 billion on its investments, according to the League of California Cities.

Desert Hot Springs is known for natural mineral water and dozens of spas, but has always been something of a stepchild to the more upper-crust communities in the Palm Springs area. At the time of the city's bankruptcy filing, Weyuker said he hoped that the move would remove a cloud of uncertainty and allow the city to better market itself.

Jo Lynn Slaughter, executive director of the Desert Hot Springs Chamber of Commerce, said she does not think the mayor's bankruptcy will hinder those efforts: "It's completely unrelated. I don't view it as a setback. It's his personal business."

Desert Hot Springs, Slaughter said, is seeing some interest from developers now, as well as some redevelopment. The city of about 17,000 is expected to grow in coming years, she said.

In his letter, Weyuker said he had worked at Western University of Health Sciences, based in Pomona, for 21 years and was serving as director of government relations when he was elected mayor in November 1999. He said he was fired in July 2000, then filed a wrongful termination lawsuit, alleging age bias. The case is set for trial in 2003.

"During the long, often delayed legal process, we paid our bills using money we had set aside for retirement ... hoping the lawsuit would be settled before we ran out of money," he wrote. "We had not counted on two things happening that impacted our ability to continue paying our bills as we had been doing for over 45 years -- the school's lawyers' stalling tactics that delayed any positive movement on the lawsuit for well over a year and the stock market nose dive."

Western University spokeswoman Jean Henshaw declined to comment about the lawsuit.

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