Skip to comments.City of Compton (California) may declare bankruptcy by September: officials
Posted on 07/18/2012 3:01:10 AM PDT by Zakeet
The City of Compton, a city of 93,000 people located on the outskirts of Los Angeles, must decide by September 1 whether to seek bankruptcy, according to its two most senior financial officials.
Such a move would see it join a growing number of deficit-hobbled California cities that have used the filing to restructure onerous debt loads.
Compton, which has an accumulated $43 million deficit and has depleted what had been a $22 million reserve, will run out of cash to make its payroll on September 1 at its current cash consumption rate, city comptroller Steven Ajobiewe told the city council during a July 17 meeting.
"I have $3 million in the bank and $5 million in warrants due in the next 10 to 12 days," said city treasurer Doug Sanders. "By then, the council will have a decision to make: don't pay the bonds, default on them, or have a serious talk about bankruptcy."
The city council adjourned at 11 pm without discussing a potential bankruptcy filing.
Compton Mayor Eric J. Perrodin also said he brought unspecified charges of "waste, fraud and abuse of public monies" to California officials, and had met with auditors from both the state and Los Angeles County.
He told the city council that at one point in its past the city had overspent legally set limits on certain programs by $17 million but would not elaborate.
Neither the state nor county has started an audit or investigation, city officials said.
Unlike San Bernardino, which has a large unfunded liability to pay its employees' pensions, Compton years ago increased its property tax to fund its workers' pension obligations, said Perrodin, and the retirement program is fully funded.
(Excerpt) Read more at reuters.com ...
Still more evidence that we need to raise taxes and build a choo choo!
As I’ve been saying all along. A lot of cities are fixin to “go Detroit”.
Thanks Zakeet. But at least the pensions are fully funded, because after all, *that’s* the important part. Government exists of, by, and for the government.
You ever noticed....no California officials....except for that one town south of LA...have ever been put up on legal charges for corruption or incompetence?
“A lot of cities are fixin to go Detroit.”
Here in NJ you can include the suburbs as well; there was no way they could raise the property taxes to actually fund the future payouts to municipal employees (they’d go from $8K per year to $12K overnight), so they’ve been kicking that can down the road for some time (and now they have to pay the piper). The taxes already chase away potential businesses and taxpayers, so they’re really stuck. Streets are deteriorating, municipal employees are being laid off, it really is crumbling.
We need of map of CA showing all the bankrupt towns.
Morally, or financially...? ;)
If the gangbangers paid taxes on their dope money, hell holes like Compton would look like the gilded cities of the U.A.E...they put Capone in prison for not paying taxes on his criminal loot...
We could color code it if it wouldn’t be racis.
Pretty much everyone disagrees with me but I personally think Detroit is in better shape for a recovery than many cities. They have the advantage of already being at the bottom.
They have light years to go but they have turned toward the more rational democrat choices in recent elections. Mayor Bing doesn’t get invited to union events because he’s no friend of theirs. Another sign is the skyrocketing justifiable homicide rate. People who are defending themselves are taking on major personal responsibility.
On the other hand there are constant enticements to toward liberal stupidity like farming in Detroit which is nothing more than a scam to collect billions in soil restoration grants.
Detroit has the same problem our areas that are “ripe for recovery” have in NJ: the working people fled, following the jobs, and as long as all that remains are government wards who can collect their welfare checks there anyway, nobody will expose themselves to the danger proximity to those people brings.
Asbury Park at the Jersey Shore was supposed to have such a rebirth, but they wouldn’t relocate the welfare locusts (and they’ve begun demolishing some of the half-finished buildings they heralded as signs of the revival 20 years ago). Parts of Jersey City HAVE had a rebirth, via gentrification and re-location.
One issue where I stand on the opposite side from my normal position is the fight over a second bridge over the Detroit river. I’m for it because in my opinion its a smart investment because Detroit is a bottleneck at the second busiest border crossing (truck freight)in the USA after Laredo.
The good it would do for Detroit would only be a side effect rather than a primary objective. Unlike high speed rail, the need is already be there and would be whether Detroit was there or not. Canada has been pushing for it for 30 years and even has their side of the river prepared with a highway extension and everything.
...it took a hell of a lot of Leftist corruption and mismanagement to make it the monumental money pit it is today.
If the Detroit dumasses would just vote once or twice like they gots some damn sense Motown could recover and be a big boom town again almost overnight.
WTF??? The ‘Hood is going bankrupt?
Oh no, they di’nt!
Compton and Long Beach
You know you in trouble.
It’s like this and like that and like this
So just chill to the next episode
Detroit has no hope. Why?
Because there is no change in the business conditions. Let’s put aside the quality of life, crime and other issues for a moment that determine whether people want to locate there. Consider whether businesses want to locate in Detroit. Has anything changed that will attract businesses?
I don’t see it. No businesses, no jobs. No business base, no tax base, and so on.
>> We need of map of CA showing all the bankrupt towns.
Just get yourself a generic map of CA showing ALL its towns, and wait a year or two for it to become accurate. :-)
Do what’s right for the state and nation and the cities will stand or fall all by themselves.
You need enough of a tax base. Do they have that? Nothing else matters. Are there enough paying in to support the govt. that is paying out to those not paying in? Provide necessary services as well? I think there are cities out there beyond help. Compton is beyond help. They don’t have a tax base. They have recipients.
Its nice to have a whipping boy but sometimes ideology gets in the way of reality. The fact is that some of the wealthiest neighborhoods in the state are around the outskirts of Detroit. Mitt Romney raised the bulk of his Michigan money in Detroit. My sister and her husband are both 6 figure earners in Detroit. There is money and potential there.
The thing is that we need to stop worrying about fixing cities. Do the right things for the federal and state and the cities will inevitably follow. As the state economy does better, businesses are coming and Detroit is one of the places they’re settling.
Detroit is the second busiest border crossing in the country and should be doing better. Unfortunately that single crossing is under sole control of Detroit’s wealthiest slumlord and democrat donor. Unfortunately Americans for prosperity is is on the side of the democrats in that fight.
All well and good but A is supporting B. The only question is whether A is capable of supporting B as B grows.
Don’t worry about B. B will grow if the will is there. If not, it dies.
B grows period as of now. If we could stop that growth we wouldn’t be in this shape as a nation. You’re right it grows till it dies but we have a political class that is going to resort to more and more extreme measures to keep the beast alive.
More and more evidence keeps piling up that the liberal governance model does not work and results in bankruptcy. Or, like Detroit, the cities simply are abandoned and revert to nature — literally. We see it in American cities. We see it in extremely liberal American states like California. We see the ultimate end result in statist societies like North Korea and pre-liberation Albania, where people used horses and carts. Compton is another example. The sad thing is that all these bankruptcies and crises don’t change the people’s view that statism doesn’t work.
What I’m saying is that doing the right thing for the state and federal should be enough to pull the city along. However that includes saying “No” to the city looking for handouts as we encourage them to behave responsibly.
What... they haven’t taxed the rich people in Compton enough?
We’re talking about California’s own little Detroit here...
Nice place, that Compton... Can't imagine why it'd be having problems..
If you have thousand of illegals in your town and do not pay taxes to the city and part of those taxes are for schools,hospitals,property,medicare etc. Then in the end of the day your legal people in the city will have to pay. I think I would be upset if I were a legal citizen of the city. I can see pension money being used to help the citizen out. Then the people have worked all their lives will have very little when retiring from your city. Please wake-up CA before it is to late.
Compton is majority Hispanic (65%). Blacks make up 33% of the population.
Not sure pulling along is any sort of a decent option. Some places like Compton might never be anywhere near self supportive.
That’s kind of my point. Survival of the fittest.
Cut off the money and if the city has a reason and will to survive it will begin to produce. Call it tough love.
The NEW ballad of Jed Clampett
Come and listen to a story ‘bout a man named Jed
Poor oil entrepreneur barely kept his family fed
Then one day he was working for some food,
And up through the town come a bumbling clown
(Brown that is, take a toke, what a joke)
Well the first thing you know old Jed’s taxes are to much to bear,
Kin folk said Jed move away from there!
Said California is no place for you to be
So they loaded up the truck and they moved from Beverly
(gon back to the Hills they are, fishn holes, country and western stars)
Well now it’s time to say goodbye to Jed and all his kin
They would like to thank you folks for kindly dropping in
You’re all invited back again to their new locality
To have a heaping helping of their hospitality
(Redneck Hillbillies, is what the press call ‘em now,
Clingers of bibles and guns and to Obama no bow!
Nice folks Y’all come back now, ya hear?)
You know many people on here assume people don’t work because they don’t want to. They rarely make the distinction between those that simply can’t find work and those that won’t. That point being made,and i have no idea where u stand on that,what happens to all the people without jobs? From either side of the question? where do they go?
Doing what’s good for America, generally means jobs will be created as a result. I’m not one of those who assumes that people are on welfare, food stamps and unemployment are just plain lazy (I’m a Michigander after all).
Its why I go against the conservative grain in select situations like spending taxpayer money to build a second bridge across the Detroit river. It isn’t specifically for Detroit but Detroit will benefit greatly as a result. Its the second busiest freight crossing in America and easing the bottleneck and dividing traffic between two crossings will bring warehouses more traffic, truck plazas, duty free shops etc. They’ll be jobs in one of the most economically depressed areas of the city. A lot of the residents of Del Ray see it as their ticket out of that neighborhood and into potential jobs.
Basically I see it as good for America and for the state with Detroit reaping the benefits as a result rather than as a primary goal.
In the case of Compton, what is truly needed is obviously different but I’m sure that there’s something of value there that could be exploited with the city reaping the benefits. Cities grow where they are for a reason. We need to look at what spurred growth in the cities and concentrate on that and not giving handouts. Give them a hand up instead.
As if Dre or Cube would go anywhere near Compton today.
I’ll disagree with your Compton statement. The reason cities grew where they did were usually geographic convenience and resources. Those reason are no longer really as relevant as they had been. The Detroit case with the bridge won’t transfer to most of the cities filing bankruptcy.
My issue with be with how to pay for it.
We recently had our governor here in NJ nix a third tunnel project under the Hudson River to NYC; people b!tched & moaned, stooping so low as to complain that people may need it to “see a Broadway show” (since our area lost so many jobs - especially financial jobs - there are a lot less people using ALL crossings into NYC, and since those jobs moved to Manila & Bangalore, they won’t be back anytime soon).
He said it simply didn’t make financial sense, and he was absolutely right; we can’t pretend it is 1990 anymore.
Canada is giving us the money to pay for most of it and even putting up the money to buy the land for the approaches on the American side. They’ll do the toll collecting for 40 years and expect to make a profit in that time.
This isn’t high speed rail. There is an existing need here and Canada is giving us a deal that we simply shouldn’t ignore.
They should run with it then; just be sure they dot the “i”s and cross the “t”s.
Here in NJ we still collect tolls on the Garden State Parkway, more than fifty years after it was built; the tolls were originally supposed to be until it was paid off, but they’ve become a taxing entity unto themselves (with a whole population of parasites now making “careers” of it).
LOL! I used to work in Compton. I see that you are familiar with it. [smiles]
Oh, yeah. Like a giant, open air, 24-hour L’il Kim video. ;)
Indeed. If you work there, you drive straight in, work, and drive straight out again. No gawking, no slowing down, no stopping for gas or any other reason.
It probably has not improved what with the newly-empowered “Amish.”
Sounds like a worthwhile project; hope it moves quickly.