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.