City of Compton may declare bankruptcy by SeptemberSubmitted by PWA on Wed, 07/18/2012 - 14:30
Because once the dominoes start, they don't stop. Stockton, Mammoth, San Bernardino and now legendary rap and LA riots nexus - the City of Compton. Fear not: the ESM, and the German population whose retirement age will have to be in the quadruple digit range to fund a broke world, has got this, too, covered. Also, only squares don't make fun of Meredith Whitney for saying municipal America is insolvent, so please do.
The City of Compton, a city of 93,000 people located on the outskirts of Los Angeles, must decide by Sept. 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 Sept. 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.