City Of Compton To Consider Bankruptcy
COMPTON (CBS) — The city of Compton is reportedly facing bankruptcy following an announcement at a City Council meeting Tuesday night.
During the four-hour meeting, two senior financial officials told council members they have to decide whether to file for bankruptcy by September 1.
The municipality has accumulated a $43 million deficit with no reserve. Funding for the city is expected to run out by the beginning of September.
The Council added to Compton’s accumulated deficit on July 10 when it adopted a $161 million budget with a $9 million projected deficit.
“Either you’re gonna pay these bonds . . . don’t pay the bonds, default on them, preserve your cash or you either need to have a serious talk about bankruptcy,” Douglas Sanders, Compton City Treasurer, said Tuesday night.
The city council meeting adjourned without any discussion of bankruptcy.
If filed, Compton would be the fourth California city to declare or consider bankruptcy. San Bernardino, Stockton and Mammoth Lakes have all announced this year that they would seek restructuring of their liabilities.
Cristy Fajardo, reporting for CBS2 and KCAL9, said city officials weren’t returning her calls for a comment. But that “residents are demanding answers.”
She also reported the city has $3 million in the bank with about $5 million in bills.
In December, Mayor Eric Perrodin asked the state controller for an audit, alleging waste and fraud. That request wasn’t honored.
Meanwhile a company the city hired to audit its books has quit. They claim the mayor refused to cooperate with them, reported Fajardo.
The mayor denies that any of his actions have contributed to the city’s woes.
Compton has a population of 93,000.