Compton, California will be running out of its $22 million reserve, and will not have enough cash to make payroll on September 1 at its current cash consumption rate, according to Steven Ajobiewe, the city comptroller. This will force the city to make a decision on bankruptcy, default on payments, or default on bond payments, and the city council must decide.
“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.”
Apparently, a lot of waste and overspending was occurring on various programs such that overspending accounted for $17 million in expenditures, but no further information is available. The current bond rating of Compton is BB, and is under threat of being cut by Standard and Poor’s, making the case more difficult for the city, and making them consider bankruptcy.
Moreover, no accounting firm will sign off on Compton’s budget for an increasing budget deficit for the city, as the last independent accounting firm chose to resign rather than sign off on Compton’s 2011 financial statement.
Unemployment is worse than recently bankrupted sister city of San Bernadino, and both cities have seen property taxes fall due to rising foreclosures.
Unlike San Bernadino, however, its pension obligations is fully funded, but the situation has not changed for Compton, as it weighs bankruptcy.
“Those other cities that went bankrupt all had huge pension liabilities that they couldn’t meet,” said Mayor Perrodin.” Even so, we’re in pretty dire straits.”
Story is HERE.
The bankruptcy of municipalities was something bear traders long waited for since the collapse of 2008, and was an inevitability for those watching the scam money system unfold. It’s just that it’s odd that the bankruptcies are occurring now, in the midst of leaks and rising scandal of the banks, which are actually crime syndicates but dubbed scandals by the media.
The hand is being forced, and by choice or by circumstances, the choice will be made to stay or get out of this money system. I don’t think the people want the old paradigm of debt slavery anymore, but we’ll see – there’s still a large house of cards standing, even though it’s getting awfully wobbly these days.
I think the cities of California will stand in line in outrage as they learn that the banks stole so much money from them via Libor, and as more of that is revealed, that possibility will certainly emerge, as now there seems to be an increasingly long line of cities from that state weighing the bankruptcy option.
These bankruptcies will continue, and will increase to volumes to where the regular citizen will truly wonder about the state of our economic health. In the mean time, let’s do our best to spread the truth of what’s going on, because if you look at it from the perspective of the controllers, it’s all over – economic collapse, everyone is insolvent and things don’t look like they’re going to get better.
However, if you look past the sociopaths, we’re just witnessing the failure of a corrupt and morally bankrupt system.