ALAMEDA, Calif. — The California attorney general’s office plans to seek a court order placing the troubled city of Bell under some sort of receivership or monitoring.
“We’re not absolutely sure what remedy we’re going to seek, either a monitor or receivership or both,” Jim Finefrock, spokesman for Attorney General Jerry Brown, said Thursday.
Bell, a blue-collar city of about 40,000 in Los Angeles County, has been in turmoil since the Los Angeles Times reported in July that then-city administrator Robert Rizzo was being paid about $800,000 a year. More revelations followed about other unusually high city salary and benefit packages.
Rizzo and seven others, including four of Bell’s five City Council members, were arrested in September on state charges of misappropriating more than $5.5 million from the city. The attorney general’s office also filed a civil suit against Bell and the eight officials in mid-September, which included the attorney general’s office first request that a receiver be appointed.
The matter is coming to a head now, Finerock said, because the attorney general’s office has been unsuccessful in negotiating an oversight arrangement with current city officials.
“We proposed a monitor and asked them to agree to that,” he said. “They basically refused.”
Bell officials countered by proposing a less powerful emergency commission, he said.
“We wrote back and basically said, 'See you in court,’ ” Finefrock said.
Over the years, the state government has developed a system for assuming control over financially troubled school districts, but there is no recent precedent for putting a city into receivership.
The ongoing crisis is raising questions about Bell’s ability to function. The City Council has not met since the Sept. 21 arrests.
The last scheduled meeting on Oct. 4 was aborted for lack of a quorum, because only one council member was present: Lorenzo Velez, the only member not to have been arrested.
A second member resigned before the meeting and a third was reportedly still in jail unable to make bail. Two other council members did not attend.
Bell has about 39,000 residents. Its per capita income averaged $13,652 from 2006 to 2008, according to the U.S. Census Bureau — about half the national average of $27,466.
The now-notorious municipality faces serious financial pressures.
An audit by the State Controller’s Office revealed that the city had illegally raised a property tax to finance employee pensions, forcing the rollback of the tax and adding the pension obligation to the city’s general fund burdens.
And according to its financial documents, Bell faces a November bullet maturity for an unrated, privately placed taxable lease-revenue bond issued to finance a failed development project.
The two agencies that rated Bell’s debt, Standard & Poor’s and Fitch Ratings, both withdrew those ratings after dropping them to junk. Both said they were unable to obtain any information about city finances and the November bond payment from Bell.
The city’s interim city administrator, Pedro Carrillo, did not return a phone call from a reporter Thursday morning.