Bell, California set to default on its debt due to tragic unicorn shortage and $800K/year city officials, but mostly $800K/year city officials

You can't make this s*** up.

California City With $800,000 City Manager May Default On Debt, Warns S&P

When the government of Bell, Calif was outed for paying exorbitant salaries, the mayor said his $800,000 city manager was worth it: "Our city is one of the best in the area. That is the result of the city manager. It's not because I say it. It's because my community says it."

But things weren't actually going that well in the LA suburb. S&P just cut the city's bond rating to junk on warnings of an inability to pay debts due Nov. 1.

Bloomberg (the news service, not the idiot mayor) has the gory details.

S&P lowered Bell’s general-obligation and pension bond ratings to BB, two levels below investment grade, from A-, and put it on a watchlist for potential further downgrade. The credit-rating company cited the resignations of top city officers amid a scandal over how much they were paid, and media reports about the decline in value of property financed with municipal debt in 2007 as reasons for the downgrade.

“The lack of good information is creating some uncertainty,” S&P analyst Sussan Corson said in a telephone interview. “There could be some stress on the city, and we think that the rating action is justified.”

...On Nov. 1, the California community is scheduled to pay the so-called bullet maturity on $35 million of taxable lease- revenue bonds sold in 2007 by its Public Financing Authority in a private placement. The principal must be repaid when bullet maturity loans fall due... ...Bell has fallen behind on its payments on the bonds, which are owned by Dexia SA, the Paris- and Brussels-based bank, said Ulrike Pommee, a spokeswoman. The bank entered into an agreement with the city in June aimed at resolving the issue, she said in an e-mail yesterday.

The runner-up headline for this post was The Genius of Democrat Governance, Chapter Ninety Gajillion.

These city officials make Charlie Rangel look honest.