Southern California — this just in
September 21, 2010 | 8:51 am

A Wall Street rating agency downgraded Bell’s credit ratings Tuesday, saying the city’s financial woes put it at risk of defaulting on an upcoming debt payment, according to Business Wire.

Fitch Ratings downgraded bonds totaling $57 million to “B” and “B-” level, saying “credit risks include a prospective default on a sizable $35 million unrated privately placed debt obligation due Nov. 1, 2010.”

The action comes after state auditors said last week they had found a third instance in which the city of Bell collected taxes illegally, bringing to $5.6 million the amount owed to taxpayers and raising questions about how the struggling town will balance its books. In all, auditors’ findings of tax and assessment overcharges amount to $5.6 million, or more than one-third of the city’s $13.5-million general fund.

Also on Wednesday, Atty. Gen. Jerry Brown announced a civil lawsuit against eight Bell officials and council members, accusing them of fraud and misuse of public funds.

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