Compton, Calif. could be the fourth city in the Golden State to seek bankruptcy protection.

At a city council meeting Tuesday, officials announced that Compton is set to run out of funds by Sept. 1. Compton, which has only 93,000 residents, faces a deficit of $43 million after having depleted a $22 million reserve, reports Reuters.

"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 during the live-streamed city council meeting. "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."

Standard & Poor's put Compton's revenue bonds on a negative credit watch last Friday, citing concern over allegations of "abuse of public moneys" and fraud, reports the Los Angeles Times.

S&P also warned that unless they receive independently audited financial information from Compton, the city's ratings -- already at BB, or "junk" status -- could be withdrawn or suspended.

Compton may not be able to meet S&P's demands in time. The city's independent auditor, Mayer Hoffman McCann, recently declined to sign off on the city's financial statements and quit the account entirely, reports the Times. The firm stated that they couldn't get anyone at the mayor's office to cooperate with the audit inquiry.

The threat of bankruptcy has loomed over the Southern California city for more than a year now. In July 2011, the Compton City Council approved dozens of layoffs to keep their city financially solvent.

While it's unknown exactly why Compton faces such dire financial straits, the city has collected less property taxes due to rising home foreclosures, notes Reuters. Compton also has an unusually high unemployment rate of 18.8 percent. Nationwide, that figure is 8.2 percent.

California cities Stockton, Mammoth Lakes and San Bernardino have all declared their intention to file for bankruptcy protection this month.

The string of California bankruptcies is part of a larger trend of local and state governments facing budget woes. A recent report from budget experts found that local governments will likely face intense financial challenges in years to come if no one takes action.

Also on HuffPost:

See the full slideshow: The 10 Emptiest U.S. Cities 2012 or check out below to see the top five:
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  • 5. Richmond, VA

    <em><strong>12-Month Averages:</strong></em> <strong>Rental vacancy rate:</strong> 15.1 percent <strong>Homeowner vacancy rate:</strong> 2.4 percent With a rental vacancy rate of 15.1 percent, Virginia's capital ranks fourth among all major U.S. cities for empty rentals over the past year, with the first quarter of 2012 showing a 19 percent rental vacancy rate. However, Richmond's homeowner vacancy rate ranks only 27th among the country's 75 largest metro areas, and stands just 0.2 percent higher than the average for large metro areas. <a href="http://www.cnbc.com/id/48209172?__source=huffpost|emptiestcities|&par=huffpost" target="_hplink">See the full slideshow: The 10 Emptiest U.S. Cities 2012</a>

  • 4. Detroit, MI

    <em><strong>12-Month Averages:</strong></em> <strong>Rental vacancy rate:</strong> 16.9 percent <strong>Homeowner vacancy rate:</strong> 1.7 percent Detroit was one of the hardest hit cities in the recession, and with an unemployment rate of 9.9 percent as of May, it's little wonder that its 16.9 percent rental vacancy rate is the second highest in the country. Surprisingly, though, the homeowner vacancy rate remains below the 75 largest metro area's average of 2.18 percent. According to the Census Bureau, at the end of 2011, Detroit had a gross vacancy rate of 12.2 percent, a level the city has virtually maintained since 2006. <a href="http://www.cnbc.com/id/48209172?__source=huffpost|emptiestcities|&par=huffpost" target="_hplink">See the full slideshow: The 10 Emptiest U.S. Cities 2012</a>

  • 3. Memphis, TN

    <em><strong>12-Month Averages:</strong></em> <strong>Rental vacancy rate:</strong> 15 percent <strong>Homeowner vacancy rate:</strong> 3.1 percent Memphis's proportion of vacant homes, both owned and rentals, puts it third overall, thanks to an average rental vacancy rate of 15 percent that is the fifth highest in the nation and the 3.1 percent homeowner vacancy rate that ranks 13th. <a href="http://www.cnbc.com/id/48209172?__source=huffpost|emptiestcities|&par=huffpost" target="_hplink">See the full slideshow: The 10 Emptiest U.S. Cities 2012</a>

  • 2. Dayton, OH

    <em><strong>12-Month Averages:</strong></em> <strong>Rental vacancy rate:</strong> 11.3 percent <strong>Homeowner vacancy rate:</strong>5.4 percent The good news is that Dayton's homeowner vacancy rate has been trending downward since its peak in the third quarter of 2011, when it stood at 6.5 percent. However, even this improving number gives Dayton the distinction of having the highest average homeowner vacancy rate in the country, according to the Census Data. And Dayton's average rental vacancy rate, at 11.3 percent, is higher than the 75 city average of 9.2 percent. The Census Bureau calculations put Dayton's gross vacancy rate at 16.9 percent, more than 6 percent above the large city average, and the highest in the country. <a href="http://www.cnbc.com/id/48209172?__source=huffpost|emptiestcities|&par=huffpost" target="_hplink">See the full slideshow: The 10 Emptiest U.S. Cities 2012</a>

  • 1. Orlando, FL

    <em><strong>12-Month Averages:</strong></em> <strong>Rental vacancy rate:</strong> 18.8 percent <strong>Homeowner vacancy rate:</strong> 2.2 percent The emptiest city in the United States is Orlando, Fla. The 12-month average for rental vacancies stands at a staggering 18.8 percent, while in the first quarter of 2012 this number was 22 percent, highest in the nation. Florida's third largest city also has an above-average homeowner vacancy rate, but this metric has been rising during the past two quarters, according to Census Bureau data. Despite its housing woes, Orlando has been able to avoid the financial woes of other cities, such as Harrisburg, Pa., and San Bernardino and Stockton, Calif. According to Orlando's most recent annual report, the city has more than $125 million of cash in its general fund and over $1.1 billion in total assets (including nearly an additional $300 million in cash and cash equivalents in other funds), compared with just under $600 million in total listed liabilities. <a href="http://www.cnbc.com/id/48209172?__source=huffpost|emptiestcities|&par=huffpost" target="_hplink">See the full slideshow: The 10 Emptiest U.S. Cities 2012</a>