According to the L.A. Times, a soon-to-be released review of Bell's books by the L.A. County auditor-controller will show that the city is hovering on the brink of insolvency with a deficit of several million dollars.
To handle it, Bell may have to make drastic service cuts, including disbanding its police department.
Bell would then reportedly contract with the L.A. County Sheriff's Department.
Eight current and former city officials have been charged in a sweeping corruption case. All have pleaded not guilty.
The Associated Press contributed to this report.