Calif. senator backs away from dissolving Vernon

By Juliet Williams

Associated Press

Published: Tuesday, Aug. 23 2011 5:46 p.m. MDT

SACRAMENTO, Calif. — There are fewer than 100 residents in the Los Angeles-area city of Vernon, but its more than 1,800 businesses and questionable government operations have attracted a great deal of controversy as the powerful speaker of the state Assembly has sought to wipe the city off the map. He says it's too corrupt to save.

Far more people work for the city than live in it. Vernon has been a hub of manufacturing and industry for decades, a tightly packed parcel on the southeast edge of Los Angeles, where everything from clothes to chemicals and food products are made and shipped to businesses in Southern California and beyond.

Almost no one disputes the tiny city has been plagued by crooked operators. Three former top officials have been convicted on corruption charges for misusing public funds, and some employees and contractors have taken home nearly $1 million a year.

The high-stakes fight over the city's future is coming to a head this week as Perez tries to get his bill to disincorporate Vernon through the state Senate. On Tuesday, Sen. Kevin de Leon, head of the Senate's Democratic caucus, said he opposes the bill he had initially co-authored and offered to help Vernon keep its city status if it adopts significant reforms.

Perez's bill, AB46, sailed through the state Assembly, but he has struggled for votes in the Senate. Its failure would be a significant defeat for the speaker.

There are broader politics at play in the fight over Vernon, as Democratic lawmakers have faced heavy lobbying against the legislation from well-funded unions and an aggressive city-funded campaign to "Save Vernon Jobs."

In a letter to City Administrator Mark Whitworth, released Tuesday, de Leon said he is worried about more than the 55,000 jobs that could be lost if the city is dissolved and businesses flee the area.

"Given the fragile nature of our economy, I realized that much more examination was needed before taking such terminal action" to disincorporate the city, de Leon wrote.

His plan came eight months after Perez first proposed his Vernon bill, and with just over two weeks remaining in the legislative session.

Nathan Barankin, a spokesman for the speaker, said the reforms would be too little, too late to restore integrity to the scandal-plagued city.

"It's really clear that Vernon has no interest in reforming itself," Vigna said. "They're going to have to do a whole lot more to convince anyone up here that they don't have to be disincorporated."

He said the city could have immediately signaled its good intentions by selling its housing, which has been rented for years to family members and friends of local officials for far below-market rates. The city has retained the houses.

Vigna said Perez remains confident he has enough votes in the Senate to pass his bill before lawmakers recess Sept. 9.

Critics say Vernon is little more than a lucrative commercial zone controlled by a clique who personally benefit from it. Perez's bill came on the heels of a scandal in the nearby city of Bell, where eight former city officials now face criminal charges over mishandling public funds.

In Vernon, three former top city officials have been convicted of public corruption, including a former city manager who was paid up to $785,000 a year before he pleaded guilty to a conflict-of-interest charge for arranging a city contract for his wife. The Los Angeles Times reported the city also paid him a $500,000 settlement.

The newspaper also said the city has racked up nearly half a billion dollars in debt in the past six years in a series of questionable deals involving its electric utility. The deals included a speculative decision to buy a 15-year supply of natural gas at a fixed rate, only to see prices fall precipitously, and significant spending for a massive power station project that was later abandoned.

Supporters say the city was never intended to be a residential community, but was set up as a hub of industry because of its close proximity to the Port of Long Beach, rail lines and freeways. Its low power rates and business-friendly regulations have attracted a diverse range of manufacturers.

Even Texas Gov. Rick Perry has come calling, sending a letter this spring to Vernon business owners offering incentives for businesses to relocate if the city dissolves.

Among the changes de Leon is seeking are adopting a new charter to set uniform term limits for council members, set salary and benefit limits for city officials and ensuring competitive bidding for city contracts.

He also wants the city to set up an independent housing commission and build 50 new housing units to double the electorate, and start an environmental fund to "help mitigate the decades of noxious air released from Vernon."

Whitworth, the city manager, said he welcomed de Leon's proposals. He plans to discuss the suggestions at a special City Council meeting Thursday.

"His concerns are, I think they're valid, and I've been addressing them for a year and four months," Whitworth said. "To destroy a city is not the answer."

De Leon said if Vernon leaders don't show full commitment to the reforms, he'll support dissolving the city.

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