Vernon, a southern California city with a tiny population, a history of corruption and a vast industrial base, is one step closer to losing its cityhood.
But it’s not going without a fight: In the first quarter this year alone, it has spent more than $560,000 on lobbying. The second-quarter tally is likely to be even higher when the final reports are filed at the end of this month.
Inch by inch, the move by Assembly Speaker John Pérez to abolish the city is moving forward. Part of his two-bill package to force disincorporation just emerged from the state Senate Governance and Finance Committee, making Vernon that much closer to becoming an unincorporated territory under the jurisdiction of L.A. County. A companion bill, already approved in the Assembly, awaits action on the Senate floor.
The bill approved by Senate Finance, AB 781, is the result of intense Capitol negotiations. It would create protective tax and business regulations designed to ease the process of disincorporation for businesses in Vernon, of which there are about 1,800.
The other bill, AB 46, says that any incorporated community with a population under 150 must be disbanded. Vernon, with a population of about 95, is the only California city to meet this requirement.
Pérez aide John Vigna says disincorporation may happen as soon as the end of August, since AB 46 is currently eligible to be taken to the Senate floor, while AB 781 still has the busy Senate Appropriations Committee to go through. All of this will likely happen after the month-long legislative recess, which starts this week.
But nothing is certain in the Capitol’s political wars and dramatic changes often occur at the 11th hour. Partisans in the fight over Vernon are preparing for a major battle.
The disincorporation bills are surrounded by much controversy.
First introduced by Pérez in December, AB 46 quickly drew strong opposition from the city of Vernon and businesses located in Vernon, who were concerned with how disincorporation would affect their ability to maintain operations in the city.
Pérez’s AB 781 was created to address that problem, though it met with a mixed reaction. The speaker’s allies contend the bill will alleviate businesses’ concerns that disincorporation will increase utility rates, drive up business regulation fees and take away the services they depend on, such as fire and police protection.
The measure would freeze business licensing fees for five years, freeze land uses and zoning legislations for 10 years, prohibit electrical rates from being increased unless certain steps are taken and create a community services district to maintain the services currently offered by the city.
“We’re replicating as close as possible the services the city already has right now,” Vigna said.
Not everyone agrees.
Vernon spokesman Fred MacFarlane finds major fault with the bill. “AB 781 is a scheme to kill off a city and replace it with another city,” he said.
According to MacFarlane, as soon as the city is disincorporated, businesses in Vernon will likely flee, since they will no longer have the benefits of Vernon that enticed them to set up shop there in the first place. These benefits include utility rates about 20 to 30 percent lower than average and a fire department with the ability to handle hazardous materials only about 30 others in the country can match.
“It won’t work the way the city has worked in terms of maintaining the range of services those businesses have come to depend on and the environment which made them want to locate in Vernon to establish their business headquarters,” MacFarlane said.
Foes of the bill also believe this mass exodus of businesses from Vernon will have a negative effect on the entire southern California economy, in addition to eliminating thousands of local jobs. Within its 5.2-mile boundary, Vernon currently employs 55,000 workers and provides more than $4.4 billion in salaries and wages every year, in addition to $330 million in state income and sales taxes.
They also say there are problems of representation that disincorporation would cause. He believes that eliminating the city and putting it under the jurisdiction of L.A. County would leave the people of Vernon with a government unable to understand their needs or adequately provide them with the services they currently enjoy.
“They know they will be lost in the shuffle,” MacFarlane said.
However, according to Vigna, this bill is necessary due to the issues of representation already apparent in the city.
“Vernon has frankly been hiding in plain sight for the last 40 or 50 years,” Vigna said. According to Vigna, this corruption stems from the fact that the city owns all of the housing in Vernon, leading to an illegitimate electorate, since the residents of Vernon have such close ties to the city council.
“Over the last 30 years the city has taken a lot of moves that have created this situation where the city has complete control over its electorate,” he said. “Most of them are friends or relatives of the city administration.”
He also cites examples of corruption from the city leaders, such as Bruce Malkenhorst Sr., a former administrator for the city, who currently faces charges for misusing city funds, as well as of collecting a $500,000 annual pension from the city.
“The city council is pretty much free to do whatever they want without regards to how it will affect surrounding communities,” Vigna said. “The fact is the reforms they have put forward are absolutely toothless. They’ve done nothing to change. They want to preserve their status quo.”
However, MacFarlane thinks there are still possible alternatives for the city. For example, he said that Vernon is currently working on creating a housing commission that is separate from the city council to determine housing policies in the city.
But despite this reform, MacFarlane doesn’t see a problem with the current housing situation in Vernon. “The city owns the housing,” he said. “That’s no different than the tens of thousands of people in L.A. County who live in public housing.”
Overall, MacFarlane believes disincorporation is not the right solution to Vernon’s problems and is too harsh a response to any issues the city may have.
“Disincorporation is a death penalty for a crosswalk offense,” he said.
Vigna, on the other hand, doesn’t think that Vernon has taken the necessary steps on its own to deal with its problems and has failed to bring forward any other feasible options.
“No one has put forward that alternative,” Vigna said. “Right now from our office’s view disincorporation is the only way that gets rid of corruption.”
Vigna added that AB 781 was created to keep what works within the city intact. “You’ve got this very complicated system, like a human body with a cancer,” he said. “Over the past few months we’ve been looking for ways to eliminate that cancer, which is the corrupt city council, while preserving the rest of the structure.”
According to Vigna, if AB 46 and 781 pass, the bills will take effect on January 1. This will start a 90-day countdown during which L.A. County can vote to preserve Vernon, which he said is not a likely outcome. After this a local agency formation commission will be responsible for winding down the city and setting up the community services district. After that, Vigna said Vernon would be an unincorporated territory, though businesses in the city will still be able
to maintain their operations.
“The only effect that’s going to happen is that the corrupt city council members are no longer going to be in a position to exercise their control,” he said.