Los Angeles Business Journal

Vernon Dissolution Bill Fails to Pass State Senate

By Howard Fine Originally published August 29, 2011 at 5:10 p.m., updated August 30, 2011 at 11:53 a.m.

Editor's Note: This story has been changed from the original to correct tally of the senate vote.

A bill to dissolve the manufacturing city of Vernon failed to pass the state Senate on Monday afternoon.

Only 13 senators voted in favor of the bill, while 17 voted against it; 10 senators did not cast votes.

“The Senate chose to ignore decades of corruption in Vernon,” said Assembly Speaker John Perez, the bill's author. “They have given Vernon a free pass to continue doing business as usual, and those senators will own the responsibility for any misdeeds that may occur in the future.”

Perez, a Los Angeles Democrat, had believed that dissolving the city was the only way to stop decades of corruption in the exclusively manufacturing city with only about 100 residents. Three former city officials have been convicted on corruption charges, while several officials pulled down more than $500,000 a year in salaries and benefits.

Perez’s bill would have put the city under Los Angeles County jurisdiction. A companion bill would have preserved current tax and fee rates on Vernon businesses for five years.

Businesses in Vernon and local labor groups vigorously opposed the Perez measure, saying it would force business costs up sharply and cause many businesses to close their doors or flee to cheaper locales. They pushed the Vernon City Council to enact reforms of its own to head off the threat of dissolution.

“We are extremely pleased and grateful that the Senate rebuffed Speaker Perez and his ill-conceived legislation that threatened tens of thousands of California jobs and businesses,” said Marisa Olguin, president of the Vernon Chamber of Commerce.

Two key developments last week helped stymie the measure. One was the announcement of opposition from state Sen. Kevin de Leon, D-Los Angeles, whose district includes Vernon. The other was revelations of soured investments by Vernon city officials, which led the Los Angeles County Board of Supervisors to voice concern about the prospect of taking over the city.