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Another City Like Bell? Vernon City Salaries Raise Eyebrows

VERNON, Calif. (AP) — Fewer than 100 residents live in this small burg in the shadow of Los Angeles, surrounded by miles of gritty, occasionally smelly warehouses, meatpacking plants and manufacturing businesses. It is one of the least populated, most nondescript municipalities in the country -- and one of the richest.

With 1,800 businesses providing an annual tax base of $334 million to a town with no parks, one school and only one residential street to maintain, there is plenty of money to go around.

There is so much, in fact, that Vernon's former city manager was paid $785,000 last year. The guy he replaced earned $1.65 million the year before and another city manager, who retired in 2005, pulls down an annual pension of $500,000.

But the money pot could be the 105-year-old city's undoing.

Since it came to light earlier this year, state officials have moved to take away Vernon's status as a city, boot its elected officials out of their handsome City Hall offices and turn government operations over to Los Angeles County.

Although it was the high salaries, first reported by the Los Angeles Times, that got people's attention, proponents of putting Vernon under the county's control say the real issue is accountability -- and their belief that in Vernon there is none.

"We cannot tolerate a situation where a handful of individuals are able to use an entire city as their own personal fiefdom with no impunity," said state Assembly Speaker John Perez, who
introduced a bill earlier this month that would allow disincorporation of any city with fewer than 150 residents.

All but a handful of Vernon's residents (89 according to the most recent U.S. Census figures) either work for the city, its officials or are related to them. Most also live in city-owned houses or apartments controlled by city leaders. The residents in turn routinely re-elect the same people, with some City Council members remaining in office 40 years or more.

Jaime Regalado, director of the Edmund G. "Pat" Brown Institute of Public Affairs at California State University, Los Angeles, has for years studied Vernon and other gritty industrial cities abutting the southern and eastern flanks of Los Angeles. He said he's never seen another quite like Vernon.

"They essentially have lifetime gigs," he said of the Vernon City Council. "Elections don't seem to be fair, very few of the residents, few as they are, bother to vote and the elections are not competitive anyway because the electoral base seems to be almost owned by those in power."

Four years ago, when a group of outsiders arrived in the city, registered to vote and attempted to run for office, Vernon officials declared the one residence they moved into a fire hazard and evicted them.

But Vernon residents say they prefer to focus on the positive.

The city has its own police and fire departments, with prompt response times, they point out, and its own utility company, which provides businesses with reliable electricity generated by its own
power plant.

"This city, you can't compare it to any other city in the USA," says Joe Eagan, who runs La Villa Basque. The neighborhood bistro, with its early-1960s ambience reflected by a dark, wood-paneled dining room and leather-seated lounge, serves as the unofficial gathering place for Vernon's movers and shakers.

"What they pay the managers here, well the city, it's really run like a corporation. And would you go to Microsoft and complain about what they pay Bill Gates," asked Eagan, a friendly, outgoing
man who lives in an apartment above the restaurant.

Some of Vernon's business owners, who employ an estimated 50,000 people in the city's 5.2-square mile warren of factories, say they would seriously consider moving if the city is disincorporated.

"Honestly, if that happens, I would leave," said Joseph Soleimani, whose family owns Sol-Pak, a manufacturer of plastic food containers distributed nationwide.

Before locating to Vernon in 2004, he said, the company looked at sites elsewhere, including Arizona and Nevada. They selected the city that is also home to the giant hot-dog maker Farmer John and the high-end clothier True Religion Jeans for its business-friendly attitude, vigilant police department, streamlined licensing process and access to cheap, reliable power. They worry that will all end if the county takes over.

Like many others in town, Soleimani and Eagan suspect a municipal salary scandal that brought worldwide attention to the neighboring city of Bell prompted state officials to take a closer look at Vernon. Eight current and former officials in modest, blue-collar Bell have been charged with looting their treasury of $5.5 million to pay themselves salaries that are in the range of
Vernon's.

"But it's not like that here," Eagan said, adding Vernon officials deserve what they make and have the business tax base to support their salaries without cheating anyone.

That's not to say some Vernon officials haven't run afoul of the law. Former City Manager Donal O'Callaghan, who was paid $785,000 last year, recently pleaded not guilty to felony conflict of
interest charges that involved hiring his wife for different jobs, including one that paid $40 an hour to fill out time cards for employees of a company providing services to Vernon.

La Villa Basque, meanwhile, is owned by Leonis Malburg, grandson of one of Vernon's founders and a member of the City Council for more than 50 years until he resigned in 2009, shortly before being convicted of voter fraud.

A jury concluded Malburg lived in a mansion in Los Angeles' wealthy Hancock Park district and not, as he claimed, in a modest condo in an office building down the street from his restaurant. A
woman who recently answered the phone at the condo said he wasn't there and had no interest in discussing Vernon.

The city's leaders also didn't care to talk.

"I'm sorry, I don't have anything to say about that at this time," said Councilman Dan Newmire as he stood in the doorway of his home, one of six that sit on a busy street next to the city's power plant.

The mayor and other council members did not respond to messages, and City Manager Mark Whitworth declined an interview request.

Whitworth said in a statement posted on the city's website that he is opposed to breaking up Vernon, adding that if state legislators succeed no California city would be safe.

Perez says that's not true, adding his bill is strictly aimed at Vernon. What's more, he said, under current state law a population of at least 500 is required to incorporate, meaning Vernon couldn't
become a city today if it wasn't already one.

There was a time, 50 years ago, when Vernon had about that many people, said Mike Ybarra, 58, who grew up in the city. He lives in what he's been told is one of Vernon's last three privately owned homes, one he built himself years ago. Most of the others, he said, were bought up and demolished over the years as Vernon expanded its industrial base.

Ybarra, whose late father served on the City Council for 43 years, acknowledges he's concerned about some of the allegations that have been made against Vernon officials. But he won't judge them, he says, because he doesn't have all the facts. And, in any case, he believes Vernon should be allowed to sort out its own problems.

"We are a small, unique city," he said. "I think some things may have to change, but if they do I'd like to see the city make those changes."

(© Copyright 2010 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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