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Vernon Official: Annexation To Put LA $1B In Debt

LOS ANGELES (CBS) — City officials say it's time to seriously consider annexing the troubled and tiny city of Vernon.

Chief Legislative Analyst Gerry Miller's recommendation that Los Angeles mayor and City Council begin talking with Vernon's elected officials about "voluntary annexation" cleared a council committee Tuesday, and soon will be heard by the full council.

Consolidating the city into Los Angeles under current state law would require the approval of Vernon's voters.

Miller's endorsement of proposed state legislation calling for the "involuntary dissolution" of cities with fewer than 150 residents was also forwarded to the full council today — as a back-up plan if Vernon's elected officials balk at joining L.A.

No vote was taken on the proposals, because only one member of the City Council's Planning and Land Use Management Committee was present at today's meeting.

Councilman Jose Huizar used his authority as acting chairman of the committee to forward Miller's recommendations to the full council.

"I am quite surprised that it would get to this point, but I think the fact that one city is proposing to annex another shows that that relationship is not a good one," he said. "We should not have allowed it to get to this point. "

"I think this is worthy of a discussion, I think the full council should have this discussion," Huizar added.

Vernon City Administrator Mark Whitworth said annexation, initially proposed by Los Angeles City Councilwoman Janice Hahn, would result in the loss of thousands of jobs, and put L.A. in deeper financial peril.

"The city of L.A. would be absorbing about $1 billion of debt. Are you ready for that?" Whitworth said, directing his question at Miller.

"I've met with many of these business owners, and everyone — to a T — has said, `We won't only leave Vernon, we'll leave the state or we'll close our doors,"' Whitworth said. "You're talking 50,000 jobs. Are you ready to face that?"

Miller conceded that annexation could cause "issues" related to the operation of Vernon's municipal utilities, noting the city owns and operates its own water, power and gas services.

However, he also noted that Vernon had $190 million in revenues and $381 million in expenses in 2007-08.

"Should Vernon cease to exist as a charter city, the most viable candidate for annexation would be the city of Los Angeles, and it may be in our mutual interests to proceed with the process," Miller said. "Accordingly, we recommend pursuing the matter through voluntary annexation, or, should the state pursue involuntary dissolution, through an alternative process through
the state."

Vernon was incorporated in 1905, bounded by Los Angeles, Commerce, Bell, Maywood and Huntington Park.

It spans 5.2 square miles and has a population of about 100.

In the past, according to Miller, Los Angeles consolidated governmental operations with a handful of independent communities, including Eagle Rock, Hollywood, Hyde Park, Sawtelle, San Pedro, Venice and Wilmington. The last consolidation was approved in 1932 when Tujunga became part of Los Angeles.

Vernon's former city administrator was indicted in October in the latest scandal in the industrial city just southeast of downtown, which has been controlled for decades by a few families and their associates.

All of Vernon's voters live in city-owned housing for which they pay below-market rent, and that is believed to influence how they vote.

Several Vernon officials have made between $500,000 and $1 million a year since 2005, with former city attorney and city administrator Eric T. Fresch making as much as $1.65 million in 2008. The officials traveled first-class on trips to New York and Europe and stayed at luxury hotels, according to The Los Angeles Times.

Three years ago, Vernon's longtime mayor was charged with voter fraud and the city administrator was charged with public corruption. Prosecutors said then-mayor Leonis Malburg lived in a mansion in Hancock Park and lied for years about living in Vernon. He was convicted last year.

Bruce Malkenhorst, the former city administrator, awaits trial on charges that he misappropriated tens of thousands of dollars.

(©2010 CBS Local Media, a division of CBS Radio Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Wire services contributed to this report.)

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