Vernon's debt may save it from disincorporation

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Los Angeles County supervisors Tuesday said they may oppose the disincorporation of the troubled city of Vernon because the move could force the county to assume Vernon's debt. Their comments came as State Sen. Kevin deLeon, who represents Vernon, withdrew his support of a bill to disincorporate the city.

In a letter 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 that enjoy lower taxes in Vernon 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.

Meanwhile, Los Angeles County Supervisor Zev Yaroslavsky worried that Vernon would saddle the county with debt if the state dissolves it.

“They’re spending three times more than they’re taking in. They’ve got bonded indebtedness in their redevelopment agency. Who is going to pay for it? They’re electrical utility is leveraged up the kazoo. How are we going to take care of that?” he said.

State Assembly Speaker John Perez has suggested that a special district could administer the utility, and that the redevelopment agency would support itself.

Perez is pushing to disincorporate Vernon, after many of its top officials were convicted of corruption.

Business owners, who enjoy low taxes, have launched a major campaign to save the mostly industrial city just south of downtown L.A. Lilly Gavina Glascott employs 250 people at her coffee brewing company.

“Vernon is such an amazing place to work. My family is in the coffee business. We’ve been in the business for 130 years," she said. "This will affect so many lives, so many people.”

Vernon is home to more than 1,800 businesses and fewer than 100 residents. Critics say Vernon officials have prevented anyone who doesn’t support them from moving into the city.

John Vigna, a spokesman for Assembly Speaker Perez, said proposed 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.

The Associated Press contributed to this report.