Vernon is fighting back!

No, not against defective products as David Horowitz would have it, but against a legislative power struggle by California Speaker of the Assembly John A. Pérez. The purpose of his Assembly Bill (AB) 46 is the disincorporation of cities with fewer than 150 residents, but is specifically targeting the Los Angeles County city of Vernon, which has about 100 residents and over 1,800 businesses that employ around 50,000 workers. Baker Commodities, Cargill Meat Solutions, Farmer John-Clougherty Packing, and West Coast Rendering are just a few of the many agriculture and industrial companies located in the 5.2 square mile city of Vernon, which was founded in 1905 and has a $4.5 billion private employer payroll.

Pérez’s reason for attacking Vernon is corruption. Since 2006, three city officials have pled guilty to public corruption charges, ranging from voter fraud and misappropriation of public funds to conflict-of-interest for hiring a spouse as a city contractor. While Pérez’s concerns are valid and should not be dismissed, why hasn’t he targeted the California city of Bell, also in Los Angeles County, where city officials were awarding themselves outlandish salaries?

In 2010, when the Los Angeles Times broke the news, Bell’s city manager was earning an annual salary of nearly $800,000, double that of the president of the United States, and its police chief was paid $457,000, more than the Los Angeles police chief made in a city of 3.8 million people. And city council members earned $100,000 a year for part-time work. Also at issue is that residents in this small working-class city of roughly 36,000, of which most are Hispanic, pay the second highest property tax rates in Los Angeles County. Last year, the city manager, mayor, assistant city manager, and five city council members were arrested and charged with misappropriation of public funds. The California Attorney General’s office has filed a lawsuit against eight former and current employees. The investigation is still on-going.

But Pérez’s bill isn’t about the city of Bell, but a city that could bring much needed revenue to a county struggling to balance its immense budget deficit. Vernon has its own power company, fire and police departments, and other public services. If AB 46 were to pass and Vernon was to be disincorporated, costs to companies in Vernon are predicted to rise 20 to 40 percent in increased electric and insurance rates and other costs of doing business. One renderer alone expects a $5 million per year cost increase! It is also estimated that 11,000 to 12,000 jobs would be lost, in a state with an unemployment rate of nearly 12 percent!

Note: Pérez represents California’s 46th Assembly District, comprising the cities of Vernon, Maywood, Huntington Park as well as the communities of Boyle Heights, downtown Los Angeles, unincorporated East Los Angeles, and parts of South Los Angeles.

When Pérez first introduced AB 46 back in April, he had quite a bit of support. The bill has already passed the Assembly but is now finding some opposition in the state Senate. Over the past few months, the Vernon Chamber of Commerce and city businesses have been proactive at educating state legislators and the general public about the city and its jobs that benefit the surrounding communities. Vernon’s city council is also enacting reforms, such as imposing term limits, creating a housing commission, and docking council salaries by nearly two-thirds. But the battle is far from over.

Just before leaving for summer break in mid-July, companion bill AB 781 that details what will happen if Vernon is disincorporated was introduced. AB 781 must still go through appropriations and other hearings when the Senate reconvenes August 15, and both bills must pass in order for AB 46 to take effect. But the extra month will give a coalition of business owners and labor representatives more time to lobby against the bill. However, due to Pérez’s position, legislators face possible ramifications if they don’t support his bill. Talk about corruption!

AB 46 and 781 bills are just two more examples of the ever-increasing difficult business climate for renderers in California.

UPDATE AUG 29, 2011: The California Senate voted down AB 46 on a 17-13 vote, with many Democrats (10) sitting out the vote. According to a Sacramento Bee article, “Democrats were torn between the powerful speaker’s legislation and a counter-proposal by Senator Kevin de Leon, another Los Angeles Democrat and sometimes rival of Perez who just one week prior proposed a laundry list of reforms the city should make in order to stave off disincorporation.”

“The world is watching,” de Leon is quoted in the Bee as telling senators before the vote. “If they don’t implement the aggressive reforms with teeth, we go forward with what we have to do.” Perez called the Senate vote a deep disappointment to residents in Vernon and neighboring communities, saying the senators have given the city 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.”

Rendertorial – August 2011 RENDER | back