Business paradise or den of thieves?
An effort to abolish a highly unusual Californian city
May 5th 2011 | VERNON | from the print edition
EVEN Vernon’s logo proclaims that the city is “exclusively industrial”, and that is no exaggeration. It was founded in 1905 at a railway crossing along the Los Angeles River as a sort of Eden for business, especially the smelly, dirty and blue-collar manufacturing sort. An aerial view shows neat boundaries around its 5.2 square miles (13.5 square kilometres), as the residential neighbourhoods of Los Angeles County suddenly give way to huge blocks of warehouses and factories. Lorries seem to outnumber cars on Vernon’s streets. The whiff of pigs being slaughtered hangs over those parts not covered by the aroma of coffee being processed.
In most of the world, it is inconceivable that Vernon could even be considered a “city”. It has about 1,800 businesses that employ more than 50,000 workers who live elsewhere in Los Angeles County. But it has only 96 actual residents, and those live in housing tucked improbably between power stations and warehouses and mostly owned by the city.
But in southern California tiny municipalities are not unusual. A clutch of five counties there—Los Angeles, Orange, Ventura, Riverside and San Bernardino—have, between them, no fewer than 183 independent cities. That is because, for much of the past century, California incorporated cities rather as Silicon Valley today launches start-ups. In a 1967 book title, Los Angeles was “The Fragmented Metropolis”.
But city-founding has now abruptly gone out of fashion and into reverse. First, several Californian cities—such as Vernon’s neighbour, Maywood—ran into financial trouble largely caused by the recession. They decided they could no longer afford to duplicate all the intricate layers of local democracy and administration, and have tried to consolidate either with other cities or with the county itself.
Then, last year, came discoveries of corruption. Most notorious was Bell, another of Vernon’s neighbours, where eight officials lived in remarkable style, levied illegally high taxes and are now on trial. Another city nearby, Montebello, is also being investigated on suspicions that it cooked its books.
So it was perhaps only a matter of time before lawmakers took an interest in the bizarre case of Vernon. The city happens to be in the district of assemblyman John Pérez, a Democrat who is also the assembly’s speaker and an up-and-coming sort. Mr Pérez, citing an “unprecedented pattern of corruption”, has now shepherded a bill through his lower house that would disincorporate any city with fewer than 150 residents and have it be absorbed by its county. That happens to affect only one Californian city, Vernon.
Mr Pérez has some good reasons. Two of Vernon’s former city officials are facing criminal corruption charges and a former mayor has already been convicted. Their alleged shenanigans included rigged salaries, outlandish expenses and perks. Vernon has usually appointed its officials, rather than electing them, since positions were not even contested. The few residents, since they live in city housing, have been politically tractable.
But for Vernon’s businesses disincorporation is a step too far. After all, Vernon is really meant to be run for their benefit, not for that of the 96 residents. To a large extent, Vernon represents all that is left of manufacturing industry in Los Angeles County. Who else in Los Angeles these days would welcome belching trucks and slaughterhouses? If Vernon loses its independence, its businessmen say, its electricity company (now city-owned) will have to increase its rates, thus erasing a crucial competitive advantage. Eric Gustafson, the third-generation manager of a family-run maker of lards and shortenings, says that “if Vernon were not a city we wouldn’t be here,” and “if we’re forced to move, we’re not staying in this state.” He’d move his firm to the Midwest, he reckons.
The threat of job losses and a new manufacturing exodus naturally gets legislators’ attention at a time when California has barely begun recovering from recession. Mr Pérez thinks the threats are overblown. But Vernon, and most of its business customers, plan to fight his bill in the state senate, then on the governor’s desk and in the courts.
Even if they prevail, however, Mr Pérez’s bill will have done some good. Vernon’s defence strategy is to reform itself voluntarily and aggressively so that corruption will cease even without disincorporation, says Mark Whitworth, the current city administrator and fire chief. There will be term limits for officials, caps on salaries, transparency in housing and so forth. After all, why get rid of an honest city? This bit of the peculiar municipal quilt that is Los Angeles may just persist.