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Vernon voters approve three tax measures

City leaders had said the measures were needed to close an estimated $8-million general fund deficit. Forty-two residents of the tiny industrial city cast ballots.

April 10, 2013|By Christine Mai-Duc, Los Angeles Times

Voters in Vernon — all 42 of them who turned out this week — have approved three tax measures that leaders in the southeast Los Angeles city said were critical to closing an estimated $8-million general fund deficit.

Officials had threatened deep cuts to the city's police and fire departments if the measures did not pass. While only 112 people live in the city, there are more than 1,800 businesses that will be hit hardest by the taxes.

"More than anything, this vote is an acknowledgment in the city of Vernon that public safety is important," city spokesman Fred MacFarlane said after Tuesday's balloting, adding that residents and businesses alike have made it clear that they don't want to contract out police and fire services.

The three measures are projected to raise $8 million annually for the city. About a dozen people looked on in a small City Hall conference room Tuesday as the 42 ballots were opened and counted. In the end, the tax hikes received more than 80% of the vote. The whole process took 30 minutes.

Measure K, which increases the city's business license tax, is expected to inject $4.5 million annually into the city's coffers, and hit area businesses hardest.

Measure L, a special parcel tax on non-residential lots, will bring in $1.9 million a year for 10 years. And Measure M, a 1% utility users tax, will raise an estimated $1.6 million before it sunsets in 2023.

Vernon, a tiny industrial town that in the past was dogged by corruption charges and election irregularities, has run deficits for more than 20 years, according to auditors.

In recent years, a series of bad investments, made worse by the troubled economy, have widened Vernon's budget gap. An expensive fight to save the city from disincorporation in 2011 didn't help.

Since then, city leaders have raised electric rates by about 40%, instituted an early retirement program, reduced worker benefits and sold 500 acre-feet of water rights to cut costs and boost revenue.

"We've come a really long way in the last couple of years," said John Van De Kamp, the city's independent reform monitor and California's former attorney general.

Mayor William Davis said he and others campaigned hard to regain community trust and win support for the taxes.

"I called them on the phone," Davis said. "I walked door to door."

But some business owners say they have had little say in shaping the proposals, despite the fact that employees and business far outumber the residents who decide their fate.

"Quite frankly, I've felt pretty helpless," said Doug Rawson, chief executive at a Vernon-based printing company that employs 80 people.

"I wouldn't mind paying if I felt it was well run," Rawson said. "But there's a governance problem in Vernon."

Davis said reform efforts are ongoing. Vernon's City Council is scheduled to take up the issue of equalizing council members' salaries — the source of repeated critiques from auditors — at its meeting next week.

City Administrator Mark Whitworth called Tuesday's results a "vote of confidence" in Vernon's leadership and said it would allow officials to focus on other pressing changes, such as bringing in a private housing development aimed at doubling the city's electorate.

Vernon, which owns virtually all of the residential property in the city and for years leased them at rock-bottom rents, has been accused of using housing to wield influence over its tenants.

Tuesday's vote also ends an ongoing battle between the city government and business leaders on how to address the budget deficits. Past efforts to draft parcel and utility user taxes drew heavy opposition from the business community.

"This overall tax plan is a much more thoughtful approach," said Marisa Olguin, president of the Vernon Chamber of Commerce, which negotiated with city leaders for months over the proposals.

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