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A California city may be dissolved for the first time in nearly 40 years under hotly contested legislation that cleared the Assembly today.

The measure by Assembly Speaker John A. Pérez targets the tiny Los Angeles County city of Vernon, which has only about 100 residents but is a rich industrial hub with a virtual army of lobbyists to fight the bill.

Assembly Bill 46 would transfer Vernon's duties and obligations to the county of Los Angeles. The issue is a big-money brawl pitting the Assembly leader against some of the Capitol's most powerful lobbyists, hired with city funds.

The Assembly passed the bill 58-7, sending the legislation to the Senate.

Vernon business and labor groups also are teaming up to fight the proposal, claiming that it could prompt businesses to close and cost numerous employees their jobs at a time of economic distress in California.

Perez, D-Los Angeles, contends that Vernon is run as a virtual fiefdom by a ruling class that virtually handpicks its colleagues: Four of five current City Council members joined the panel as appointees, not election winners.

Vernon went 25 years without a contested council race, until 2006, when incumbents won after a bitter fight in which the city contested the eligibility of three challengers, then refused to count ballots for six months.

Vernon sparked headlines last year for the indictment of former city manager Donal O'Callaghan on conflict of interest charges, and for an investigation by the attorney general's office into issues that included massive pay for the city's leaders in years past.

Six Vernon officials received more than $500,000 in compensation in one or more of the years between 2005 and 2010, city records show. Eric T. Fresch, former city attorney and city administrator, topped the list with annual earnings above $1 million for four straight years.

The Los Angeles Area Chamber of Commerce and the Los Angeles County Federation of Labor cite the potential impact on Vernon businesses as reason not to pass AB 46.

The city provides low energy rates, liberal zoning policies and other key services that benefit businesses and might be altered or abandoned under other leadership, AB 46 opponents contend.

The chamber of commerce said the business community is proposing a "series of major changes" to Vernon's charter that could solve many of the city's problems without dissolution.

"We believe these initiatives should be given the opportunity to play out before the state Legislature takes action to disincorporate the city of Vernon," the chamber's letter said.

Only two California cities have disincorporated in the past 40 years - Cabazon in 1972 and Hornitos in 1973.



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