The troubled city of Vernon has made important reforms but still needs to do more, according to a watchdog report on the city released this week.

The report by former California Attorney General John Van de Kamp, who the city hired to conduct an investigation into its affairs, said the city needs to implement more reforms such as slashing council members’ salaries, scaling back the use of outside attorneys and selling off housing stock, according to the Los Angeles Times.

Van de Kamp also found that many of Vernon’s few residents have direct connections to city officials, the newspaper said.

The former attorney general’s probe started in February as the city confronted a bill in the Legislature meant to dissolve the municipality.

Vernon has a tiny population but is home to many industrial businesses and has more than $500 million of outstanding bond debt. Legislation to disincorporate it has been moving through the Legislature.

The city was created to serve business and industry. It has fewer than 100 residents and found itself in the media spotlight in the wake of the salary scandal last summer in the neighboring city of Bell.

In October 2010, the office of then-Attorney General Jerry Brown — who was elected governor the following month — subpoenaed Vernon, seeking information about the salaries paid to top city executives.

The attorney general’s office noted that the city had paid its former administrator and attorney Eric Fresch more than $1.6 million in 2008, and that in 2009 Vernon paid two other city executives more than $785,000 each.

Former city administrator Bruce Malkenhorst Sr., who retired in 2005, receives an annual pension of more than $500,000.

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