After six years of aggressive investments, the city’s financial condition was deteriorating, and fast. With more than a half a billion dollars in accumulated debt and a net loss of more than $130 million in “net assets,” the rosy picture the city had painted was cracked.
The audit revealed extensive and luxurious travel by city officials across the nation and globe, often in first class and staying in fancy hotels.
To cover for the losses, the city has been forced to raise utility rates sharply, as many of the losses and investments were made through the city’s utility, including an expensive and expansive study of a new power generator, which was never built.
From the Los Angeles Times:
The city of Vernon has amassed nearly half a billion dollars of debt and suffered major losses over the last six years in an aggressive pursuit of investments through its electric utility, according to a Times analysis of the city’s financial records.
Even as the city’s losses mounted, Vernon’s leaders continued to push for more complex and grandiose projects. Officials bought a 15-year supply of natural gas at a fixed rate expecting prices would rise, only to see them fall precipitously. They also spent heavily on plans for a massive power station project that was later abandoned.
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