The embattled city of Vernon has lost significant sums of money through investments in the energy business, according to a Times investigation.
The Times hired an accounting firm to review Vernon's annual financial reports dating to 2001.
Raman Sain, a principal at Holthouse, Carlin & Van Trigt, the largest accounting firm in Southern California, said the reports outline a steady decline in the city's finances since 2005 due to swelling debt, dwindling revenues and increased spending on salaries, benefits and legal fees.
The firm found that Vernon lost more than $130 million in "net assets" in the last six years. Sain said net assets are an important measure of a city's financial health because they compare the city's cash, property and other assets against its debts. Vernon's own auditor also described net assets as a "useful indicator" of the city's finances.
"It's not good," Sain said. "The net assets of the city are declining significantly, and the trend is so steep."
John Naimo, Los Angeles County's assistant auditor-controller who also examined Vernon's audited records on behalf of The Times, said: "Overall, it's a deteriorating picture."
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-- Sam Allen and Hector Becerra
Photo: Kirk McKoy / Los Angeles Times
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