City Council Agenda Report
Meeting Date: September 16, 2025
From: Brian Saeki, City Administrator
Department: City Administration
Submitted by: Brian Saeki, City Administrator
Subject
Memorandum of Understanding Between the Cities of Commerce, Irwindale, Santa Fe Springs, Industry, and Vernon
Recommendation
Approve and authorize the Mayor to execute a Memorandum of Understanding with the Cities of Commerce, Irwindale, Santa Fe Springs, and Industry, effective September 1, 2025, for the purpose of uniting efforts to advocate for, advance, and plan shared priorities to seek state and federal funding, and advocate for and advance legislative and administrative policies to address the unique needs and benefits that their industrial and commercial activities offer Los Angeles County and the State of California.
Background
The Cities of Commerce, Industry, Irwindale, Santa Fe Springs, and Vernon are located in Los Angeles County and form one of the most significant industrial and commercial corridors in California. Together, these five cities support approximately 500,000 employees across key economic sectors, including manufacturing, wholesale and distribution, transportation and logistics, and e-commerce. These sectors are vital not only to the regional economy but also to the fiscal health of the State of California, contributing substantial revenues through property, sales, and other taxes.
Despite their critical economic contributions, these cities are consistently underfunded when it comes to state and federal infrastructure investment, particularly for road and street improvements, which are commonly allocated on a per capita basis. With relatively low residential populations but large daytime working populations and heavy industrial activity, these cities face disproportionate wear on infrastructure without receiving the commensurate share of funding.
For example, the City of Vernon—despite serving as a major hub for industrial and commercial activity—faces significant funding challenges when it comes to maintaining its heavily utilized infrastructure. Ideally, Vernon should be able to rely on dedicated transportation funding sources such as SB 1 (Road Repair and Accountability Act), the Highway Users Tax Account (HUTA), and other state and federal programs specifically designed to support road and infrastructure maintenance.
However, because these funds are typically distributed based on residential population, Vernon receives disproportionately low allocations, despite supporting a daytime population of approximately 55,000 workers and experiencing substantial wear and tear on its roads due to heavy industrial and freight traffic.
As a result, the City is often forced to use General Fund dollars—intended for core services and community needs—to backfill infrastructure costs that should be covered by transportationspecific revenues. This structural funding inequity places a significant fiscal burden on Vernon and other similarly situated industrial cities and underscores the need for a revised funding approach that accounts for daytime population, employment density, and economic output.
Recognizing this inequity and the shared challenges they face, the Cities of Commerce, Industry, Irwindale, Santa Fe Springs, and Vernon have agreed to formalize their collaboration through a Memorandum of Understanding (MOU). The MOU outlines a unified strategy to advocate for fair and equitable distribution of infrastructure and capital improvement funding, as well as for legislative and administrative policies that recognize and support the unique role of industrial and commercial cities.
This coordinated effort seeks to secure state and federal capital investments that reflect the true usage and economic impact of these cities—not just their residential populations. It also aims to preserve local fiscal control and ensure the sustainability of infrastructure that supports not only local industry but the broader California economy.
The MOU is effective from September 1, 2025, through August 31, 2030 and allows any City to terminate its participation with 45 days’ written notice. While the MOU creates a multijurisdictional coalition, the Cities agree it is not a separate legal entity and would not have the powers of a decision-making legislative body. The MOU specifies there are no dues required for participation in the MOU and confirms that each participating city will be responsible for their own respective costs related to any activities related to the MOU.
The MOU has been reviewed and approved as to form by the City Attorney.
Fiscal Impact
There is no fiscal impact associated with this report.
Attachments
1. MOU Between Cities of Commerce, Industry, Irwindale, Santa Fe Springs, and Vernon