Unable to obtain insurance, Maywood announced this week it would lay off nearly all its employees, disband its Police Department and entrust all municipal operations to the neighboring city of Bell.
But Bell may have problems of its own. The Los Angeles County district attorney's office said Wednesday it is investigating why council members of the small, working-class city are paid nearly $100,000 a year for a part-time job.
In a June 8 letter to Bell City Manager Robert Rizzo, David Demerjian, who heads the district attorney's Public Integrity Division, said a review of city records showed that council members each received $8,083.25 per month.
FULL COVERAGE: High salaries stir outrage in Bell
Demerjian said under state law and based on population, part-time council members in small cities should be paid a $400 monthly stipend. He asked the city for an explanation. In contrast, council members in Maywood earn about $300 a month.
Vice Mayor Teresa Jacobo said Demerjian's figures were misleading and that the monthly figure in Bell includes the cost of medical insurance, retirement and other benefits.
Mayor Oscar Hernandez said he knew nothing about the investigation.
"The average income for a person in our area is $32,000 and $38,000 a year," he said. "In a troubled city , the city council should get paid a little more."
Councilman Luis Artiga said he welcomed the investigation.
"I don't think we're stealing or doing anything wrong," he said.
Beginning July 1, Bell will take over running the day-to-day operation in Maywood, which reached a crisis level this week after its insurance was canceled.
Officials with groups and associations that track California municipalities say Maywood is the only city they can recall that has dismissed all its employees, except for the city manager, city attorney and elected officials. The Los Angeles County Sheriff's Department has been asked to patrol the city, located south of downtown Los Angeles.
Maywood officials said they were forced to take the action Monday since they were unable to obtain insurance because of the city's history of lawsuits, mainly involving its Police Department.
Demerjian said his investigators have received complaints about Maywood. Normally, he said, his office would investigate the complaints but decided to back off "because of ongoing investigations by other agencies." He would not elaborate or identify the agencies or say what they are looking into.
Bell has an estimated population of slightly less than 40,000 people. About 90% are Latino and 53% are foreign-born.
Demerjian called the Bell probe "an inquiry." He said it would become a full investigation if his office is convinced a crime has been committed.
His two-page letter outlines questions similar to those faced by five then-current and former Lynwood council members in 2007. In that case, the city leaders were prosecuted for allegedly boosting their salaries, which included for sitting on other city panels.
In his letter, Demerjian said that records appeared to show that council members received salaries of $150 a month and $60 a month for an organization called the CRA, which he said he assumed was the Community Redevelopment Agency.
The letter noted that council members received another $7,873.25 monthly for others groups identified only by acronyms, which appeared to include the Public Finance Authority, Surplus Property Authority and Bell Community Housing Authority.
In the Lynwood case, a former councilman told prosecutors that council members were dramatically increasing their salaries by attending meetings of two city agencies.
Demerjian said the Lynwood officials received $75,000 to $80,000 a year from those meetings.
Charges against two Lynwood officials were dropped, one pleaded guilty and two are awaiting trial.
The small industrial cities in southeast Los Angeles County, where Maywood and Bell are located, have seen several of their officials charged with corruption by federal and local authorities in recent years, including those in Bell Gardens, Compton, Huntington Park and South Gate.