Remember that recent story about the city officials in the small blue-collar town of Bell, CA, who were paying themselves huge fat salaries, while laying off essential city workers? Well, it seems like these officials may been using illegal money to do it. And State Controller John Chiang is trying to do something about it. Go get 'em, John!

An audit showed that the Los Angeles suburb exceeded a state cap when it raised its property tax rate in 2007 to pay for pension obligations, California Controller John Chiang said.

Chiang sent a letter Friday to the Los Angeles County auditor-controller, instructing the agency to reduce the tax rate. The drop would mean a $250-a-year reduction on the tax bill for a $275,000 home, Chiang's office said.

The county apportions the property taxes collected by local governments.

"These unlawful taxes must stop immediately," Chiang said in a statement. "Homeowners and property owners should not pay the price for this poor fiscal management."

A call to the auditor-controller's office seeking comment was not immediately returned.

Bell's interim chief administrative officer, Pedro Carrillo, said he would submit a resolution on Monday asking the City Council to immediately reduce the property tax rate to the lawful limit. Carrillo said he had not determined the financial impact on the city yet and it was unclear whether the overcharge would be returned to property owners. It might go into a state education fund.

The city will comply with "what the law requires us to do," he said. "We're trying to figure out if the excess will be returned."

The Los Angeles Times reported last month that Bell had the second-highest property tax rate in the county.

The audit was prompted by revelations that the city of about 40,000 — which is one of the poorest communities in the county — was paying its chief administrative officer more than $1.5 million a year in salary and benefits. In addition, the police chief made more than his counterpart in Los Angeles, and the mayor and three City Council members were earning about $100,000 a year for part-time work.

Carrillo's predecessor, Robert Rizzo, the police chief and another top official recently resigned and the council members voted to slash their pay by 90 percent.

The salaries are under investigation by Chiang's office, the state attorney general and the county district attorney.

The city and the state controller's office have been working together on the audit, which may be completed in the next two or three weeks, Carrillo said.

"We are trying to make certain that we restore trust in government," Carrillo said.

"We are turning over every stone and we will not, basically, rest until everything is analyzed and audited and the city is back to best practices and the city of Bell will begin to heal," Carrillo added.

Meanwhile, the Times reported this week that a Bell councilman listed a home in San Bernardino County as his primary residence even though he claims to live in a small church apartment in town.

Luis Artiga listed the unit at Bell Community Church, where he is pastor, on his voter registration. However, San Bernardino County tax records list a four-bedroom Chino home as his primary residence, qualifying him for a homeowner's exemption that reduces the assessed value by $7,000 and reduces the tax bill. Artiga said he mainly visits the home to water the plants.

Members of local city councils are legally required to live in their districts but Artiga currently isn't under investigation, said David Demerjian, head of the Los Angeles County district attorney's public integrity section.