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NC Plan Session IV Worksheet

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  • 1. Neighborhood Council Plan Review and Reform Initiative— 1 —Session IV Worksheet:Neighborhood Council Funding, Grants and Donations• Should the annual allocation system providing an equal amount of money to each neighborhood council, regardless of population, be maintained?• If not, should a system allocating funding based on population be instituted?• Should a hybrid system allocating some funding equally and some on a per capita basis be considered?• Should regulations be established to allow neighborhood councils to seek grants, donations, or other sources of income independent of municipal funds?• Should neighborhood councils be required to spend certain percentages for certain categories which are aligned with the mission of the neighborhood council program, e.g., 25 percent of budget for outreach?• Should neighborhood councils be allowed to provide funds to other city departments?— LOS ANGELES CITY CHARTER ARTICLE IX —Sec. 911. Appropriation.The Mayor and Council shall appropriate funds for the Department of Neighborhood Empowerment and for the startup andfunctioning of neighborhood councils for the first two years after the effective date of this Article. Funds shall be appropri-ated into a special fund to be established by ordinance. The Mayor and Council shall thereafter appropriate funds for thedepartment and neighborhood councils at least one year in advance of each subsequent fiscal year.— LOS ANGELES ADMINISTRATIVE CODE CHAPTER 28 —Sec. 22.810.1. Regulations Implementing the Plan for a Citywide System of Neighborhood Councils (Plan).(g) Funding.(1) Money appropriated in the budget each year for certified Neighborhood Councils for costs related to the functions,operations, and duties of being a certified Neighborhood Council shall be placed in the Department of Neighborhood Em-powerment Fund. The functions, operations, and duties of a certified Neighborhood Council include, but are not limitedto, meeting and office space, office equipment, computers, supplies, and communications, such as the costs associated withnewsletters, postage, or printing written materials. At the discretion of each Neighborhood Council, and as approved bythe Department of Neighborhood Empowerment, all or part of the money so appropriated may be used for neighborhoodimprovement projects.(2) Any money which the Mayor and Council appropriate as grant funds each fiscal year for certified Neighborhood Coun-cils shall be available for various neighborhood improvement projects. In order to be eligible for grant money, a certifiedNeighborhood Council shall submit an application to the Department and may be awarded grants, pursuant to the provi-sions as set forth in Article IX Section 2 of the Plan.The following sections are no longer in effect as a result of three-year “sunset” clauses. They are included for informationalpurposes only.Sec. 22.801.1. Acceptance of Donations and Gifts by the Department.A Neighborhood Council may accept gifts as described in Section 22.814 of this Code or request that the Department or CityCouncil accept the gift on its behalf. The Department, under the limited circumstances set forth below, shall have the powerand authority to accept gifts on behalf of the City of Los Angeles that relate to the Department’s programs and activities, thatrelate to any or all of the Neighborhood Councils, or that relate to the Citywide system of Neighborhood Councils.If the Department is acting to accept a gift as authorized under this section, then the General Manager of the Department,or the General Manager’s designee, shall be the agent authorized to accept gifts.Gifts may include any item, monetary or non-monetary, tangible or intangible, that is contributed, provided, given, trans-ferred, donated, bequeathed or devised to the City. The authority to accept gifts includes the authority to reject or rescind theacceptance of any gift at any time. Nothing in this section requires the acceptance or retention of any gift.(a) Limitations on Acceptance of Gifts. With the exception of a gift that is a leasehold interest for office, storage or meeting
  • 2. Neighborhood Council Plan Review and Reform Initiative— 2 —space, as further described in Subsection (b) below, no gift may be accepted by the Department that exceeds the value of$10,000 and any gift in excess of this amount shall be submitted to City Council for acceptance or rejection.(b) Donated Office Space or Meeting Space. The Neighborhood Councils shall not have any authority to accept any interestin real property, including any fee simple interest or any leasehold interest. However, a Neighborhood Council may requestthat the Department, which is hereby granted the authority, accept a lease on its behalf as long as the gift is a leasehold inter-est for office, storage, or meeting space, the lease does not exceed a one-year term, and the leasehold interest is valued lessthan $20,000 per year or $1,666.66 per month. If the value for that leasehold gift exceeds these allowable monetary thresholdvalues or the allowable leasehold term, then the leasehold gift must be submitted to City Council for acceptance or rejection.(c) Assessment of Value. For the purposes of determining the value of any gift accepted by the Department, or when theDepartment is requested to accept a gift by any Neighborhood Council, including determining whether the gift is valued inexcess of the monetary threshold value that requires the gift to be submitted to City Council, then the value of the gift shallbe calculated as follows:(1) If the gift is monetary in nature, then the value is measured in United States dollars.(2) The value of all non-monetary gifts is determined in the sole discretion of the General Manager, or the General Manager’sdesignee, based on his or her determination of the fair-market value of the gift.(d) Donor Disclosure Form. No gift valued at more than $500 shall be accepted by the Department or the NeighborhoodCouncils unless the person or entity that is the source of the gift completes the Department’s approved donor disclosure form.The requirement for completing a donor disclosure form shall not be avoided by donating successive or incremental giftsduring a single calendar year, where the successive or incremental gifts would be independently valued at less than $500,but the accumulated value of the gifts over the course of that calendar year exceeds the value of $500. If any person givesor donates an accumulation of gifts within the same calendar year that total in value more than $500, then the donor mustcomplete the donor disclosure form for each gift that exceeds this allowable accumulated total.The donor disclosure form shall be dated and completed with information from the donor that includes and memorializesthe following information required by State law:(1) That the Department or the Neighborhood Council, whichever is applicable, shall receive and control the gift;(2) That the gift shall be used solely for official business related to the Neighborhood Council system;(3) Whether the gift contains any restrictions, limitations or conditions, so long as the donor does not designate the giftfor any specific person(s). The donor shall state and list the names of persons or the category of persons using the gift, e.g.,the board of the Neighborhood Council, the executive committee of the Neighborhood Council, or the stakeholders of theNeighborhood Council. However, the Department, or the Neighborhood Council if the Neighborhood Council controls thegift, shall determine in its sole discretion the specific person(s) who may use the gift; and(4) States the donor’s name or identifying information, address, a description of the gift, and the fair-market value or an es-timate of the fair-market value for the gift.In addition, the donor disclosure form shall contain an area for the entry of information by the Department or the Neighbor-hood Council that describes the official use for the gift.The donor disclosure form shall also require the donor to disclose any contract, license, permit or project that the donor iscurrently seeking, intends to seek, or sought in the past six months from the City.The donor disclosure form shall be filed with the Department within 30 days of the receipt of the gift.(e) Post Acceptance Handling of Gifts. Monetary gifts accepted by the Department shall be deposited into the NeighborhoodEmpowerment Trust Fund (Trust Fund) in accordance with Section 5.485 of this Code. If the Department accepts an uncon-ditional monetary gift on behalf of a Neighborhood Council, then the Department shall deposit 10% of the amount of thegift into a special account for disbursement to Neighborhood Councils in economically disadvantaged areas consistent withSection 5.485(d) of this Code. The Department shall accept non-monetary gifts by delivery, receipt of physical possession, orother method of transfer of title or possession as is required by law. The Department shall track physical inventory donatedto the Neighborhood Council system by maintaining any necessary perpetual stock records of furniture or equipment, asrequired under Sections 7.79 and 7.84 of this Code. The Department will enter all monetary gifts pertaining to the Neigh-borhood Council system into the City’s Financial Management Information System (FMIS) and will enter all non-monetarygifts pertaining to the Neighborhood Council system and valued above $5,000 into the Citywide Inventory System (CWIS).Items valued above $5,000 will be assigned an inventory control number and an inventory tag will be provided to the Neigh-borhood Council by the Department for those items. The Department shall insure that all gifts accepted for the benefit ofthe Neighborhood Council system are appropriately registered or recorded in accordance with the provisions in this section.(f) Restricted Gifts. The Department shall comply with any special terms, conditions or restrictions on any gift. In addition,
  • 3. Neighborhood Council Plan Review and Reform Initiative— 3 —if any monetary gift that is accepted by the Department contains terms, conditions or restrictions, then the monies shall bedeposited in an appropriate account in the Trust Fund in accordance with Section 5.485 of this Code. The Department shallnotify the City Controller of any special terms, conditions or restrictions placed on the use of those monies.(g) Expenditure of Monies. The Department is authorized to expend monies from the Trust Fund, including expendituresfrom any account or sub-account in the Trust Fund, either on behalf of the Department or on behalf of any or all of thecertified Neighborhood Councils, and may expend funds for the purchase of equipment, services or furnishings in sup-port of the established programs and activities of the Department or the Neighborhood Councils, or in furtherance of thepurposes or goals of the Citywide system of Neighborhood Councils, as stated in the City Charter, the Plan, and the Regula-tions implementing the Plan, subject to any special terms, conditions or restrictions attached to the gift. Monies may also beexpended on neighborhood improvement projects that have been approved under the administrative processes establishedby the Department. Prior to the expenditure of any monies in any account or sub-account that was established because a giftcontained a special term, condition or restriction, the Department shall provide the Controller with written documentationto demonstrate that any expenditure complies with the special term, condition or restriction.(h) Record-Keeping. The Department shall prepare a periodic written report that contains information covering all gifts ac-cepted in the preceding six-month period of time, commencing on April 1st and October 1st of each year, and this reportshall be submitted to City Council with copies to the Controller and the Board of Neighborhood Commissioners within 30days after the close of the six-month period. This report to City Council shall include the following information:(1) An accounting of the Trust Fund and the Neighborhood Council checking accounts, including a balance statement, a listof deposits, identification of the name of the donor that is the source of the donated monies, the date of the deposit, a list ofall expenditures, including the payee, the amount paid, the date, and the purpose of each expenditure.(2) A summary of the donor disclosure forms that have been filed with the Department that lists the gifts that have been ac-cepted by the City through the Department and/or Neighborhood Councils. This summary shall state the donor’s name, abrief description of the gift, the date of the gift’s acceptance, and the gift’s value. Copies of the relevant donor disclosure formsthat have been referenced in the summary shall be affixed to the summary.(3) For those accepted gifts in which a donor disclosure was not submitted, the Department shall provide the following in-formation:(i) That the Department or the Neighborhood Council, whichever is applicable, shall receive and control the gift.(ii) That the gift shall be used solely for official business related to the Neighborhood Council system.(iii) Whether the gift contains any restrictions, limitations or conditions. The Department shall also state and list the namesof persons or the category of persons using the gift, e.g., the Department or the specific Neighborhood Council.(iv) The donor’s name or identifying information, address, a description of the gift, and the fair-market value or an estimateof the fair-market value for the gift.(4) A list of any donated leasehold interest in office, storage, or meeting space that is occupied by a Neighborhood Council,including the location of the space, the Neighborhood Council occupying the space, the donor’s name, the value of the lease-hold interest, the leasehold term, and any limits, restrictions, or conditions upon which the donation is based.(i) Prohibited Gifts. No gift shall be accepted by the Department that:(1) Involves or relates to providing childcare services.(2) Is a gift from a foreign or domestic government entity, excluding grants or grant funding related to the Citywide Systemof Neighborhood Councils.(3) Involves a fee interest in real property, or any partial or full ownership interest in real property, except that a leasehold orpossessory interest for office, storage or meeting space as described in Subsection (b), above, is allowed.(4) Requires ongoing maintenance or costs that will be expended by the City for upkeep in an amount exceeding $1,000annually, such as a gift of a monument, artwork, or mural that requires ongoing and continuous expenses by the City tomaintain the gift.(5) Includes livestock or animals, whether rare or domestic, wild or tame.(6) Is a gift involving a motorized vehicle, automobile, aircraft or boat, or any vehicle that requires registration with the Cali-fornia Department of Motor Vehicles.The Board of Neighborhood Commissioners may develop further policies with respect to the specific types of gifts that mayor may not be accepted.(j) The acceptance of any gift under this section does not warrant, guarantee, or purport to establish any benefits that may bederived under State or Federal law. However, the Department is authorized to facilitate the attempt by any donor of a gift toreceive from the Department a written acknowledgment of the gift for tax purposes, including that the General Manager of
  • 4. Neighborhood Council Plan Review and Reform Initiative— 4 —the Department, or the General Manager’s designee, may provide a contemporaneous written acknowledgment, a disclosureregarding a quid pro quo contribution, or any mandatory disclosure regarding the gift for tax related purposes.(k) The provisions of this section shall expire, and be deemed to have been repealed, three years after its effective date, unlessearlier amended and extended by the Council by ordinance.SECTION HISTORYAdded by Ord. No. 179,545, Eff. 3-16-08.Sec. 22.814. Acceptance of Donations and Gifts.A Neighborhood Council that has been certified under the Plan for a Citywide System of Neighborhood Councils (Plan) andthe Regulations Implementing the Plan (Regulations) under the limited circumstances set forth below, shall have the powerand authority to accept gifts on behalf of the City of Los Angeles that relate to that Neighborhood Council’s purposes, mis-sions, or goals, to its programs or activities, or to the Citywide System of Neighborhood Councils if the acceptance of the giftis consistent with the purposes and goals expressed in the City Charter, the Plan, and the Regulations.Gifts may include any item, monetary or non-monetary, tangible or intangible, that is contributed, provided, given, trans-ferred, donated, bequeathed or devised to the City through the Neighborhood Councils. The authority to accept any gift in-cludes the authority to reject or rescind the acceptance of any gift at any time. Nothing in this section requires the acceptanceor retention of any gift. Nothing in this article precludes the Neighborhood Council from requesting that the City Councilor the Department make a determination regarding the acceptance of any gift.(a) Limitations on Acceptance of Gifts. A Neighborhood Council shall only accept gifts that relate to its purpose, mission,policies, and programs, to the Citywide system of Neighborhood Councils, consistent with the City Charter, the Plan and theRegulations. No gift shall be accepted by any Neighborhood Council that exceeds $10,000 in value. Gifts valued in excess of$10,000 shall be submitted to City Council for acceptance or rejection.No gift of real property shall be accepted by the Neighborhood Council, including any gift for a fee simple estate or a lease-hold interest in property. Gifts for a leasehold interest in real property for a term of one year or less, comprising office, stor-age, or meeting space, may be accepted by the Department acting on behalf of the Neighborhood Council under Section22.801.1 of this Code. The Neighborhood Council may also request that City Council accept any gift on its behalf involvingreal property.(b) Assessment of Value. For the purposes of determining the value of any gift that is accepted by a Neighborhood Council,including whether the gift is valued in excess of the monetary threshold value that requires the gift to be submitted to CityCouncil, then the value of the gift shall be calculated as follows:(1) If the gift is monetary in nature, then the value is measured in United States dollars.(2) The value of all non-monetary gifts is determined based on an assessment of the gift’s fair market value by the governingbody of the Neighborhood Council at the public meeting where the decision is made to accept the gift.(c) Donor Disclosure Form. No gift valued at more than $500 shall be accepted unless the person or entity that is the sourceof the gift completes the Department’s approved donor disclosure form.The requirement for completing a donor disclosure form shall not be avoided by donating successive or incremental giftsduring a single calendar year, where the successive or incremental gifts would be independently valued at less than $500,but the accumulated value of the gifts over the course of that calendar year exceeds the value of $500. If any person givesor donates an accumulation of gifts within the same calendar year that total in value more than $500, then the donor mustcomplete the donor disclosure form for each gift that exceeds this allowable accumulated total.The donor disclosure form shall be dated and completed with information from the donor that includes and memorializesthe following information required by State law:(1) That the Neighborhood Council shall receive and control the gift;(2) That the gift shall be used solely for official business related to the Citywide system of Neighborhood Councils;(3) Whether the gift contains any restrictions, limitations or conditions, so long as the donor does not designate the giftfor any specific person(s). The donor shall state and list the names of persons or the category of persons using the gift, e.g.,the board of the Neighborhood Council, the executive committee of the Neighborhood Council, or the stakeholders of theNeighborhood Council. However, the Neighborhood Council, in its sole discretion, shall determine the specific person(s)who may use the gift; and(4) States the donor’s name or identifying information, a description of the gift, and the fair-market value or an estimate ofthe fair-market value for the gift.In addition, the donor disclosure form shall contain an area for the entry of information by the Department or the Neighbor-
  • 5. Neighborhood Council Plan Review and Reform Initiative— 5 —hood Council that describes the official use for the gift.The donor disclosure form shall also require the donor to disclose any contract, license, permit or project that the donor iscurrently seeking, intends to seek, or sought in the past six months from the City.The donor disclosure form shall be filed with the Department within 30 days of the receipt of the gift.(d) Method of Acceptance. Prior to conducting any public hearing to accept or reject any gift, the Neighborhood Councilmust have a completed donor disclosure form if that form is required under Subsection (c) above.The acceptance of the gift by the Neighborhood Council shall occur at a meeting that is noticed in compliance with theRalph M. Brown Act. The Neighborhood Council shall list on its agenda for the public meeting an item that describes thegift, the gift source or donor, that the Neighborhood Council will make a determination regarding the gift’s value, and thatthe Neighborhood Council may take possible action regarding the acceptance or rejection of that gift or refer the gift to CityCouncil or the Department for action.When a gift is valued at less than $500 and the donor disclosure form is not required to be completed, the NeighborhoodCouncil may delegate to a member of its board the ability to accept these gifts and to determine their value. This delegationof power to a board member shall occur at a public meeting and the board member accepting the delegation shall file, on amonthly basis, a list containing the information specified in Subsection (i)(2), below.(e) Accounts / Post-Acceptance of Monetary Gifts. Neighborhood Councils shall deposit monetary gifts into an appropriateaccount in the “Neighborhood Empowerment Trust Fund” (Trust Fund) of the City’s Treasury in accordance with Section5.485 of this Code or into a checking account established pursuant to Section 22.815 of this Code. The Neighborhood Coun-cil shall deposit 10% of the value of all unconditional monetary gifts that it receives into a special account for disbursementto Neighborhood Councils in economically disadvantaged areas consistent with Section 5.485(d) of this Code.(f) Post-Acceptance / Non-Monetary Gifts. Neighborhood Councils are exempt from registration of all non-monetary gifts,such as physical property items, office equipment, inventory or supplies, with the Citywide Inventory System, including themaintenance of any necessary perpetual stock records of furniture or equipment, as required under Sections 7.79 and 7.84of this Code. However, Neighborhood Councils shall report all monetary gifts to the Department for entry into the City’sFinancial Management Information System and shall report all non-monetary gifts valued above $5,000 to the Department.For non-monetary gifts valued above $5,000, the Department shall provide the Neighborhood Council with an inventorycontrol number and an inventory tag for the gifts and the Neighborhood Council shall affix the inventory tag to the gift.(g) Restricted Gifts. Neighborhood Councils shall ensure compliance with any special terms, conditions or restrictions at-tached to the use of any gift. If any monetary gift contains restricted terms, the monies shall be segregated from other ac-counts and earmarked with the required restrictions.(h) Expenditure of Monies. Neighborhood Councils shall have the power and authority to expend funds for costs related tothe functions, operations and duties of being a certified Neighborhood Council, including, but not limited to, leasing spacefor office use, meetings or storage, the purchase of office equipment, computers, supplies, or expenditures for communica-tions, such as the costs associated with newsletters, postage or printing written materials. Neighborhood Councils may alsoexpend the funds on neighborhood improvement projectsas long as the appropriation of monies for neighborhood improvement projects have been approved under the adminis-trative processes established by the Department of Neighborhood Empowerment. All Neighborhood Council requests forexpenditures from the Trust Fund shall be processed with the Controller through the General Manager of the Department,or the General Manager’s designee. Expenditures by the Neighborhood Councils from the checking account shall be madeby a negotiable written instrument and shall bear the signatures of the Neighborhood Council’s Treasurer and the Presidentor Vice-President.(i) Record-Keeping. In addition to forwarding all donor disclosure forms to the Department within 30 days of the date of thereceipt of the gift, the Neighborhood Council shall keep a written record of all accepted gifts. The record shall be submittedto the Department on March 1st and September 1st of each year. The record shall cover the immediately preceding six-monthperiod of time and contain the following information:(1) An accounting of all accepted monetary gifts, which shall state the amount of the gift, the date accepted, and the sourceor donor of the gift. In addition, the report shall list all deposits and expenditures from the Trust Fund and the checkingaccount, including the payee, the amount paid, the date, and the purpose of the expenditure or a description of the itempurchased; and(2) A statement that the Neighborhood Council shall receive and control the gift. A statement that the gift shall be used solelyfor official business related to the Citywide system of Neighborhood Councils. Whether the gift contains any restrictions,limitations or conditions. The names of persons or the category of persons using the gift, e.g., the board of the Neighborhood
  • 6. Neighborhood Council Plan Review and Reform Initiative— 6 —Council, the executive committee of the Neighborhood Council, or the stakeholders of the Neighborhood Council. The do-nor’s name or identifying information, a description of the gift, and the fair-market value or an estimate of the fair-marketvalue of the gift. For those gifts that have a value or accumulated value over $500 during any calendar year, a copy of thedonor disclosure form.(j) Prohibited Gifts. No gift shall be accepted by a Neighborhood Council that:(1) Involves or relates to providing childcare services.(2) Is a gift from a foreign or domestic government entity, excluding grants or grant funding related to the Citywide systemof Neighborhood Councils.(3) Involves any ownership or possessory interest in real property, including a fee simple or leasehold interest.(4) Requires ongoing maintenance or costs that will be expended by the City for upkeep in an amount exceeding $1,000annually, such as a gift of a monument, artwork, or mural that requires ongoing and continuous expenses by the City tomaintain the gift.(5) Includes livestock or animals, whether rare or domestic, wild or tame.(6) Is a gift involving a motorized vehicle, automobile, aircraft or boat, or any vehicle that requires registration with the Cali-fornia Department of Motor Vehicles.The Board of Neighborhood Commissioners may develop further policies with respect to the specific types of gifts that mayor may not be accepted.(k) The acceptance of any gift pursuant to the provisions of this article does not warrant, guarantee, or purport to establishany benefits that may be derived under State or Federal law. However, the Neighborhood Councils are authorized to facilitatethe attempt by any donor of a gift to receive an acknowledgment of the gift for taxpurposes, including that the Treasurer of the Neighborhood Council may provide a contemporaneous written acknowledg-ment, a disclosure regarding a quid pro quo contribution, or any mandatory disclosure regarding the gift for tax relatedpurposes.(l) The provisions of this section shall expire, and be deemed to have been repealed, three years after its effective date, unlessearlier amended and extended by the Council by ordinance.SECTION HISTORYArticle and Section Added by Ord. No. 179,545, Eff. 3-16-08.Sec. 22.815. Checking Accounts.The City Treasurer is hereby authorized to establish checking accounts for the Neighborhood Councils under the City’s ex-isting banking contract. Neighborhood Councils shall deposit their donated funds into the Trust Fund as stated in Section5.485 of this Code or as authorized by the City Treasurer under this section. Non-donated funds, including funds from theCity’s general fund, shall be deposited into the Trust Fund in accordance with Section 5.485 of this Code.The checking account established by the City Treasurer for the benefit of a Neighborhood Council shall list the Departmentof Neighborhood Empowerment as a joint signatory on the checking account and shall grant access for review of the accountto the Department, Treasurer and Controller. In no event shall the monies in the checking account of a Neighborhood Coun-cil exceed the value of $50,000. Any deposit that would cause the Neighborhood Council’s checking account to exceed thesum of $50,000 must be deposited into the Trust Fund in accordance with Section 5.485 of this Code. Monies in the checkingaccount shall not revert to the Reserve Fund of the City at the end of the fiscal year.All expenditures by the Neighborhood Councils from the checking account shall be made by a negotiable written instrumentand shall bear the signatures of the Neighborhood Council’s Treasurer and the President or Vice-President. NeighborhoodCouncils shall not withdraw cash from the checking account. All expenditures from the checking account shall be for thepurposes stated in Section 22.814(h) of this Code.In the event that any Neighborhood Council is decertified, abandoned, or otherwise ceases to exist, any and all accounts orfunds that relate to that Neighborhood Council shall be turned over or distributed to the Department, which shall have theauthority to expend the funds as stated in Section 5.485(b) of this Code.The provisions of this section shall expire, and be deemed to have been repealed, three years after its effective date, unlessearlier amended and extended by the Council by ordinance.SECTION HISTORYArticle and Section Added by Ord. No. 179,545, Eff. 3-16-08.
  • 7. /1 - /!){}.-{)1(,(,( 7i /1-&6~tJ 0158 MOTION 8UC)(~ET& -INlltf.:;E S2-JM¥- The Neighborhood Council system has grown and matured over the last ten years. The needs of the ,~Jsystem have shifted, and the role and mission of the Department of Neighborhood Empowerment(DONE) must be evaluated to best serve the Neighborhood Councils and promote their mission ofpublic engagement and community empowerment.DONE was originally created to establish Neighborhood Councils and foster their development. Tenyears and 93 councils later, DONE must now focus on maintaining a robust, effective, accountable andtransparent NC funding program.The Neighborhood Council Funding Program gives Neighborhood Councils resources to address theimmediate concerns of their community and enhance their neighborhood. Management ofthe fundingprogram has been challenging for DONE, but out of necessity, DONE has reorganized and implementedseveral reforms to the funding program. Working closely with the Councils Committee on Educationand Neighborhoods, the Office of the Controller and the Neighborhood Councils and theirstakeholders, DONE has streamlined the demand warrant process, standardized forms and reporting,and increased accountability. DONE is also exploring the feasibility of an online system that wouldaccept demand warrants, provide rea] time account information, and assist treasurers with reportingand financial management.As the needs of the Neighborhood Councils change, the structure of the funding program may alsoneed to change. The model established over ten years ago may no longer be the most appropriate. Formore than a year, the Committee on Education and Neighborhoods has drawn extensive input from thepublic, including Neighborhood Councils and their stakeholders, to determine the best ideas for policychanges to make the Neighborhood Council system more effective, efficient, transparent andaccountable, Among other things, the Committee conducted two public forums, a detailed onlinesurvey, and multiple informational committee hearings ..The recommendations in this motion are theproduct of that outreach effort.I THEREFORE MOVE that the Council, subject to the approval of the Mayor:_ 1. INSTRUCT the Department of Neighborhood Empowerment, with assistance fromtheController to report back in 90 days on the status of the Neighborhood Funding Program and.DONEs efforts to (a) clarify the encumbrance process; and (b) standardize financial templates,forms, and reporting; and (c) streamline approvals and management of the program; and (d)increase accountability.2. ADOPT a policy that requires all Neighborhood Councils to utilize the budget andreconciliation templates provided by the Department of Neighborhood Empowerment andadhere to all budget and reconciliation deadlines.3. ADOPT a policy that requires all Neighborhood Councils to conform to the accounting systemprescribed by the Department of Neighborhood Empowerment.4. ADOPT a policy that empowers the General Manager and Board of NeighborhoodCommissioners to freeze funds if a Neighborhood Council does not comply with Council policyand Department of Neighborhood Empowerment mandates, or ifany of the followingcircumstances exist: (a) the Neighborhood Council has failed to submit a budget in a timelymanner; (b) an audit of the Neighborhood Council is past due; (c) the Neighborhood Councilhas made prohibited or inappropriate purchases; (d) the Neighborhood Council is not inAgenda Item 10d7
  • 8. compliance with training requirements; (e) the Neighborhood Council Board does not have aTreasurer; or (t) the Neighborhood Council Board is deemed dysfunctional,5. CONTINUE a policy to prohibit the rollover of unemcumbered funds and DIRECT theDepartment of Neighborhood Empowerment, with assistance from the City AdministrativeOfficer, Chief Legislative Analyst, and City Attorney, to report back on alternative fundingmodels, including a grant based funding system.6. DIRECT the Department of Neighborhood Empowerment, with assistance from the CityAdministrative Officer, Chief Legislative Analyst, City Attorney, Controller, and Board ofNeighborhood Commissioners, to report back in 90 days with a mechanism for Neighborhood:Councils to request rollover funds on a.projects by project basis and as deemed appropriate bythe Board of Neighborhood Commissioners or a committee comprised of representatives fromthe CLA,CAO, and DONE that (a) defines the types of projects that will qualify for rolloverfunds; and (b) details the application and approval process; and (c) establishes deadlines tocomplete an approved project.7. DIRECT the Department of Neighborhood Empowerment, with assistance from the CityAdministrative Officer, Chief Legislative Analyst, City Attorney, and Controller, to report backin 90 days on equipment purchases made by Neighborhood Councils in fiscal year 2010-11 forcity and proprietary departments and guidelines to maximize the benefit to the departmentand the Neighborhood Council.8. DIRECT the Department of Neighborhood Empowerment, with assistance from the CityAdministrative Officer, Chief Legislative Analyst, and the Information Technology Agency, toreport back in 180 days on the feasibility of developing an electronic system for theNeighborhood Council Funding program that will (a) integrate purchase card and FMIS datafor real time tracking of expenditures and fund balances; (b) accept electronic submission andapproval of budgets, demand warrants and reconciliations; and (c) provide an interface totrack and create financial statements and treasurer reports for the board.9. DIRECT the Department of Neighborhood Empowerment, upon adoption of these policies, toimmediately notify all Neighborhood Councils of the changes to the policies and proceduresthat govern the Neighborhood Council Funding Program, and to report back in 90 days ontheir outreach efforts. .Presented by:n /1/;.7 J. (/~ IJ ;/ ./J,i c •. u{·(v( A-/l·bZrr--L-{y,-,PAUL KREKORIANCouncilmember, 2nd DistrictSeconded by:8
  • 9. BOARD OF NEIGHBORHOODCOMMISSIONERSCIIT OF LOS ANGELESCALIFORNIADEPARTMENT OFNEIGHBORHOOD EMPOWERMENTDANIEL GATICAPRESIDENT334·6 EAST SECOND STREETLOS ANGELES, CA 90012CARLENE DAVISVICE PRESIDENTTELEPHONE: (213) 485-1360TOLL-FREE: 3·"FAX: (213) 4854608E·MAIL: done@lacity.orgLINDA LUCKSKAREN MACKPAUL PARKLEONARD SHAFFERBONGHWAN (BH) KIM, MPAGENERAL MANAGERwww.EmpoworLA,orgJANET LINDOEJ(cctlllvo Admlnlstfotivo A5~lslamTELEPHONE: (213) 485--1360ANTONIO R. VILLARAIGOSAMAYORNovember 22, 2011Council File No. 11-1020Honorable Members of theLos Angeles City CouncilRoom 395, City Hall200 North Spring StreetLos Angeles, California 90012REPORT RE: NEIGHBORHOOD COUNCIL SYSTEM FUNDING PROGRAMHonorable Members:As requested by your Honorable Body, the Department of Neighborhood Empowerment(Department) submits this report as requested by the City Council, to address four (4)main items in the approved motion.• Clarify the encumbrance policy• Alternative funding models• Develop a mechanism by which Neighborhood Councils may request to rollover funds from year to year, on a project-by-project basis• Neighborhood Council purchases of equipment for City and ProprietaryDepartments in fiscal year 2010-2011At this time, the Department recommends continued discussion to address these items,to better ascertain the feasibility of implementation and to provide a greater opportunityfor input from Neighborhood Councils on proposed policies or processes.BackgroundOn August 16, 2011, the City Council approved a series of motions related to the workof the Department of Neighborhood Empowerment and its oversight of theNeighborhood Council system. This report responds to the motion related to theNeighborhood Council Funding Program (attached), which established a number of newrequirements, gave authority to the Department to suspend Neighborhood Councilfunds under specific circumstances, and listed four (4) items for the Department toaddress and report back to the City Council within ninety (90) days.AN EQUAL EMPLOYMENT OPPORTUNITY AFFIRMATIVE ACTION EMPLOYER 9
  • 10. Honorable Members of theLos Angeles City CouncilNovember 22, 2011Page 2 of 5Collaboration Process for FeedbackThe Department collaborated with the Neighborhood Council regional alliances acrossthe City to solicit feedback from Board members and stakeholders on this motion.Starting in September and continuing through the beginning of October, the Departmentcosponsored mini town halls with the Los Angeles Neighborhood Councils Coalition, theHarbor Alliance of Neighborhood Councils, the Valley Alliance of NeighborhoodCouncils, the Northeast Los Angeles Coalition, the Westside Regional Alliance ofCouncils and the South Los Angeles Alliance of Neighborhood Councils.Approximately, one hundred and fifty (150) Board members and stakeholders providedtheir feedback at the town halls. In addition, the Department created an online surveyfor feedback on the motion where seventeen (17) Board members and stakeholdersprovided detailed input. We invited Board members and stakeholders via our bi-monthly eblast to participate in the town halls, survey, blog and work group meetings.In October, the Department held three (3) work group meetings on the FundingProgram, inviting Neighborhood Council Board members, particularly those who serveas Treasurers. The invitation was also extended to the Office of the Controller, Office ofthe City Attorney, the City Administrative Officer (CAO), the City Legislative Analyst(CLA), the Board of Neighborhood Commission, and the Information TechnologyAgency (ITA). Between nine (9) to seventeen (17) Board members participated in eachof these work group meetings. A representative of the Office of the Controller attendedtwo (2) of the meetings. All of the minutes for the town halls and work groups meetingswere uploaded to a blog for further comments though we did not receive any.Item 1The Department was directed to: (1) clarify the encumbrance process; (2) standardizefinancial templates, forms, and reporting; (3) streamline approvals and management ofthe program; and (4) increase accountability.StatusOn February 18, 2010, the City Council voted to limit the access of NeighborhoodCouncils to rollover funds (C.F. 09-0600-S159), then eliminated the rollover policy forfiscal year 2010-11 funds. Consequently, the Department encumbered funds for eachNeighborhood Council based on requests for demand warrants received by April 15,2011 and executed contracts. The deadlines were the focus of several departmentcommunications; however, there were a number of Neighborhood Councils that wereunable to plan accordingly.The Departments encumbrance policy is defined as monies set aside to pay forrequests submitted by a Neighborhood Council by the April 15th deadline and/oroperational costs, such as services provided by the Departments contracted vendors,utility bills and month-to-month office and meeting space expenses. The Departmentwill be developing clearer guidelines and advance notice of deadlines to encumberfunds as long as required conditions are met.10
  • 11. Honorable Members of theLos Angeles City CouncilNovember 22, 2011Page 3 of 5Discussions with Neighborhood Council members present revealed the belief by somethat funds were encumbered, for purposes of the Department, when the board acts tocommit funds at a Neighborhood Council meeting. Work group participants alsoexpressed that the deadlines were not provided with sufficient lead time forNeighborhood Councils to prepare, and that the April 15th deadline leavesNeighborhood Councils without the ability to pay vendors through a request for ademand warrant two (2) months before the end of the fiscal year.The Department considers these concerns valid and has committed to providing greaternotice and reviewing the deadlines for submission of funding requests. The Departmentproposes to provide notice on the deadlines in January and accepting NeighborhoodCouncils requests for demand warrants until June 1st. The June 1st deadline iscontingent on the Departments ability to implement an electronic platform for receipt ofrequests.The Department has standardized the budget and all forms and reports associated withthe funding program, but will continue to be challenged in managing the fundingprogram as long as it remains a manual paper-based system. The Citys newlyadopted, state of the art Financial Management System is designed to meet the needsof large departments to manage and track highly complex budgets, but it cannotcurrently accommodate our unique Demand Warrant and Purchase Card based systemfor ninety-five (95) cost centers. Both ITA and the Controller have indicated that, due toother citywide priorities, they would not be able to build a customized module in the nearfuture. With their guidance, however, we will be securing a professional consultant whocan develop a comprehensive plan to design and build an automated paperless system.The Department will prepare a report with a system proposal and budget to the Mayorand City Council which will be based on a thorough assessment of our functional needs.Item 2The City Council continued its policy to prohibit the rollover of unencumbered funds anddirected the Department to report back on alternative funding models, including a grantbased funding system.StatusDiscussions regarding this item focused exclusively on a grant-based funding system.The Department presented a scenario in which funds could be allocated on a citywideor regional basis with Neighborhood Councils applying for funds for specific projects orprograms. A certain amount would be provided up front for operational expenses,perhaps twenty (20) percent, while the rest of the funding would be grant based. Apanel comprised of City staff and Neighborhood Council representatives can revieweach proposal and make the funding determination based on agreed upon standards.This process would require strategic planning on the part of Neighborhood Councils tosolicit the participation of all sectors of the community in determining short and long-term priorities. Bringing everyone to the table can result in the identification of otherfunding sources to leverage the Citys funds.11
  • 12. Honorable Members of theLos Angeles City CouncilNovember 22, 2011Page 4 of 5In the town halls, online survey and work group meetings, the general consensus wasthat Board members were adamantly opposed to changing the current funding system.The main concern voiced was the feeling that the decision-rnaking process would beremoved from the Neighborhood Council to the City if a grant based funding processwas implemented. There were also concerns raised about the ability of certainNeighborhood Councils to produce better written proposals and possibly leaving outthose who may not have the skills or the time. Many stated that a grant system was toocomplex and time consuming for Neighborhood Council volunteers to use and theDepartment to oversee with its limited staffing.A suggestion was offered that rather than sweeping unencumbered funds at the end ofthe fiscal year, remaining funds should be placed in a fund intended to be parceled outas grants to Neighborhood Councils based on need. For example, some NeighborhoodCouncils have the need to provide translation at meetings, placing a higher proportion oftheir funds in operational expenses and less on neighborhood improvement projectsand outreach.Item 3The Department was directed to report back with a mechanism to allow for the rolloverof Neighborhood Council funds from one (1) year to the next for approved projects.Projects would be deemed appropriate by the Board of Neighborhood Commissionersor a committee comprised of the CLA, CAD and the Department, which will: (1) definethe type of project that would qualify; (2) provide the details as to the application andapproval process; and (3) establish deadlines to complete an approved project.StatusThe Department proposes to establish a Neighborhood Improvement Project budget,similar to the Capital Improvement Project budget that allows allocated funds to roll overfrom year to year. This provides an option for Neighborhood Councils that wish toimplement neighborhood improvement projects that may take a significant amount oftime and money to implement. Work group participants did not agree on whetherprojects should be tangible or intangible, or whether they should be limited to capitalprojects. They did feel, however, that the project should cost in excess of $5,000.Some felt that the project should be completed within one (1) fiscal year given theturnover of Board members, while others argued that such a short time limit negates arollover project. Stipulating that the funds can only be used for the intended project orbe swept by the City would encourage the completion of the project by incoming Boardmembers. The feeling was also expressed that capital projects should be undertakenby the City and that Neighborhood Councils should advocate for priority communityprojects instead of using their funds.Item 4The Department was directed to report back on equipment purchases made byNeighborhood Councils in fiscal year 2010-11 for city and proprietary departments, and12
  • 13. Honorable Members of theLos Angeles City CouncilNovember 22, 2011Page 5 of 5on any guidelines that can be implemented to maximize the benefit of said purchases tothe corresponding department and the Neighborhood Council.StatusThe discussion on the purchase of equipment for City Departments in FY 2010-11clarified the process that Neighborhood Councils are to request a transfer to the CityDepartment and not buy and donate the equipment because it presents a transparencyand accountability problem. There is also a concern that Neighborhood Councils arebeing used as an end around the established budgets for the departments.Suggestions were made about how to ensure the equipment is of benefit to thecommunity, such as having the requesting department provide a written statementindicating the equipment is a high priority for the entire department or having eachdepartment provide a list of priority items to the Neighborhood Councils. It was alsoexpressed that City departments should be a greater priority over schools, and somehad the view that Neighborhood Councils should not give money to other City agenciessince their needs were discussed and determined in the budget process.ConclusionThe Department received valuable input from Neighborhood Council representativesand believes a final recommendation on each of the directives can be provided afterallowing for more input on any preliminary recommendations.If you have any questions regarding this matter, please contact me at (213) 485-1360. Iwill be available when you consider this matter in order to answer any questions youmay have.Sincerely,B GHWAN (BH) KIMGeneral ManagerAttachment13
  • 14. SOUTH LOS ANGELES ALLIANCE OF NEIGHBORHOOD COUNCILSDRAFT NEIGHBORHOOD COUNCIL RESOLUTIONWhereas the City of Los Angeles has reduced the budget and staffing for the Department of NeighborhoodEmpowerment (DONE) as a result of the budget deficit, thus requiring a re-examination of the role and capacity ofthe department to support the more than 90 Neighborhood Councils (NCs);Whereas there is ongoing concern for the effectiveness and efficiency of the funding system as well as lack of clearand consistent city training, policies and procedures for the operation of the neighborhood councils;Whereas on (~~!~lthe Los Angeles City Council adopted the motion as presented by City Councilmember PaulKerkorian of the 2,d District directing the Department of Neighborhood Empowerment, the City Attorney andvarious other departments to report back to the council within 90 days on:1. A plan for the implementation of a training program for Neighborhood Council (NC) board members thatcovers (a) Ethics and Legal Issues; (b) Workplace Violence and Sexual Harassment; (c) Funding Program;(d) City Government Basics; (e) Parliamentary Process and (f) Community Leadership;2. A mechanism for NCs to roll-over unspent funds at the end of a fiscal period that (a) defines the types ofprojects that will qualify for rollover funds; and (b) details the application and approval process; and (c)establishes deadlines to complete an approved project.3. The feasibility of developing an electronic system for the NC Funding program that will (a) integratepurchase card and FMIS data for real time tracking of expenditures and fund balances; (b) acceptelectronic submission and approval of budgets, demand warrants and reconciliations; and (c) provide aninterface to track and create financial statements and treasurer reports for the board.4. A structure of governance and administration that provides greater autonomy and reduces DONEsworkload for the NC including the transfer of responsibility for functions including, but not limited to,funding, elections, communication with the city, outreach, dispute resolution and training to permanentor as-needed regional authorities or bodies that operate with the oversight of DONE.5. A plan for the implementation of a system of regional complaint panels composed of board members ofvarious NCs from similar regions to address stakeholder and board member grievances;Whereas the Department of Neighborhood Council has presented a series of draft policy recommendations inresponse to each of the motions adopted by the city council for consideration by the NCs;Therefor be it resolved by a vote of (indicate vote count) the (insert name of NC) considered and submits thefollowing response and recommendations to the DONE, the BONe, any workgroups tasked with developing policyrecommendations and the City Council:Training Requirements:1. Neighborhood Councils favor ongoing and standardized training and board development to ensurecapacity acrossthe NC system. However, NC boards represent a volunteer system and as such,mandatory training should be limited to the state required Ethics training.2. DONE should develop the capacity and utilize technology to supplement and/or provide ready access toall training areas, including, but not limited to (a) an overview of the NC Funding Program; and (b) CityGovernment Basics.3. DONE should develop, maintain and make readily available a written policies and procedure manual foruse by NC Board members and stakeholder on (a) the NC Funding Program and Budget Process; (b)protocol for working with City agencies and departments in order to access city services; (c) Complaintand Grievance procedures; (d) Brown Act; (e) How to conduct an effective meeting; and (f) Code ofConduct and Sexual Harassment.14
  • 15. SLAANCRecommendations for NC ReformPage24. Roberts Rulesof Order can be cumbersome, inefficient and create unnecessary barriers. The city shouldtake the appropriate steps to allow Neighborhood Councils to authorize Neighborhood Councilsto adoptand utilize RosenbergRulesof Order.5. DONEhas a well-documented history of sponsoring Regional and citywide congress which provide anefficient and effective system for training, sharing of best practices and networking. DONEshould receivesufficient funding to provide at least one regional congress per region and one citywide congress per fiscalyear to support the board development and training.Reform of Funding Program:1. The draft policy solutions proposed the adoption of a (a) grant-based funding system that pools andredistribute unspent funds at the end of each year to create a mini-grant program to which each NCcouldapply and compete to addresssystem building priorities (e.g. outreach and translation); or (b) an annualfunding allocation for each NCbased on a set amount for administrative and operations costs only withthe remaining funds held by DONEto be used for specific outreach, improvement projects andneighborhood grants through a grants based system; or (3) funding system in which each regiondesignates an amount to be used for project specific grants which would be distributed, with theassistance of Department staff, according to criteria determined by NCsat the regional level.A grant-based funding system will create inequities in funding given the possible variance in capacity toprepare particularly newly developed councils to compete against well-resourced councils. The fundingwas designed to ensure equity in the distribution of resources among the NCto fulfill their roles andresponsibilities. We therefore oppose each of the options listed above and the use of a grant-basefunding system.2. The second draft policy solution would allow for the rollover of funds for physical capital improvementprojects which often take longer than 1 fiscal year to complete. This is consistent with but slightlymodifies the citys previous policy for the retention of savings by NCsand should not require changestothe Planfor a Citywide System of Neighborhood Councils and corresponding ordinance. We thereforesupport the rollover of funds for multiple fiscal vear physical capacity improvement projects asanalternative to the recent "sweeping" of all unspent funds in 2010 and 2011 under the condition that NCwill be allowed to substitute one project for another should, for any reason, it not prove feasible tocomplete the project within the subsequent fiscal year.3. The current system for processing demand warrants, Neighborhood Purpose Grants (NPG),audit reportsand other financial reporting requirements is cumbersome, inefficient, duplicative and subject to errorsand lossof previously submitted documentation by a NC,particularly given the continuous turnover andreduction of city personnel. We therefore recommend the city streamline the financial reporting processand reduce the amount of paperwork through the adoption of an on-line system and database thatcentralizes, documents, uploads and retains the required information and supporting documentation forall demand warrants, NPGrequest and audit reports. Once submitted, this information should be visibleto the designated NCboard members and city staff and provide information to assist in tracking thepayment and reconciling any discrepancies.4. We also recommend the city: (a) assign one or more dedicated staff person to process all demandwarrants: Cblupdate or adopt an accounting system based on modern accounting practices: and Ce)update and maintain via the DONEwebsite written procedures and criteria for the review and approvalof all funding request with clear timeframes for process request.5. Changeand deviations by the city within and after the third quarter of the fiscal year to the policy anddeadline for the submission of funding request has resulted in the loss of funding for needed communityprojects. We therefore recommend the city return to the adoption of a fixed annual deadline for15
  • 16. SLAANCRecommendations for NCReformPage3funding reguest. The NCsshould be notified of the deadline along with the funding allocation at thestart of each fiscal year. Any change to the deadline should require no lessthan 90 days written noticeto all NCboard members.Establishment of a System of Regional Governance1. The imposition of a formal and mandatory regional governance structure creates an additional andunnecessary level of bureaucracy. Many of the NCshave come together to form regional alliancesincluding the NCslocated within South LA. This is however a voluntary network, providing both flexibilityand preserving the autonomy of each NC. We believe the regional and citywide congresses also provide avehicle for coordination and reduce the burden on the DONElimited staff of providing directadministrative support and technical assistanceto each individual NC. What is needed to support andfacilitate greater collaboration and increase the coordination and efficiency between the various citydepartments and local NCsis greater flexibility in the ability of NCto pool funding across NCboundaries.Current city policy greatly impedes the use of NCfunding for activities and services outside of the specificgeographic boundaries of each NC.We therefore oppose the imposition of a mandatory regional governance structure and in turnrecommend the city funding policies be revised to encourage collaboration. provide greater flexibilityand permit the pooling of funding and sharing of cost across NCboundaries.Grievance and Complaint Procedures1. The draft policy solutions recommends the grievances and complaint procedure be combined into onecitywide regional peer grievance system. The process would be asfollows: (a) grievances are filed withDONEthat will be responsible for evaluating the validity based on legal criteria provided by the CityAttorney within 5 days; (b) the NCwill have the option of resolving the grievance first before it goes to thepeer grievance panel; (c) if the Neighborhood Council declines to review the grievance or if the grievanceis not resolved or is not resolved to the satisfaction of the person grieving within 30 days, the Departmentwill forward the grievance to the regional peer grievance panel for review and development of a plan ofcorrective action.Basedon a determination by the City Attorney, grievances can only be about a NCviolation of theirbylaws or standing/operating rules and cannot be filed by Board members. We agree the distinctionbetween grievances/complaints are unnecessary, that the current system is subject to potential conflict ofinterest by the seated board and any grievance should be handled swiftly, transparently and fairly.However the proposed solution is cumbersome, time consuming and inefficient. We thereforerecommend:• The city consolldatets] the grievance and complaint system into one system.• The City Attorney Issuels] and all NCare required to adopt a standardized and consolidatedgrievance/complaint procedure that allows for the filing by both board members andstakeholders.• All grievances should be submitted in writing to the NCboard and DONEsimultaneously.• EachNCmust make available the policy and procedure on their website, a copy at all meetingsand make available upon request.• The NCshould have the opportunity to address each and every complaint as a first step withina specified time period.• The action taken by the NCmust be reported to DONEand in turn with the City Attorney toensure the response by the board was appropriate.• Should the City Attorney or personts] filing the grievance determine the NCaction was notsatisfactory; the matter should then be referred to a committee of the BONCfor resolution.16
  • 17. File No. 11-1020TO THE COUNCIL OF THECITY OF LOS ANGELESYour ARTS, PARKS, AND NEIGHBORHOODS Committeereports as follows:ARTS, PARKS, AND NEIGHBORHOODS COMMITTEE REPORT relative to the NeighborhoodCouncil System Funding Program.Recommendation for Council action:NOTE and FILE the November 22, 2011 Department of Neighborhood Empowerment (DONE)report relative to the Neighborhood Council System Funding Program.Fiscal Impact Statement: Not applicable.Community Impact Statement: None submitted.SUMMARYOn November 30, 2011 your Committee considered a November 22, 2011 DONE report relativeto the Neighborhood Council System Funding Program. According to DONE, on August 16,2011, Council instructed DONE to report back to Council in regard to the following:a. Clarification of the encumbrance policyb. Alternative funding models for Neighborhood Councilsc. Developing a mechanism by which Neighborhood Councils may request to rollover funds from year to year, on a project-by-project basis.d. Neighborhood Council purchases of equipment for City and ProprietaryDepartments in Fiscal Year (FY) 2010-11.Done then addressed each of the above issues. First, in regard to the encumbrance policy,DONE stated that on February 18, 2010, Council voted to limit the access of NeighborhoodCouncils to rollover funds (Council File No. 09-0600-S159), then eliminated the rollover policyfor FY 2010-11 funds. Consequently, DONE encumbered funds for each Neighborhood Councilbased on requests for demand warrants received by April 15, 2011 and executed contracts.The deadlines were the focus of several department communications; however, there were anumber of Neighborhood Councils that were unable to plan accordingly.DONE’s encumbrance policy is defined as monies set aside to pay for requests submitted by aNeighborhood Council by the April 15th deadline and/or operational costs, such as servicesprovided by DONEs contracted vendors, utility bills and month-to-month office and meetingspace expenses. DONE will be developing clearer guidelines and advance notice of deadlinesto encumber funds as long as required conditions are met.DONE considers these concerns valid and has committed to providing greater notice andreviewing the deadlines for submission of funding requests. DONE proposes to provide noticeon the deadlines in January and accepting Neighborhood Councils requests for demand17
  • 18. Page 2 of 3warrants until June 1st. The June 1st deadline is contingent on DONEs ability to implement anelectronic platform for receipt of requests.Next, in regard to alternative funding models for Neighborhood Councils, DONE stated thatdiscussions in regard to this issue have focused exclusively on a grant-based funding systemwith DONE presenting a scenario in which funds could be allocated on a citywide or regionalbasis with Neighborhood Councils applying for funds for specific projects or programs. A certainamount would be provided up front for operational expenses, perhaps 20%, while the rest of thefunding would be grant based. A panel comprised of City staff and Neighborhood Councilrepresentatives can review each proposal and make the funding determination based on agreedupon standards. This process would require strategic planning on the part of NeighborhoodCouncils to solicit the participation of all sectors of the community in determining short and long-term priorities.In the town halls, online survey and work group meetings, the general consensus was thatBoard members were adamantly opposed to changing the current funding system. The mainconcern voiced was the feeling that the decision-making process would be removed from theNeighborhood Council to the City if a grant based funding process was implemented. Therewere also concerns raised about the ability of certain Neighborhood Councils to produce betterwritten proposals and possibly leaving out those who may not have the skills or the time. Manystated that a grant system was too complex and time consuming for Neighborhood Councilvolunteers to use and for DONE to oversee with its limited staffing.In regard to developing a mechanism to allow for the rollover of Neighborhood Council fundsfrom one year to the next for approved projects, DONE stated it proposes to establish aNeighborhood Improvement Project budget, similar to the Capital Improvement Project budgetthat allows allocated funds to roll over from year to year. This provides an option forNeighborhood Councils that wish to implement neighborhood improvement projects that maytake a significant amount of time and money to implement. Work group participants did notagree on whether projects should be tangible or intangible, or whether they should be limited tocapital projects. They did feel, however, that the project should cost in excess of $5,000.Additionally, some felt that the project should be completed within one fiscal year given theturnover of Board members, while others argued that such a short time limit negates a rolloverproject. Stipulating that the funds can only be used for the intended project or be swept by theCity would encourage the completion of the project by incoming Board members. The feelingwas also expressed that capital projects should be undertaken by the City and thatNeighborhood Councils should advocate for priority community projects instead of using theirfunds.Finally, in regard to Neighborhood Council purchases of equipment for City and ProprietaryDepartments in FY 2010-11, DONE stated that this process has been clarified to stated thatNeighborhood Councils are to request a transfer to the City Department and not buy and donatethe equipment because it presents a transparency and accountability problem. There is also aconcern that Neighborhood Councils are being used as an end run on the established budgetsfor the departments. Suggestions were made by the Neighborhood Councils about how toensure the equipment is of benefit to the community, such as having the requesting departmentprovide a written statement indicating the equipment is a high priority for the entire departmentor having each department provide a list of priority items to the Neighborhood Councils. It wasalso expressed that City departments should be a greater priority over schools, and some hadthe view that Neighborhood Councils should not give money to other City agencies since theirneeds were discussed and determined in the budget process.18
  • 19. Page 3 of 3After further consideration and having provided an opportunity for public comment, theCommittee moved to continue this matter. Subsequently, on February 1, 2012, the Committeefurther considered this matter and after having provided a further opportunity for publiccomment, the Committee moved to note and file the November 22, 2011 DONE report. Thismatter is now forwarded to Council for its consideration.Respectfully submitted,ARTS, PARKS, AND NEIGHBORHOODS COMMITTEEMEMBER VOTEKREKORIAN: YESWESSON: ABSENTREYES: YESARL2/2/1211-1020_rpt_apn_2-2-12Not Official Until Council Acts19
  • 20. Department of Neighborhood Empowerment, City of Los AngelesNeighborhood Council Funding Program- 10 -NEIGHBORHOOD COUNCIL ANNUAL BUDGETThe budget should be used as a strategic financial road map to conduct activities that will helpthe NC achieve its goals. It should include the input of stakeholders, be accessible and beaccountable to the rules that govern the usage of public funds. It is also important to articulatethe manner in which the Neighborhood Council’s budget reflects its intended benefit to thecommunity. A good budget outlines in reasonable detail: 1) operating expenses; 2) outreachactivities; 3) neighborhood improvements and/or beautification projects; and 4) NeighborhoodPurposes Grants.The NC budget must be provided in the standardized format using the template provided onthe Department’s website. The different types of expenses are categorized and coded aslisted below (a sample budget is provided on page 12):100 OPERATIONS:These are NC operation expenses and include payments for translation and transcription, rentand maintenance related to facilities, space and storage rentals, supplies and copying forboard meetings and committee meetings, staffing and temporary help, postage, mail service,business cards and letterhead, board retreats and training, and other expenses deemednecessary by the NC board.AUD Audio and Visual ServicesEDU Training and Board RetreatFAC Facilities Related and Space RentalMIS Miscellaneous ExpenseOFF Office Equipment and SuppliesPOS PostageTAC Temporary StaffTRL Translation and Transcription200 OUTREACH:Outreach expenses include, but are not limited to, hosting and maintaining the NC website,newsletters, banners and advertising, stakeholder outreach events, elections, postage andmailings related to outreach efforts, and other general outreach expenditures as approved bythe NC board. Outreach events include CERT training, disaster awareness and preparedness,neighborhood watch and life and safety programs; and should be approved by the NC boardand reflected in the minutes.ADV AdvertisingELE Election Outreach ExpenseEVE Event Expense / Food & RefreshmentsMEE Meeting ExpenseNEW Newsletter ExpenseWEB Website Maintenance/Enhancement/Creation20 XXXXX
  • 21. Department of Neighborhood Empowerment, City of Los AngelesNeighborhood Council Funding Program- 11 -300 COMMUNITY IMPROVEMENT PROJECTS:Community Improvement Projects include costs associated with beautification projects such astree plantings, graffiti abatement, sidewalk washing, median maintenance; and capitalimprovements to City owned facilities such as recreation centers, fire stations, police stationsand parks.CIP Community Improvement Projects400 NEIGHBORHOOD PURPOSES GRANTS:Public schools and 501(c)3 non-profit organizations are eligible to receive grants from NCsthrough the Neighborhood Purposes Grants program. Agencies receiving a grant must providea benefit to the community with the grant funds, be approved by the NC Board and reflected inthe agenda and minutes. For expediency, the NC may submit a board resolution.GRT Neighborhood Purpose GrantELECTRONIC BUDGET TEMPLATENeighborhood Councils are required to submit a board approved budget at the beginning ofeach fiscal year. The budget must be submitted to the Department using the electronicbudget template found on the DONE website, by the Treasurer. This must be done by theestablished deadline, in order to access the NC’s funds.The electronic budget template provides the budget categories that NC are to use, with theapproved line item codes. It is set up to add and indicate the percentage of the total NCbudget that is allocated under each category. The great majority of a NC’s budget should beexpended on activities and products that benefit the community. As such, it is recommendedthat the administrative expenses (Operations) be limited to no more than 20 percent of the totalNC budget.Once the electronic budget template has been completed in accordance with the approved NCbudget, the Treasurer must submit the budget along with a Board Resolution or the meetingagenda and minutes indicating board approval of the budget, to the Department.A copy of the approved electronic budget template can be found on the following page. Thenumbers inserted are a sample only. To access the template, follow this link:(http://done.lacity.org/enet/funding/budgetallocation.aspx)For assistance in this process, please call the NC Help Line at (213) 978-1551. .21 xxxx
  • 22. Department of Neighborhood Empowerment, City of Los AngelesNeighborhood Council Funding Program- 26 -ACCEPTABLE PURCHASES LISTBelow is a list of acceptable P-Card purchase categories. As with all things, this list will changeas Neighborhood Council needs change. A Neighborhood Council must request authorizationfrom the Department to use a category for goods and services not listed below.In addition, all equipment, supplies and services must be for the sole purpose of building thesocial capital of the Neighborhood Council to benefit the community. If you have anyquestions regarding any of the items on the list, please contact the Neighborhood CouncilFunding Helpline at (213) 978-1551 or email done.funding@lacity.orgACCEPTABLE PURCHASE CARD USE CATEGORIES:BUSINESS SERVICES• Automobile Parking Lots and Garages• Equipment Rental• Furniture Rental• Photographic Developing, Studios• Postal Services• Reproduction and Blueprint Services• Tool RentalCOMMUNICATIONS SERVICES• Telecommunication Equipment• Telecommunication ServicePROFESSIONAL SERVICES• Associations, Civic, Social and Fraternal• Schools, Elementary and Secondary• Colleges, Professional Schools• Charitable and Social Service Orgs.REPAIR SERVICES• Electronic Repair Shops• Furniture Repair, Refinishing• Small Appliance Repair ShopsRETAIL SERVICES• Books, Periodicals, Newspapers• Building Materials, Lumber Stores• Candy, Nut, Confectionery Stores• Caterers• Computers, Computer Peripheral• Equipment, Computer Software• Computer Software Stores• Department Stores• Discount Stores• Drug Stores, Pharmacies• Eating Places, Restaurants• Electronics Stores• Fast Food, Restaurants• Florist Supplies, Nursery, Flowers• Glass, Paint, Wallpaper Stores• Grocery Stores, Supermarkets• Hardware Stores• Home Supply Warehouse• Lawn and Garden Supply Stores• Music Stores• Office and Commercial Furniture• Office, Photographic and Photocopy• Paints, Varnishes and Supplies• Promotional Material Stores• Second Hand Stores• Stationery, Office Supplies, Printing• Variety Stores• Wholesale ClubsTRANSPORTATION SERVICES• Charter Bus Service*• Courier Services• Freight Forwarders• Truck and Utility Trailer Rental**Requires advance approval22 xxxx
  • 23. Department of Neighborhood Empowerment, City of Los AngelesNeighborhood Council Funding Program27UNACCEPTABLE PURCHASESBelow are transaction guidelines for the use of Neighborhood Council funds. Please contactthe Neighborhood Council Funding Helpline at (213) 978-1551 or emaildone.funding@lacity.org in the event you are unsure of the proper transaction method for anyexpenditure.The following are prohibited:1. Any purchases made without the approval of the Neighborhood Council governing body,and any purchases that are not identified in the NC approved budget.2. Payment for services over an extended period of time that may require a personalservices agreement executed by the Department. Treasurers should consult with theDepartment prior to using the P-card for this purpose.3. Split charges - using multiple transactions for a single charge to circumvent themaximum single transaction amount allowed on the P-card.4. Donations of money or goods to individuals or groups. State law prohibits public fundsfrom being given as a gift.5. Items or services from an entity that did not participate in a fair and open selectionprocess.6. Any purchases and/or capital improvement projects that increase the value of privateproperty or do not benefit the general public.7. Events or projects that do not have the required insurance and permits. Liability isalways an important consideration with any project. Please contact the Department forfurther information.8. Third-party reimbursement. Payments should be in the form of a DW for a particularvendor, not to a third party who will then pay the vendor.9. Purchases of alcohol, tobacco, firearms, or adult entertainment products.10.Purchases that violate the constitutional separation of church and state (City fundscannot be used to endorse religion and/or interfere with free religious exercise)11.Purchases that violate City and/or State conflict of interest laws.12.Supporting or opposing ballot measures or candidates, and political forums or debatesunless following City Attorney guidelines.13.Lawsuits against the City or City agencies, and appeals against any discretionarydecisions made by any City agency.23 xxx