This document discusses reforms to the neighborhood council stakeholder system in Los Angeles. It proposes defining the categories of "live, work, own property" stakeholders and considering limits on "factual basis stakeholders" who do not fit those categories, such as capping their board seats at 10% or requiring documentation to verify their stake in the community. Previous regulations are outlined for context. The motion at the end proposes a comprehensive review of the stakeholder definition and processes to address issues like preventing takeovers by outside interests and providing accountability for self-affirmed "factual basis stakeholders".

1. Neighborhood Council Plan Review and Reform Initiative
Session I Stakeholder Worksheet
Stakeholder Definitions
1. Should current stakeholder designations live, work, and own property be specifically
defined?
2. If so, what should the definitions be?
a. Live
b. Work
c. Own property

2. Neighborhood Council Plan Review and Reform Initiative
Factual Basis Stakeholders
1. Should there be factual basis stakeholders?
2. Should all neighborhood councils be required to include factual basis stakeholders as board
members and/or voters or should individual neighborhood councils be allowed to determine
whether they will include factual basis stakeholders as board members and/or voters?
3. Should a common definition be required for all neighborhood councils or should individual
neighborhood councils be allowed to write their own factual basis definition?
4. If all neighborhood councils should be required to include factual basis stakeholder seats on
their boards, should the number of those seats be limited? If so, to what number or percentage?
5. Should seats reserved for categories such as educational or religious stakeholder, which
may be held by a factual basis stakeholder, be counted against the number of factual basis
seats allowed?
6. Should factual basis stakeholders be allowed to simply affirm their status or should
documentation be required to verify status?
7. Should there be a single citywide regulation governing factual basis status or should
individual neighborhood councils be allowed to determine whether to require simple affirmation or
documentation?

3. Neighborhood Council Plan Review and Reform Initiative
Current regulations regarding stakeholders
(2) neighborhood council membership will be open to everyone who lives, works or owns
property in the area (stakeholders);
—Los Angeles City Charter, Article IX, Section 906
(a) By Laws. Each neighborhood council seeking official certification from the City shall
submit an organization plan and by­laws to the Department of Neighborhood
Empowerment showing, at a minimum:
(2) that neighborhood council membership will be open to everyone who lives,
works, owns property in the neighborhood and also to those who declare a stake in
the neighborhood and affirm the factual basis for it;
—Los Angeles Administrative Code, Chapter 28, Sec. 22.811.
Certification of Neighborhood Councils.
It is recommended and advised that all Neighborhood Councils revise their bylaws to
include language stating that:
1. Each Neighborhood Council should allow for the inclusion of a minimum of one
board seat or a maximum of (10) percent of the total board composition that factual
basis stakeholders can run and vote for in all upcoming elections. If no factual basis
stakeholder chooses to seek election to that seat if may be filled with a non­factual
basis stakeholder.
—Board of Neighborhood Commissioners Policy 2011­02

4. Neighborhood Council Plan Review and Reform Initiative
Previous regulations regarding stakeholders (in effect
2001­2007)
The bylaws must state that membership in the council is open to all community
stakeholders.
Example: “Membership in this Neighborhood Council is open to all Community
Stakeholders or Stakeholders. A Stakeholder is a person who lives, works, or owns
property within the Neighborhood Council boundaries. In addition, ... (Insert any
additional classes that you choose to add, also make sure that you specify any
requirements on these optional stakeholder categories, e.g., Stakeholders also
include those persons who participate in educational institutions located in the
neighborhood council boundaries.)”
Note that persons who live, work, or own property within the neighborhood Council
boundaries are Mandatory Classes of stakeholders and must be included in the
neighborhood council. You may add any number of additional stakeholder classes. The
Plan provides the following as examples of other optional stakeholder classes that you
might choose to add : educational institutions, religious institutions, community
organizations or other non­profit organizations, block clubs, neighborhood associations,
homeowners associations, apartment associations, condominium associations, resident
associations, school/parent groups, faith based groups and organizations, senior
groups and organizations, youth groups and organizations, chambers of commerce,
business improvement districts, service organizations, park advisory boards, boys and
girls clubs, cultural groups, environmental groups, codewatch, neighborhood watch, police
advisory board groups, and or redevelopment action boards.
—Legal Issues for Neighborhood Councils, Office of City Attorney, 2006

5. Neighborhood Council Plan Review and Reform Initiative
Motion by Councilman Jose Huizar regarding factual basis
stakeholders (CF 12­1682)
The Los Angeles Neighborhood Councils are in the process of conducting their bi­annual Board elections. On
Saturday, October 13, 2012, the Eagle Rock Neighborhood Council conducted its elections where 313 of the 792
votes cast were from those claiming to be "factual basis stakeholders" who are reported to have little or no
relationship with the Eagle Rock community. This was clearly an attempt by outside interests to take control of the
Eagle Rock Neighborhood Council and constitutes an abuse of the Neighborhood Council (NC) electoral process.
With the 1999 City Charter changes, the voters established the neighborhood council system and defined
stakeholders as those who “live, work, or own property in the certified neighborhood council”. In April 2006, the City
Council by ordinance, as provided in the Charter, created the Neighborhood Council Review Commission
(NCRC) and tasked the Commission to review the efficacy of neighborhood council system. One specific area of
review was the definition of stakeholder.
In December 2007, the Council approved various recommendations from the NCRC’s Final Report relative to NC
elections, including Recommendation 42a, as follows:
“The Plan for Citywide System of Neighborhood Councils to state that stakeholder status in Neighborhood
Councils shall be open to those who live, work, or own property in the Neighborhood and also to those who
declare a stake in the neighborhood and affirm the factual basis for it.”
During the hearing process leading to the adoption of the above stakeholder definition, some expressed concern
that the definition was vague, ambiguous, and overbroad and that it did not provide sufficient protection for NCs
from takeover by outside interests. In addition, authority for a stakeholder “self affirmation” of the “factual basis”
was seen as lacking an appropriate mechanism for accountability. The definition and procedures appeared to
need more clarity to protect NC integrity.
The above seems prophetic with respect to the recent Eagle Rock NC elections. The current definition has been
problematic for some time and given recent electoral challenges at the Eagle Rock NC, it is timely that issue of
“factual basis stakeholders” be reexamined in a comprehensive manner by the Department of Neighborhood
Empowerment, with the assistance of the City Attorney, and with input from the Neighborhood Councils.
I THEREFORE MOVE that the Department of Neighborhood Empowerment (DONE), with the assistance of
the City Attorney, and with input from the Neighborhood Councils, be instructed to prepare and present a
comprehensive review of the definition and processes for qualifying a Neighborhood Council stakeholder, as
set forth in the City Charter, the Plan for a Citywide System of Neighborhood Councils and DONE’s
Neighborhood Council 2012 Election Manual, including in that review specific qualifications for “factual basis
stakeholders,” limiting to a maximum of two the number of board seats for which “factual. basis
stakeholders” may run or vote (with the balance being comprised of individuals that either live, work, own
property or go to school within the NC boundaries), and the process for documenting “factual basis
stakeholder” status.
Moved by Councilman Jose Huizar, seconded by Councilman Bernard Parks