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Session IV Worksheet: Neighborhood Council Funding, Grants and Donations

• Shouldtheannualallocationsystemprovidinganequalamountofmoneytoeachneighborhoodcouncil, regardlessofpopulation,bemaintained?

• Ifnot,shouldasystemallocatingfundingbasedonpopulationbeinstituted?

• Shouldahybridsystemallocatingsomefundingequallyandsomeonapercapitabasisbeconsidered?

• Shouldregulationsbeestablishedtoallowneighborhoodcouncilstoseekgrants,donations,orothersources ofincomeindependentofmunicipalfunds?

• Shouldneighborhoodcouncilsberequiredtospendcertainpercentagesforcertaincategorieswhichare alignedwiththemissionoftheneighborhoodcouncilprogram,e.g.,25percentofbudgetforoutreach?

• Shouldneighborhoodcouncilsbeallowedtoprovidefundstoothercitydepartments?

— LOS ANGELES CITY CHARTER ARTICLE IX —Sec. 911. Appropriation.TheMayorandCouncilshallappropriatefundsfortheDepartmentofNeighborhoodEmpowermentandforthestartupandfunctioningofneighborhoodcouncilsforthefirsttwoyearsaftertheeffectivedateofthisArticle.Fundsshallbeappropri-atedintoaspecialfundtobeestablishedbyordinance.TheMayorandCouncilshallthereafterappropriatefundsforthedepartmentandneighborhoodcouncilsatleastoneyearinadvanceofeachsubsequentfiscalyear.

— 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)Moneyappropriated in thebudget eachyear for certifiedNeighborhoodCouncils for costs related to the functions,operations,anddutiesofbeingacertifiedNeighborhoodCouncilshallbeplacedintheDepartmentofNeighborhoodEm-powermentFund.Thefunctions,operations,anddutiesofacertifiedNeighborhoodCouncilinclude,butarenotlimitedto,meetingandofficespace,officeequipment,computers,supplies,andcommunications,suchasthecostsassociatedwithnewsletters,postage,orprintingwrittenmaterials.At thediscretionofeachNeighborhoodCouncil,andasapprovedbytheDepartmentofNeighborhoodEmpowerment,allorpartofthemoneysoappropriatedmaybeusedforneighborhoodimprovementprojects.(2)AnymoneywhichtheMayorandCouncilappropriateasgrantfundseachfiscalyearforcertifiedNeighborhoodCoun-cilsshallbeavailableforvariousneighborhoodimprovementprojects.Inordertobeeligibleforgrantmoney,acertifiedNeighborhoodCouncilshallsubmitanapplicationtotheDepartmentandmaybeawardedgrants,pursuanttotheprovi-sionsassetforthinArticleIXSection2ofthePlan.

The following sections are no longer in effect as a result of three-year “sunset” clauses. They are included for informational purposes only.

Sec. 22.801.1. Acceptance of Donations and Gifts by the Department.ANeighborhoodCouncilmayacceptgiftsasdescribedinSection22.814ofthisCodeorrequestthattheDepartmentorCityCouncilacceptthegiftonitsbehalf.TheDepartment,underthelimitedcircumstancessetforthbelow,shallhavethepowerandauthoritytoacceptgiftsonbehalfoftheCityofLosAngelesthatrelatetotheDepartment’sprogramsandactivities,thatrelatetoanyoralloftheNeighborhoodCouncils,orthatrelatetotheCitywidesystemofNeighborhoodCouncils.IftheDepartmentisactingtoacceptagiftasauthorizedunderthissection,thentheGeneralManageroftheDepartment,ortheGeneralManager’sdesignee,shallbetheagentauthorizedtoacceptgifts.Giftsmayincludeanyitem,monetaryornon-monetary,tangibleorintangible,thatiscontributed,provided,given,trans-ferred,donated,bequeathedordevisedtotheCity.Theauthoritytoacceptgiftsincludestheauthoritytorejectorrescindtheacceptanceofanygiftatanytime.Nothinginthissectionrequirestheacceptanceorretentionofanygift.(a)LimitationsonAcceptanceofGifts.Withtheexceptionofagiftthatisaleaseholdinterestforoffice,storageormeeting

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space,asfurtherdescribedinSubsection(b)below,nogiftmaybeacceptedbytheDepartmentthatexceedsthevalueof$10,000andanygiftinexcessofthisamountshallbesubmittedtoCityCouncilforacceptanceorrejection.(b)DonatedOfficeSpaceorMeetingSpace.TheNeighborhoodCouncilsshallnothaveanyauthoritytoacceptanyinterestinrealproperty,includinganyfeesimpleinterestoranyleaseholdinterest.However,aNeighborhoodCouncilmayrequestthattheDepartment,whichisherebygrantedtheauthority,acceptaleaseonitsbehalfaslongasthegiftisaleaseholdinter-estforoffice,storage,ormeetingspace,theleasedoesnotexceedaone-yearterm,andtheleaseholdinterestisvaluedlessthan$20,000peryearor$1,666.66permonth.Ifthevalueforthatleaseholdgiftexceedstheseallowablemonetarythresholdvaluesortheallowableleaseholdterm,thentheleaseholdgiftmustbesubmittedtoCityCouncilforacceptanceorrejection.(c)AssessmentofValue.ForthepurposesofdeterminingthevalueofanygiftacceptedbytheDepartment,orwhentheDepartmentisrequestedtoacceptagiftbyanyNeighborhoodCouncil,includingdeterminingwhetherthegiftisvaluedinexcessofthemonetarythresholdvaluethatrequiresthegifttobesubmittedtoCityCouncil,thenthevalueofthegiftshallbecalculatedasfollows:(1)Ifthegiftismonetaryinnature,thenthevalueismeasuredinUnitedStatesdollars.(2)Thevalueofallnon-monetarygiftsisdeterminedinthesolediscretionoftheGeneralManager,ortheGeneralManager’sdesignee,basedonhisorherdeterminationofthefair-marketvalueofthegift.(d)DonorDisclosureForm.Nogiftvaluedatmorethan$500shallbeacceptedbytheDepartmentortheNeighborhoodCouncilsunlessthepersonorentitythatisthesourceofthegiftcompletestheDepartment’sapproveddonordisclosureform.Therequirementforcompletingadonordisclosureformshallnotbeavoidedbydonatingsuccessiveorincrementalgiftsduringasinglecalendaryear,wherethesuccessiveorincrementalgiftswouldbeindependentlyvaluedatlessthan$500,buttheaccumulatedvalueofthegiftsoverthecourseofthatcalendaryearexceedsthevalueof$500.Ifanypersongivesordonatesanaccumulationofgiftswithinthesamecalendaryearthattotalinvaluemorethan$500,thenthedonormustcompletethedonordisclosureformforeachgiftthatexceedsthisallowableaccumulatedtotal.ThedonordisclosureformshallbedatedandcompletedwithinformationfromthedonorthatincludesandmemorializesthefollowinginformationrequiredbyStatelaw:(1)ThattheDepartmentortheNeighborhoodCouncil,whicheverisapplicable,shallreceiveandcontrolthegift;(2)ThatthegiftshallbeusedsolelyforofficialbusinessrelatedtotheNeighborhoodCouncilsystem;(3)Whetherthegiftcontainsanyrestrictions, limitationsorconditions,solongasthedonordoesnotdesignatethegiftforanyspecificperson(s).Thedonorshallstateandlistthenamesofpersonsorthecategoryofpersonsusingthegift,e.g.,theboardoftheNeighborhoodCouncil,theexecutivecommitteeoftheNeighborhoodCouncil,orthestakeholdersoftheNeighborhoodCouncil.However,theDepartment,ortheNeighborhoodCounciliftheNeighborhoodCouncilcontrolsthegift,shalldetermineinitssolediscretionthespecificperson(s)whomayusethegift;and(4)Statesthedonor’snameoridentifyinginformation,address,adescriptionofthegift,andthefair-marketvalueoranes-timateofthefair-marketvalueforthegift.Inaddition,thedonordisclosureformshallcontainanareafortheentryofinformationbytheDepartmentortheNeighbor-hoodCouncilthatdescribestheofficialuseforthegift.Thedonordisclosureformshallalsorequirethedonortodiscloseanycontract,license,permitorprojectthatthedonoriscurrentlyseeking,intendstoseek,orsoughtinthepastsixmonthsfromtheCity.ThedonordisclosureformshallbefiledwiththeDepartmentwithin30daysofthereceiptofthegift.(e)PostAcceptanceHandlingofGifts.MonetarygiftsacceptedbytheDepartmentshallbedepositedintotheNeighborhoodEmpowermentTrustFund(TrustFund)inaccordancewithSection5.485ofthisCode.IftheDepartmentacceptsanuncon-ditionalmonetarygiftonbehalfofaNeighborhoodCouncil,thentheDepartmentshalldeposit10%oftheamountofthegiftintoaspecialaccountfordisbursementtoNeighborhoodCouncilsineconomicallydisadvantagedareasconsistentwithSection5.485(d)ofthisCode.TheDepartmentshallacceptnon-monetarygiftsbydelivery,receiptofphysicalpossession,orothermethodoftransferoftitleorpossessionasisrequiredbylaw.TheDepartmentshalltrackphysicalinventorydonatedtotheNeighborhoodCouncilsystembymaintaininganynecessaryperpetualstockrecordsoffurnitureorequipment,asrequiredunderSections7.79and7.84ofthisCode.TheDepartmentwillenterallmonetarygiftspertainingtotheNeigh-borhoodCouncilsystemintotheCity’sFinancialManagementInformationSystem(FMIS)andwillenterallnon-monetarygiftspertainingtotheNeighborhoodCouncilsystemandvaluedabove$5,000intotheCitywideInventorySystem(CWIS).Itemsvaluedabove$5,000willbeassignedaninventorycontrolnumberandaninventorytagwillbeprovidedtotheNeigh-borhoodCouncilbytheDepartmentforthoseitems.TheDepartmentshallinsurethatallgiftsacceptedforthebenefitoftheNeighborhoodCouncilsystemareappropriatelyregisteredorrecordedinaccordancewiththeprovisionsinthissection.(f)RestrictedGifts.TheDepartmentshallcomplywithanyspecialterms,conditionsorrestrictionsonanygift.Inaddition,

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ifanymonetarygiftthatisacceptedbytheDepartmentcontainsterms,conditionsorrestrictions,thenthemoniesshallbedepositedinanappropriateaccountintheTrustFundinaccordancewithSection5.485ofthisCode.TheDepartmentshallnotifytheCityControllerofanyspecialterms,conditionsorrestrictionsplacedontheuseofthosemonies.(g)ExpenditureofMonies.TheDepartmentisauthorizedtoexpendmoniesfromtheTrustFund,includingexpendituresfromanyaccountorsub-accountintheTrustFund,eitheronbehalfoftheDepartmentoronbehalfofanyorallofthecertifiedNeighborhoodCouncils,andmayexpend funds for thepurchaseofequipment, servicesor furnishings insup-portoftheestablishedprogramsandactivitiesoftheDepartmentortheNeighborhoodCouncils,orinfurtheranceofthepurposesorgoalsoftheCitywidesystemofNeighborhoodCouncils,asstatedintheCityCharter,thePlan,andtheRegula-tionsimplementingthePlan,subjecttoanyspecialterms,conditionsorrestrictionsattachedtothegift.MoniesmayalsobeexpendedonneighborhoodimprovementprojectsthathavebeenapprovedundertheadministrativeprocessesestablishedbytheDepartment.Priortotheexpenditureofanymoniesinanyaccountorsub-accountthatwasestablishedbecauseagiftcontainedaspecialterm,conditionorrestriction,theDepartmentshallprovidetheControllerwithwrittendocumentationtodemonstratethatanyexpenditurecomplieswiththespecialterm,conditionorrestriction.(h)Record-Keeping.TheDepartmentshallprepareaperiodicwrittenreportthatcontainsinformationcoveringallgiftsac-ceptedintheprecedingsix-monthperiodoftime,commencingonApril1standOctober1stofeachyear,andthisreportshallbesubmittedtoCityCouncilwithcopiestotheControllerandtheBoardofNeighborhoodCommissionerswithin30daysafterthecloseofthesix-monthperiod.ThisreporttoCityCouncilshallincludethefollowinginformation:(1)AnaccountingoftheTrustFundandtheNeighborhoodCouncilcheckingaccounts,includingabalancestatement,alistofdeposits,identificationofthenameofthedonorthatisthesourceofthedonatedmonies,thedateofthedeposit,alistofallexpenditures,includingthepayee,theamountpaid,thedate,andthepurposeofeachexpenditure.(2)AsummaryofthedonordisclosureformsthathavebeenfiledwiththeDepartmentthatliststhegiftsthathavebeenac-ceptedbytheCitythroughtheDepartmentand/orNeighborhoodCouncils.Thissummaryshallstatethedonor’sname,abriefdescriptionofthegift,thedateofthegift’sacceptance,andthegift’svalue.Copiesoftherelevantdonordisclosureformsthathavebeenreferencedinthesummaryshallbeaffixedtothesummary.(3)Forthoseacceptedgiftsinwhichadonordisclosurewasnotsubmitted,theDepartmentshallprovidethefollowingin-formation:(i)ThattheDepartmentortheNeighborhoodCouncil,whicheverisapplicable,shallreceiveandcontrolthegift.(ii)ThatthegiftshallbeusedsolelyforofficialbusinessrelatedtotheNeighborhoodCouncilsystem.(iii)Whetherthegiftcontainsanyrestrictions,limitationsorconditions.TheDepartmentshallalsostateandlistthenamesofpersonsorthecategoryofpersonsusingthegift,e.g.,theDepartmentorthespecificNeighborhoodCouncil.(iv)Thedonor’snameoridentifyinginformation,address,adescriptionofthegift,andthefair-marketvalueoranestimateofthefair-marketvalueforthegift.(4)Alistofanydonatedleaseholdinterestinoffice,storage,ormeetingspacethatisoccupiedbyaNeighborhoodCouncil,includingthelocationofthespace,theNeighborhoodCounciloccupyingthespace,thedonor’sname,thevalueofthelease-holdinterest,theleaseholdterm,andanylimits,restrictions,orconditionsuponwhichthedonationisbased.(i)ProhibitedGifts.NogiftshallbeacceptedbytheDepartmentthat:(1)Involvesorrelatestoprovidingchildcareservices.(2)Isagiftfromaforeignordomesticgovernmententity,excludinggrantsorgrantfundingrelatedtotheCitywideSystemofNeighborhoodCouncils.(3)Involvesafeeinterestinrealproperty,oranypartialorfullownershipinterestinrealproperty,exceptthataleaseholdorpossessoryinterestforoffice,storageormeetingspaceasdescribedinSubsection(b),above,isallowed.(4)RequiresongoingmaintenanceorcoststhatwillbeexpendedbytheCityforupkeepinanamountexceeding$1,000annually,suchasagiftofamonument,artwork,ormuralthatrequiresongoingandcontinuousexpensesbytheCitytomaintainthegift.(5)Includeslivestockoranimals,whetherrareordomestic,wildortame.(6)Isagiftinvolvingamotorizedvehicle,automobile,aircraftorboat,oranyvehiclethatrequiresregistrationwiththeCali-forniaDepartmentofMotorVehicles.TheBoardofNeighborhoodCommissionersmaydevelopfurtherpolicieswithrespecttothespecifictypesofgiftsthatmayormaynotbeaccepted.(j)Theacceptanceofanygiftunderthissectiondoesnotwarrant,guarantee,orpurporttoestablishanybenefitsthatmaybederivedunderStateorFederallaw.However,theDepartmentisauthorizedtofacilitatetheattemptbyanydonorofagifttoreceivefromtheDepartmentawrittenacknowledgmentofthegiftfortaxpurposes,includingthattheGeneralManagerof

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theDepartment,ortheGeneralManager’sdesignee,mayprovideacontemporaneouswrittenacknowledgment,adisclosureregardingaquidproquocontribution,oranymandatorydisclosureregardingthegiftfortaxrelatedpurposes.(k)Theprovisionsofthissectionshallexpire,andbedeemedtohavebeenrepealed,threeyearsafteritseffectivedate,unlessearlieramendedandextendedbytheCouncilbyordinance.SECTIONHISTORYAddedbyOrd.No.179,545,Eff.3-16-08.

Sec. 22.814. Acceptance of Donations and Gifts.ANeighborhoodCouncilthathasbeencertifiedunderthePlanforaCitywideSystemofNeighborhoodCouncils(Plan)andtheRegulationsImplementingthePlan(Regulations)underthelimitedcircumstancessetforthbelow,shallhavethepowerandauthoritytoacceptgiftsonbehalfoftheCityofLosAngelesthatrelatetothatNeighborhoodCouncil’spurposes,mis-sions,orgoals,toitsprogramsoractivities,ortotheCitywideSystemofNeighborhoodCouncilsiftheacceptanceofthegiftisconsistentwiththepurposesandgoalsexpressedintheCityCharter,thePlan,andtheRegulations.Giftsmayincludeanyitem,monetaryornon-monetary,tangibleorintangible,thatiscontributed,provided,given,trans-ferred,donated,bequeathedordevisedtotheCitythroughtheNeighborhoodCouncils.Theauthoritytoacceptanygiftin-cludestheauthoritytorejectorrescindtheacceptanceofanygiftatanytime.Nothinginthissectionrequirestheacceptanceorretentionofanygift.NothinginthisarticleprecludestheNeighborhoodCouncilfromrequestingthattheCityCouncilortheDepartmentmakeadeterminationregardingtheacceptanceofanygift.(a)LimitationsonAcceptanceofGifts.ANeighborhoodCouncilshallonlyacceptgiftsthatrelatetoitspurpose,mission,policies,andprograms,totheCitywidesystemofNeighborhoodCouncils,consistentwiththeCityCharter,thePlanandtheRegulations.NogiftshallbeacceptedbyanyNeighborhoodCouncilthatexceeds$10,000invalue.Giftsvaluedinexcessof$10,000shallbesubmittedtoCityCouncilforacceptanceorrejection.NogiftofrealpropertyshallbeacceptedbytheNeighborhoodCouncil,includinganygiftforafeesimpleestateoralease-holdinterestinproperty.Giftsforaleaseholdinterestinrealpropertyforatermofoneyearorless,comprisingoffice,stor-age,ormeetingspace,maybeacceptedbytheDepartmentactingonbehalfoftheNeighborhoodCouncilunderSection22.801.1ofthisCode.TheNeighborhoodCouncilmayalsorequestthatCityCouncilacceptanygiftonitsbehalfinvolvingrealproperty.(b)AssessmentofValue.ForthepurposesofdeterminingthevalueofanygiftthatisacceptedbyaNeighborhoodCouncil,includingwhetherthegiftisvaluedinexcessofthemonetarythresholdvaluethatrequiresthegifttobesubmittedtoCityCouncil,thenthevalueofthegiftshallbecalculatedasfollows:(1)Ifthegiftismonetaryinnature,thenthevalueismeasuredinUnitedStatesdollars.(2)Thevalueofallnon-monetarygiftsisdeterminedbasedonanassessmentofthegift’sfairmarketvaluebythegoverningbodyoftheNeighborhoodCouncilatthepublicmeetingwherethedecisionismadetoacceptthegift.(c)DonorDisclosureForm.Nogiftvaluedatmorethan$500shallbeacceptedunlessthepersonorentitythatisthesourceofthegiftcompletestheDepartment’sapproveddonordisclosureform.Therequirementforcompletingadonordisclosureformshallnotbeavoidedbydonatingsuccessiveorincrementalgiftsduringasinglecalendaryear,wherethesuccessiveorincrementalgiftswouldbeindependentlyvaluedatlessthan$500,buttheaccumulatedvalueofthegiftsoverthecourseofthatcalendaryearexceedsthevalueof$500.Ifanypersongivesordonatesanaccumulationofgiftswithinthesamecalendaryearthattotalinvaluemorethan$500,thenthedonormustcompletethedonordisclosureformforeachgiftthatexceedsthisallowableaccumulatedtotal.ThedonordisclosureformshallbedatedandcompletedwithinformationfromthedonorthatincludesandmemorializesthefollowinginformationrequiredbyStatelaw:(1)ThattheNeighborhoodCouncilshallreceiveandcontrolthegift;(2)ThatthegiftshallbeusedsolelyforofficialbusinessrelatedtotheCitywidesystemofNeighborhoodCouncils;(3)Whetherthegiftcontainsanyrestrictions, limitationsorconditions,solongasthedonordoesnotdesignatethegiftforanyspecificperson(s).Thedonorshallstateandlistthenamesofpersonsorthecategoryofpersonsusingthegift,e.g.,theboardoftheNeighborhoodCouncil,theexecutivecommitteeoftheNeighborhoodCouncil,orthestakeholdersoftheNeighborhoodCouncil.However,theNeighborhoodCouncil,initssolediscretion,shalldeterminethespecificperson(s)whomayusethegift;and(4)Statesthedonor’snameoridentifyinginformation,adescriptionofthegift,andthefair-marketvalueoranestimateofthefair-marketvalueforthegift.Inaddition,thedonordisclosureformshallcontainanareafortheentryofinformationbytheDepartmentortheNeighbor-

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hoodCouncilthatdescribestheofficialuseforthegift.Thedonordisclosureformshallalsorequirethedonortodiscloseanycontract,license,permitorprojectthatthedonoriscurrentlyseeking,intendstoseek,orsoughtinthepastsixmonthsfromtheCity.ThedonordisclosureformshallbefiledwiththeDepartmentwithin30daysofthereceiptofthegift.(d)MethodofAcceptance.Priortoconductinganypublichearingtoacceptorrejectanygift,theNeighborhoodCouncilmusthaveacompleteddonordisclosureformifthatformisrequiredunderSubsection(c)above.Theacceptanceof thegiftbytheNeighborhoodCouncilshalloccuratameetingthat isnoticedincompliancewiththeRalphM.BrownAct.TheNeighborhoodCouncilshalllistonitsagendaforthepublicmeetinganitemthatdescribesthegift,thegiftsourceordonor,thattheNeighborhoodCouncilwillmakeadeterminationregardingthegift’svalue,andthattheNeighborhoodCouncilmaytakepossibleactionregardingtheacceptanceorrejectionofthatgiftorreferthegifttoCityCouncilortheDepartmentforaction.Whenagiftisvaluedatlessthan$500andthedonordisclosureformisnotrequiredtobecompleted,theNeighborhoodCouncilmaydelegatetoamemberofitsboardtheabilitytoacceptthesegiftsandtodeterminetheirvalue.Thisdelegationofpowertoaboardmembershalloccuratapublicmeetingandtheboardmemberacceptingthedelegationshallfile,onamonthlybasis,alistcontainingtheinformationspecifiedinSubsection(i)(2),below.(e)Accounts/Post-AcceptanceofMonetaryGifts.NeighborhoodCouncilsshalldepositmonetarygiftsintoanappropriateaccountinthe“NeighborhoodEmpowermentTrustFund”(TrustFund)oftheCity’sTreasuryinaccordancewithSection5.485ofthisCodeorintoacheckingaccountestablishedpursuanttoSection22.815ofthisCode.TheNeighborhoodCoun-cilshalldeposit10%ofthevalueofallunconditionalmonetarygiftsthatitreceivesintoaspecialaccountfordisbursementtoNeighborhoodCouncilsineconomicallydisadvantagedareasconsistentwithSection5.485(d)ofthisCode.(f)Post-Acceptance/Non-MonetaryGifts.NeighborhoodCouncilsareexemptfromregistrationofallnon-monetarygifts,suchasphysicalpropertyitems,officeequipment,inventoryorsupplies,withtheCitywideInventorySystem,includingthemaintenanceofanynecessaryperpetualstockrecordsoffurnitureorequipment,asrequiredunderSections7.79and7.84ofthisCode.However,NeighborhoodCouncilsshallreportallmonetarygiftstotheDepartmentforentryintotheCity’sFinancialManagementInformationSystemandshallreportallnon-monetarygiftsvaluedabove$5,000totheDepartment.Fornon-monetarygiftsvaluedabove$5,000,theDepartmentshallprovidetheNeighborhoodCouncilwithaninventorycontrolnumberandaninventorytagforthegiftsandtheNeighborhoodCouncilshallaffixtheinventorytagtothegift.(g)RestrictedGifts.NeighborhoodCouncilsshallensurecompliancewithanyspecialterms,conditionsorrestrictionsat-tachedtotheuseofanygift.Ifanymonetarygiftcontainsrestrictedterms,themoniesshallbesegregatedfromotherac-countsandearmarkedwiththerequiredrestrictions.(h)ExpenditureofMonies.NeighborhoodCouncilsshallhavethepowerandauthoritytoexpendfundsforcostsrelatedtothefunctions,operationsanddutiesofbeingacertifiedNeighborhoodCouncil,including,butnotlimitedto,leasingspaceforofficeuse,meetingsorstorage,thepurchaseofofficeequipment,computers,supplies,orexpendituresforcommunica-tions,suchasthecostsassociatedwithnewsletters,postageorprintingwrittenmaterials.NeighborhoodCouncilsmayalsoexpendthefundsonneighborhoodimprovementprojectsas longas theappropriationofmonies forneighborhoodimprovementprojectshavebeenapprovedundertheadminis-trativeprocessesestablishedbytheDepartmentofNeighborhoodEmpowerment.AllNeighborhoodCouncilrequestsforexpendituresfromtheTrustFundshallbeprocessedwiththeControllerthroughtheGeneralManageroftheDepartment,ortheGeneralManager’sdesignee.ExpendituresbytheNeighborhoodCouncilsfromthecheckingaccountshallbemadebyanegotiablewritteninstrumentandshallbearthesignaturesoftheNeighborhoodCouncil’sTreasurerandthePresidentorVice-President.(i)Record-Keeping.InadditiontoforwardingalldonordisclosureformstotheDepartmentwithin30daysofthedateofthereceiptofthegift,theNeighborhoodCouncilshallkeepawrittenrecordofallacceptedgifts.TherecordshallbesubmittedtotheDepartmentonMarch1standSeptember1stofeachyear.Therecordshallcovertheimmediatelyprecedingsix-monthperiodoftimeandcontainthefollowinginformation:(1)Anaccountingofallacceptedmonetarygifts,whichshallstatetheamountofthegift,thedateaccepted,andthesourceordonorofthegift.Inaddition,thereportshalllistalldepositsandexpendituresfromtheTrustFundandthecheckingaccount,includingthepayee,theamountpaid,thedate,andthepurposeoftheexpenditureoradescriptionoftheitempurchased;and(2)AstatementthattheNeighborhoodCouncilshallreceiveandcontrolthegift.AstatementthatthegiftshallbeusedsolelyforofficialbusinessrelatedtotheCitywidesystemofNeighborhoodCouncils.Whetherthegiftcontainsanyrestrictions,limitationsorconditions.Thenamesofpersonsorthecategoryofpersonsusingthegift,e.g.,theboardoftheNeighborhood

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Council,theexecutivecommitteeoftheNeighborhoodCouncil,orthestakeholdersoftheNeighborhoodCouncil.Thedo-nor’snameoridentifyinginformation,adescriptionofthegift,andthefair-marketvalueoranestimateofthefair-marketvalueofthegift.Forthosegiftsthathaveavalueoraccumulatedvalueover$500duringanycalendaryear,acopyofthedonordisclosureform.(j)ProhibitedGifts.NogiftshallbeacceptedbyaNeighborhoodCouncilthat:(1)Involvesorrelatestoprovidingchildcareservices.(2)Isagiftfromaforeignordomesticgovernmententity,excludinggrantsorgrantfundingrelatedtotheCitywidesystemofNeighborhoodCouncils.(3)Involvesanyownershiporpossessoryinterestinrealproperty,includingafeesimpleorleaseholdinterest.(4)RequiresongoingmaintenanceorcoststhatwillbeexpendedbytheCityforupkeepinanamountexceeding$1,000annually,suchasagiftofamonument,artwork,ormuralthatrequiresongoingandcontinuousexpensesbytheCitytomaintainthegift.(5)Includeslivestockoranimals,whetherrareordomestic,wildortame.(6)Isagiftinvolvingamotorizedvehicle,automobile,aircraftorboat,oranyvehiclethatrequiresregistrationwiththeCali-forniaDepartmentofMotorVehicles.TheBoardofNeighborhoodCommissionersmaydevelopfurtherpolicieswithrespecttothespecifictypesofgiftsthatmayormaynotbeaccepted.(k)Theacceptanceofanygiftpursuanttotheprovisionsofthisarticledoesnotwarrant,guarantee,orpurporttoestablishanybenefitsthatmaybederivedunderStateorFederallaw.However,theNeighborhoodCouncilsareauthorizedtofacilitatetheattemptbyanydonorofagifttoreceiveanacknowledgmentofthegiftfortaxpurposes,includingthattheTreasureroftheNeighborhoodCouncilmayprovideacontemporaneouswrittenacknowledg-ment,adisclosureregardingaquidproquocontribution,oranymandatorydisclosureregardingthegift for taxrelatedpurposes.(l)Theprovisionsofthissectionshallexpire,andbedeemedtohavebeenrepealed,threeyearsafteritseffectivedate,unlessearlieramendedandextendedbytheCouncilbyordinance.SECTIONHISTORYArticleandSectionAddedbyOrd.No.179,545,Eff.3-16-08.

Sec. 22.815. Checking Accounts.TheCityTreasurerisherebyauthorizedtoestablishcheckingaccountsfortheNeighborhoodCouncilsundertheCity’sex-istingbankingcontract.NeighborhoodCouncilsshalldeposittheirdonatedfundsintotheTrustFundasstatedinSection5.485ofthisCodeorasauthorizedbytheCityTreasurerunderthissection.Non-donatedfunds,includingfundsfromtheCity’sgeneralfund,shallbedepositedintotheTrustFundinaccordancewithSection5.485ofthisCode.ThecheckingaccountestablishedbytheCityTreasurerforthebenefitofaNeighborhoodCouncilshalllisttheDepartmentofNeighborhoodEmpowermentasajointsignatoryonthecheckingaccountandshallgrantaccessforreviewoftheaccounttotheDepartment,TreasurerandController.InnoeventshallthemoniesinthecheckingaccountofaNeighborhoodCoun-cilexceedthevalueof$50,000.AnydepositthatwouldcausetheNeighborhoodCouncil’scheckingaccounttoexceedthesumof$50,000mustbedepositedintotheTrustFundinaccordancewithSection5.485ofthisCode.MoniesinthecheckingaccountshallnotreverttotheReserveFundoftheCityattheendofthefiscalyear.AllexpendituresbytheNeighborhoodCouncilsfromthecheckingaccountshallbemadebyanegotiablewritteninstrumentandshallbearthesignaturesoftheNeighborhoodCouncil’sTreasurerandthePresidentorVice-President.NeighborhoodCouncilsshallnotwithdrawcashfromthecheckingaccount.AllexpendituresfromthecheckingaccountshallbeforthepurposesstatedinSection22.814(h)ofthisCode.IntheeventthatanyNeighborhoodCouncilisdecertified,abandoned,orotherwiseceasestoexist,anyandallaccountsorfundsthatrelatetothatNeighborhoodCouncilshallbeturnedoverordistributedtotheDepartment,whichshallhavetheauthoritytoexpendthefundsasstatedinSection5.485(b)ofthisCode.Theprovisionsofthissectionshallexpire,andbedeemedtohavebeenrepealed,threeyearsafteritseffectivedate,unlessearlieramendedandextendedbytheCouncilbyordinance.SECTIONHISTORYArticleandSectionAddedbyOrd.No.179,545,Eff.3-16-08.

/1 - /!){}.-{)1(,(,( 7i /1-&6~tJ 0158' MOTION 8UC)(~ET& '-INl\l'tf.:;E S'2-\J\\

M¥- \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 Council's 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.DONE's 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 in

Agenda Item 10d

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 from'the 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 District

Seconded by:

BOARD OF NEIGHBORHOODCOMMISSIONERS

CIIT OF LOS ANGELESCALIFORNIA DEPARTMENT OF

NEIGHBORHOOD EMPOWERMENT

DANIEL GATICAPRESIDENT

334·6 EAST SECOND STREETLOS ANGELES, CA 90012

CARLENE DAVISVICE PRESIDENT

TELEPHONE: (213) 485-1360TOLL-FREE: 3·'"

FAX: (213) 4854608E·MAIL: done@lacity.org

LINDA LUCKSKAREN MACK

PAUL PARKLEONARD SHAFFER

BONGHWAN (BH) KIM, MPAGENERAL MANAGER

www.EmpoworLA,org

JANET LINDOEJ(cctlllvo Admlnlstfotivo A5~lslam

TELEPHONE: (213) 485--1360

ANTONIO R. VILLARAIGOSAMAYOR

November 22, 2011

Council File No. 11-1020

Honorable Members of theLos Angeles City CouncilRoom 395, City Hall200 North Spring StreetLos Angeles, California 90012

REPORT RE: NEIGHBORHOOD COUNCIL SYSTEM FUNDING PROGRAM

Honorable 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 roll

over funds from year to year, on a project-by-project basis• Neighborhood Council purchases of equipment for City and Proprietary

Departments in fiscal year 2010-2011

At 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.

Background

On 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

Honorable Members of theLos Angeles City CouncilNovember 22, 2011Page 2 of 5

Collaboration Process for Feedback

The 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 1

The 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.

Status

On 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 Department's 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 Department's 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.

Honorable Members of theLos Angeles City CouncilNovember 22, 2011Page 3 of 5

Discussions 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 Department's 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 City's 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 2

The 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.

Status

Discussions 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 City's funds.

Honorable Members of theLos Angeles City CouncilNovember 22, 2011Page 4 of 5

In 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 3

The 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.

Status

The 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 4

The Department was directed to report back on equipment purchases made byNeighborhood Councils in fiscal year 2010-11 for city and proprietary departments, and

Honorable Members of theLos Angeles City CouncilNovember 22, 2011Page 5 of 5

on any guidelines that can be implemented to maximize the benefit of said purchases tothe corresponding department and the Neighborhood Council.

Status

The 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.

Conclusion

The 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 Manager

Attachment

SOUTH LOS ANGELES ALLIANCE OF NEIGHBORHOOD COUNCILS

DRAFT NEIGHBORHOOD COUNCIL RESOLUTION

Whereas 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 DONE'sworkload 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 ensure

capacity 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.

SLAANCRecommendations for NC ReformPage2

4. Robert's Rulesof Order can be cumbersome, inefficient and create unnecessary barriers. The city shouldtake the appropriate steps to allow Neighborhood Councils to authorize Neighborhood Councils to adoptand utilize Rosenberg Rulesof 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 and

redistribute 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 city's 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 as analternative 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 loss of 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 for

SLAANCRecommendations for NCReformPage3

funding 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 less than 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 and

unnecessary 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 one

citywide 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 consolidated

grievance/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 meetings

and make available upon request.• The NCshould have the opportunity to address each and every complaint as a first step within

a specified time period.• The action taken by the NCmust be reported to DONEand in turn with the City Attorney to

ensure the response by the board was appropriate.• Should the City Attorney or personts] filing the grievance determine the NCaction was not

satisfactory; the matter should then be referred to a committee of the BONCfor resolution.

File No. 11-1020 TO THE COUNCIL OF THE CITY OF LOS ANGELES Your ARTS, PARKS, AND NEIGHBORHOODS Committee reports as follows: ARTS, PARKS, AND NEIGHBORHOODS COMMITTEE REPORT relative to the Neighborhood Council 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. SUMMARY On November 30, 2011 your Committee considered a November 22, 2011 DONE report relative to 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 policy

b. Alternative funding models for Neighborhood Councils

c. Developing a mechanism by which Neighborhood Councils may request to roll over funds from year to year, on a project-by-project basis.

d. Neighborhood Council purchases of equipment for City and Proprietary

Departments 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 Neighborhood Councils to rollover funds (Council File No. 09-0600-S159), then eliminated the rollover policy for FY 2010-11 funds. Consequently, DONE encumbered funds for each Neighborhood Council based 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 a number 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 a Neighborhood Council by the April 15th deadline and/or operational costs, such as services provided by DONE's contracted vendors, utility bills and month-to-month office and meeting space expenses. DONE will be developing clearer guidelines and advance notice of deadlines to encumber funds as long as required conditions are met. DONE considers these concerns valid and has committed to providing greater notice and reviewing the deadlines for submission of funding requests. DONE proposes to provide notice on the deadlines in January and accepting Neighborhood Councils' requests for demand

Page 2 of 3

warrants until June 1st. The June 1st deadline is contingent on DONE's ability to implement an electronic platform for receipt of requests. Next, in regard to alternative funding models for Neighborhood Councils, DONE stated that discussions in regard to this issue have focused exclusively on a grant-based funding system with DONE presenting a scenario in which funds could be allocated on a citywide or regional basis with Neighborhood Councils applying for funds for specific projects or programs. A certain amount would be provided up front for operational expenses, perhaps 20%, while the rest of the funding would be grant based. A panel comprised of City staff and Neighborhood Council representatives can review each proposal and make the funding determination based on agreed upon standards. This process would require strategic planning on the part of Neighborhood Councils 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 that Board members were adamantly opposed to changing the current funding system. The main concern voiced was the feeling that the decision-making process would be removed from the Neighborhood Council to the City if a grant based funding process was implemented. There were also concerns raised about the ability of certain Neighborhood Councils to produce better written proposals and possibly leaving out those who may not have the skills or the time. Many stated that a grant system was too complex and time consuming for Neighborhood Council volunteers 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 funds from one year to the next for approved projects, DONE stated it proposes to establish a Neighborhood Improvement Project budget, similar to the Capital Improvement Project budget that allows allocated funds to roll over from year to year. This provides an option for Neighborhood Councils that wish to implement neighborhood improvement projects that may take a significant amount of time and money to implement. Work group participants did not agree on whether projects should be tangible or intangible, or whether they should be limited to capital 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 the turnover of Board members, while others argued that such a short time limit negates a rollover project. Stipulating that the funds can only be used for the intended project or be swept by the City would encourage the completion of the project by incoming Board members. The feeling was also expressed that capital projects should be undertaken by the City and that Neighborhood Councils should advocate for priority community projects instead of using their funds. Finally, in regard to Neighborhood Council purchases of equipment for City and Proprietary Departments in FY 2010-11, DONE stated that this process has been clarified to stated that Neighborhood Councils are to request a transfer to the City Department and not buy and donate the equipment because it presents a transparency and accountability problem. There is also a concern that Neighborhood Councils are being used as an end run on the established budgets for the departments. Suggestions were made by the Neighborhood Councils about how to ensure the equipment is of benefit to the community, such as having the requesting department provide a written statement indicating the equipment is a high priority for the entire department or having each department provide a list of priority items to the Neighborhood Councils. It was also expressed that City departments should be a greater priority over schools, and some had the view that Neighborhood Councils should not give money to other City agencies since their needs were discussed and determined in the budget process.

Page 3 of 3

After further consideration and having provided an opportunity for public comment, the Committee moved to continue this matter. Subsequently, on February 1, 2012, the Committee further considered this matter and after having provided a further opportunity for public comment, the Committee moved to note and file the November 22, 2011 DONE report. This matter is now forwarded to Council for its consideration.

Respectfully submitted,

ARTS, PARKS, AND NEIGHBORHOODS COMMITTEE MEMBER VOTE KREKORIAN: YES WESSON: ABSENT REYES: YES ARL 2/2/12 11-1020_rpt_apn_2-2-12

Not Official Until Council Acts

Department of Neighborhood Empowerment, City of Los Angeles Neighborhood Council Funding Program

- 10 -

NEIGHBORHOOD COUNCIL ANNUAL BUDGET

The budget should be used as a strategic financial road map to conduct activities that will help the NC achieve its goals. It should include the input of stakeholders, be accessible and be accountable to the rules that govern the usage of public funds. It is also important to articulate the manner in which the Neighborhood Council’s budget reflects its intended benefit to the community. A good budget outlines in reasonable detail: 1) operating expenses; 2) outreach activities; 3) neighborhood improvements and/or beautification projects; and 4) Neighborhood Purposes Grants.

The NC budget must be provided in the standardized format using the template provided on the Department’s website. The different types of expenses are categorized and coded as listed below (a sample budget is provided on page 12): 100 OPERATIONS:These are NC operation expenses and include payments for translation and transcription, rent and maintenance related to facilities, space and storage rentals, supplies and copying for board meetings and committee meetings, staffing and temporary help, postage, mail service, business cards and letterhead, board retreats and training, and other expenses deemed necessary by the NC board.

AUD Audio and Visual Services EDU Training and Board Retreat FAC Facilities Related and Space Rental MIS Miscellaneous Expense OFF Office Equipment and Supplies POS Postage TAC Temporary Staff TRL Translation and Transcription

200 OUTREACH:Outreach expenses include, but are not limited to, hosting and maintaining the NC website, newsletters, banners and advertising, stakeholder outreach events, elections, postage and mailings related to outreach efforts, and other general outreach expenditures as approved by the 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 board and reflected in the minutes.

ADV Advertising ELE Election Outreach Expense EVE Event Expense / Food & Refreshments MEE Meeting Expense NEW Newsletter Expense WEB Website Maintenance/Enhancement/Creation

Department of Neighborhood Empowerment, City of Los Angeles Neighborhood Council Funding Program

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300 COMMUNITY IMPROVEMENT PROJECTS:Community Improvement Projects include costs associated with beautification projects such as tree plantings, graffiti abatement, sidewalk washing, median maintenance; and capital improvements to City owned facilities such as recreation centers, fire stations, police stations and parks.

CIP Community Improvement Projects

400 NEIGHBORHOOD PURPOSES GRANTS:Public schools and 501(c)3 non-profit organizations are eligible to receive grants from NCs through the Neighborhood Purposes Grants program. Agencies receiving a grant must provide a benefit to the community with the grant funds, be approved by the NC Board and reflected in the agenda and minutes. For expediency, the NC may submit a board resolution.

GRT Neighborhood Purpose Grant

ELECTRONIC BUDGET TEMPLATE

Neighborhood Councils are required to submit a board approved budget at the beginning of each fiscal year. The budget must be submitted to the Department using the electronic budget template found on the DONE website, by the Treasurer. This must be done by the established deadline, in order to access the NC’s funds.

The electronic budget template provides the budget categories that NC are to use, with the approved line item codes. It is set up to add and indicate the percentage of the total NC budget that is allocated under each category. The great majority of a NC’s budget should be expended on activities and products that benefit the community. As such, it is recommended that 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 NC budget, the Treasurer must submit the budget along with a Board Resolution or the meeting agenda 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. The numbers 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. .

Department of Neighborhood Empowerment, City of Los Angeles Neighborhood Council Funding Program

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ACCEPTABLE PURCHASES LIST

Below is a list of acceptable P-Card purchase categories. As with all things, this list will change as Neighborhood Council needs change. A Neighborhood Council must request authorization from 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 the social capital of the Neighborhood Council to benefit the community. If you have any questions regarding any of the items on the list, please contact the Neighborhood Council Funding Helpline at (213) 978-1551 or email done.funding@lacity.org

ACCEPTABLE 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 Rental

COMMUNICATIONS SERVICES • Telecommunication Equipment • Telecommunication Service PROFESSIONAL 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 Shops

RETAIL 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 Clubs

TRANSPORTATION SERVICES • Charter Bus Service*• Courier Services• Freight Forwarders• Truck and Utility Trailer Rental*

*Requires advance approval

Department of Neighborhood Empowerment, City of Los Angeles Neighborhood Council Funding Program

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UNACCEPTABLE PURCHASES

Below are transaction guidelines for the use of Neighborhood Council funds. Please contact the Neighborhood Council Funding Helpline at (213) 978-1551 or email done.funding@lacity.org in the event you are unsure of the proper transaction method for any expenditure.

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 personal services agreement executed by the Department. Treasurers should consult with the Department prior to using the P-card for this purpose.

3. Split charges - using multiple transactions for a single charge to circumvent the maximum single transaction amount allowed on the P-card.

4. Donations of money or goods to individuals or groups. State law prohibits public funds from being given as a gift.

5. Items or services from an entity that did not participate in a fair and open selection process.

6. Any purchases and/or capital improvement projects that increase the value of private property or do not benefit the general public.

7. Events or projects that do not have the required insurance and permits. Liability is always an important consideration with any project. Please contact the Department for further information.

8. Third-party reimbursement. Payments should be in the form of a DW for a particular vendor, 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 funds cannot 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 debates unless following City Attorney guidelines.

13. Lawsuits against the City or City agencies, and appeals against any discretionary decisions made by any City agency.