Department of Neighborhood Empowerment news

August 20 , 2002

Re: Neighborhood Council Funding Program

As promised, we have attached a copy of the Neighborhood Council Funding that you helped design. We're trying to confirm whether or not it will be heard by the Budget and Finance Committee on September 4. We'll tell you as soon as we know.

CITY OF LOS ANGELES
BOARD OF NEIGHBORHOOD COMMISSIONERS

August 2, 2002

Honorable James K. Hahn
Mayor of the City of Los Angeles
200 North Spring Street
Room 303, City Hall
Los Angeles, CA 90012

At their meeting of July 25, 2002, the Board of Neighborhood Commissioners unanimously adopted the attached report that creates a Neighborhood Council Funding Program.

On July 31, the City Controller's office expressed concerns about certain aspects of the program. Following a meeting the General Manager of the Department of Neighborhood Empowerment, and representatives of the City Controller, CAO, and City Attorney, the General Manager recommends the following amendments and clarifications to that part of the report that describes the Proposed Neighborhood Council Funding Program:

1. Item 4 states that "Up to $50,000 a year will be available." The City Controller recommended that it be clear that this is per fiscal year.

2. Item 6 requires that a minimum amount of funds be spent by the Neighborhood Councils on neighborhood improvement projects. When the report was prepared, it was believed that the ordinance required that some amount of the funds would have to be spent on neighborhood improvement projects. The plan approved by the Board of Commissioners recommends an amendment to the ordinance that would allow the Neighborhood Council to spend all or none of their funds on operating expenses or projects. Following approval of the report, the Office of the City Attorney has advised that Item 6 could be eliminated, but that the City Council should, however, pursue an amendment to the ordinance to clarify the fact that the City does not want to require Neighborhood Councils to spend any money on neighborhood improvement projects, as long as the money is available for them to use for projects.

3. Item 8 states that money for operating expenses will be transferred from the City Controller to DONE, and then to the Neighborhood Council. In fact, the process works faster than that. The money will already be in a DONE account, and DONE staff will use the City's financial system to generate a check that will be mailed from the City Controller to the Neighborhood Council.

4. Although not clearly mentioned in the proposed plan, the first allotment of money for operating expenses could be made as soon as the Neighborhood Council requests it, and thereafter replenishment requests would be made each quarter.

5. Item 11 explains the process through which a Neighborhood Council would request money for neighborhood improvement projects. As recommended by the City Controller, DONE will develop a pro forma agreement, with the assistance of the Office of the City Attorney, that spells out the obligations of the contractor and the City, including a clear statement of work, costs and fees, deposits or advances, progress payments, etc. If the Neighborhood Council is in agreement that the contractor has met their obligations, the Controller will send payment to the contractor.

6. Recommendation #3 in the report recommended that the Department receive employment authority for three additional positions that would be required to administer the Neighborhood Council Funding Program. Funding for the positions would be from funds in the Unappropriated Balance that are earmarked for use by DONE for unanticipated expenses. Following discussions and recommendations from the City Controller's office, the General Manager recommends that Recommendation #3 be amended to provide the following six positions:

7. The General Manager recommends that Recommendation #4a be amended to change the amount to be transferred to fund these six positions from $173,158 to $305,162.

8. The Discussion section of the report explained the duties of the additional employees. That should be amended to read: The six positions requested include accounting, clerical support, and administrative oversight components. The accounting component will be responsible for logging, tracking, verifying, auditing and preparing reports regarding all fiscal activities associated with the funding program including operational funding, improvement project funding, and monitoring the accounting and use of non-city sources of funds acquired by the Neighborhood Councils. The administrative component will be responsible for overall program development, coordination, and management, including fiscal training and development for Neighborhood Councils related to sourcing, applying for, and leveraging all non-city grant funds. Administrative duties will also include contract preparation and administration for an unknown quantity and variety of projects, agreements, and amounts of funding. The clerical component will be responsible for correspondence, filing, and serving as specific liaison between the Department's field staff, other related personnel and the Neighborhood Councils in all clerical matters associated with the program. Submitted by, Greg Nelson General Manager Department of Neighborhood Empowerment

Submitted by,

Greg Nelson
General Manager
Department of Neighborhood Empowerment

SUMMARY:

The Department of Neighborhood Empowerment (DONE) was established by the City Charter to create a citywide system of neighborhood councils. The ordinance that enacted the Plan for a Citywide System of Neighborhood Councils ("Plan") requires that:

(1) money be appropriated for costs related to the functions, operations, and duties of being a certified Neighborhood Council, and

(2) grant money be appropriated to the certified Neighborhood Councils for neighborhood improvement projects.

Very importantly, the Plan expects that certified Neighborhood Councils ("Neighborhood Councils") be "as independent, self-governing, and self-directed as possible."

There is $3 million earmarked in the General City Purposes Budget to help fund the Neighborhood Councils. These funds can only be made available to the Neighborhood Councils after:

(1) a Neighborhood Council funding program has been approved by the Board of Neighborhood Commissioners, the City Council, and the Mayor,

(2) the Neighborhood Councils have elections that produce Treasurers who would be responsible for the funds, and

(3) the Neighborhood Councils decide what they want to do with the funds.

The fiscal year (FY) 2001-02 Adopted Budget restricted the use of grant funds to neighborhood improvement projects, except if the Neighborhood Council is in an area of low civic participation (not defined), and then grant funds could also be used for staffing costs. Since a funding program had not been approved at time the FY 2002-03 budget was being prepared, the Adopted Budget includes the same restriction.

DONE feels strongly that the grant funds provided to the Neighborhood Councils should NOT be restricted to being used solely for neighborhood improvement projects, but should also be available to Neighborhood Councils for operating expenses. This report recommends that following adoption of these recommendations, the City Council and Mayor be urged to amend Section 7 of Ordinance #174,006, to give Neighborhood Councils the flexibility to use Neighborhood Council Funding Program money for operating expenses or for neighborhood improvement projects in any amounts they determine. Simply stated, there would be no requirement that money must be spent for neighborhood improvement projects. Approval and implementation of this program should be separate from process that would amend the ordinance.

The FY 2001-02 Adopted Budget presumed that the grant program would be administered by the Department of Public Works which would follow the guidelines prepared by DONE. The FY 2002-03 Adopted Budget recommends that the program be administered by DONE, but provides no additional positions to do so. This report recommends that three new positions be funded using $173,158 from the $500,000 earmarked in the FY 2002-03 Adopted Budget for use by DONE for unanticipated expenses.

Neighborhood Councils would be accountable for the use of their operating funds in a manner that is similar to that of existing City programs. The goal is to establish a program through which the Neighborhood Councils will be empowered to use its funds as it deems necessary; that doesn't overwhelm the newest members of our city family with unnecessary paperwork and red tape; and which provides proven levels of accountability for use of the taxpayers' money.

RECOMMENDATIONS:

That the City Council, subject to the approval of the Mayor:

1. APPROVE the Neighborhood Council Funding Program policies and procedures. (See Discussion for program details.)

2. TRANSFER $3,000,000 from the General City Purposes Budget, Certified Neighborhood Councils Grant Program to the Department of Neighborhood Empowerment Special Fund 44B, Account T218, Neighborhood Council Funding Program.

3. RESOLVE that Employment Authority for the following three positions in the Department of Neighborhood Empowerment, Grants Processing Section, subject to approval of the Personnel Department for proper classification and the Employee Relations Division of the City Administrative Officer for pay grade determination, is APPROVED, and exempt these positions from the current hiring freeze:

4. REQUEST the City Controller to:

a. TRANSFER $173,158 from the Unappropriated Balance ("Unanticipated Expenses" found on page 330 of the "Detail of Department Programs") to the Department of Neighborhood Empowerment Fund 100, Department 47, Account 1010, Salaries General, in order to fund the required positions described in Recommendation 3 of this report, for administration of the Neighborhood Council Funding Program; and

b. TRANSFER $3,000,000 from the General City Purposes Budget (Page 682 of the "Detail of Department Programs") to the Unappropriated Balance, and APPROPRIATE therefrom to the Department of Neighborhood Empowerment Special Fund 44B, Account T218, entitled "Neighborhood Council Funding Program."

5. REQUEST the General Manager of the Department of Neighborhood Empowerment to prepare instructions for the City Controller for any necessary technical program adjustments, subject to approval of the CAO, and AUTHORIZE the City Controller to implement the instructions.

6. REQUEST the City Council to instruct the City Attorney to draft an amendment, within 30 days, to Section 7 of Ordinance #174,006 to give Neighborhood Councils the flexibility to use Neighborhood Council Funding Program money for operating expenses or for neighborhood improvement projects in any amounts they determine, thereby eliminating the requirement in the Adopted Budget that money can only be spent for neighborhood improvement projects, except in areas of low civic participation.

FISCAL IMPACT STATEMENT:

There would be no impact on the General Fund because the recommendations are for transfers of funds to the Department of Neighborhood Empowerment from the Inappropriate Balance or the General City Purposes Budget.

DISCUSSION:

Existing Rules and Laws:

The Department of Neighborhood Empowerment (DONE) was established by the City Charter to create a citywide system of neighborhood councils. The ordinance that enacted the Plan for a Citywide System of Neighborhood Councils (#174006) requires that:

1. Money is appropriated for costs related to the functions, operations, and duties of being Neighborhood Council. The functions, operations, and duties of a Neighborhood Council include, but are not limited to, meeting and office space, office equipment, computers, supplies, and communications, such as the costs associated with newsletters, postage, or printing written materials.

2. Grant money is appropriated to the Neighborhood Councils for neighborhood improvement projects. The process calls for Neighborhood Councils to apply to DO and be awarded grants.

3. Each Neighborhood Council shall include an officer named "Treasurer" among its governing board.

The City Charter requires that Neighborhood Councils communicate regularly with ALL of its stakeholders, but no adequate source of funds is earmarked for the neighborhood councils to use.

The Plan for a Citywide System of Neighborhood Councils ("Plan") expects that Neighborhood Councils be "as independent, self-governing, and self-directed as possible."

The Plan also sets goals and objectives for the citywide system that include promoting and facilitating communication, interaction, and opportunities for collaboration among all Neighborhood Councils regarding their common and disparate concerns.

The FY 2001-02 Adopted Budget restricts the use of the money set aside for use by the neighborhood councils to neighborhood improvement projects, except if it's an area of low civic participation (not defined), and then where it could also be used for staffing costs. This money cannot be released until a plan has been approved by the City Council, and the Neighborhood Council has its election through which it has a Treasurer who would be responsible for the money. The FY 2002-03 Adopted Budget includes the same restriction on the use of the funds that is in the FY 2001-02 Adopted Budget. This is because a specific plan for use of the funds had not been approved by the time the budget was prepared, so it repeated the language from the FY 2001-02 Adopted Budget.

The Proposed Neighborhood Council Funding Program:

1. The goal is to ensure that the Neighborhood Councils receive the money they need, when they need it, with the least amount of "paperwork," and with the reasonable fiscal protections that the taxpayers' expect and deserve.

2. The name of the program will be changed from the "Neighborhood Grant Program" to the "Neighborhood Council Funding Program" to reflect the broader range of choices provided to the Neighborhood Councils.

3. Eligibility will be to all Neighborhood Councils in the City of Los Angeles (i.e., groups that have been certified by the Board of Neighborhood Commissioners, and that have elected a governing board that includes a Treasurer).

4. Up to $50,000 a year will be available.

5. Establish that the money can be used for both operating expenses and neighborhood improvement projects.

6. Require that at least $12,000 or 24%, whichever is lower, must be used for neighborhood improvement projects. The remainder can be used for operating expenses or neighborhood improvement projects. The ordinance currently requires that an unspecified amount of money be spent for projects.

7. Neighborhood Councils may be asked to sign a simple letter of agreement that would ensure that they understand the responsibilities involved with handling and spending the taxpayers' money. New letters would be signed at the first meeting of each Neighborhood Council following July 1, and whenever there is change of those who are authorized to disburse money. DONE will provide a list of prohibited and permitted expenditures. The list will be created with the assistance of the Neighborhood Councils and the City Controller. Misappropriation of funds could result in denial of future funding, decertification, or possibly prosecution.

8. To receive money for operating expenses, the Neighborhood Councils will be required to submit a request through a form or e-mail to DONE, maintain copies of receipts and invoices, and send the original receipts and invoices to DONE monthly. The funds will be transferred from the City Controller to DONE, and then to the Neighborhood Council for deposit in their checking account. This will minimize the workload on the City Controller. (See Attachment 1.)

9. Money for operating expenses will be provided upon request to DONE using a form or e-mail. The initial amount will be $3,000. The request will include the Neighborhood Council's best estimate of their anticipated expenses. The General Manager of DONE can approve exceptions, such as would occur if the Neighborhood Council is planning to immediately deliver newsletters to all its stakeholders or hold a community event. Thereafter, the Neighborhood Council will submit a replenishment request, using the same form or e-mail, to DONE by the 20th of each month. Each replenishment request will provide the Neighborhood Council's best estimate of their anticipated expenses for the forthcoming month. Each request cannot exceed $3,000, but the General Manager of DONE can approve exceptions. DONE will ensure that the funds are received by the Neighborhood Councils by the 1st of the next month. Balances do not need to be at zero before the next month's funding is received. The maximum balance in the account of each Neighborhood Council on the 20th of each month should not exceed $5,000 if there are no plans to spend it. It is more beneficial to the taxpayers if unspent money is retained by the City and draws interest.

10. Neighborhood Councils would be invited use the City Print Shop, and make purchases, through DONE, using the cost advantages of city contracts if they desired.

11. To receive money for neighborhood improvement projects, a Neighborhood Council will submit a request using a form or e-mail. The original invoice from the vendor or contractor would have to be provided. DONE will review the request, and send it to the City Controller for payment. DONE will ensure that the contractor or vendor receives prompt payment. The Neighborhood Council and DONE will monitor the progress of the work as they are able. Neighborhood Councils are encouraged to assign someone to prepare their own project status reports in order to properly track the progress of their projects. (See Attachment 2.)

12. Money could be transferred to a city department for improvement projects, such as fixing a sidewalk. (See Attachment 3.)

13. The City Controller and DONE will ensure that any funds remaining unspent at the end of a year would be able to be used in the following year. The City does not want the Neighborhood Councils to feel that they must spend money needlessly at the end of the year to avoid losing it. This would not affect the ability of the Neighborhood Council to receive further funds that the City makes available to Neighborhood Councils.

14. DONE will provide monthly financial reports to the City Controller.

15. DONE will provide quarterly reports to the Board of Commissioners, the City Council, and the Mayor beginning when the first funds are transferred. The reports could include recommended changes to the program.

Use of Funds:

After much public discussion with the proposed and certified Neighborhood Councils, DONE feels strongly that the funds provided to the Neighborhood Councils should not be restricted to being used solely for neighborhood improvement projects.

Aside from the legal requirement to provide the Neighborhood Councils with operational support, it is through their operations, more so than through projects, that they will achieve empowerment. Neighborhood Councils need funds for post office boxes, Web site hosting, Internet service, computer maintenance, information booths at events, telephone bills, stipends for students, hiring their staff, printing and distributing newsletters, purchasing communications equipment, printing banners and signs, holding community events, specialized training and trainers, postage, mailing lists, child care, and refreshments for public meetings and events.

The city ordinance should be amended to allow each Neighborhood Council to determine whether it wants to spend any part of its money on neighborhood improvement projects or operating expenses. However, that can occur after this program is approved. A primarily argument for providing Neighborhood Councils with funds for operating expenses, as opposed to the City providing those needs, is that it unleashes the creativity of Neighborhood Councils to develop networking and partnership opportunities that will allow them to leverage their money.

Additional Positions for Funding Program:

The FY 2001-02 Adopted Budget presumed that the grant program would be administered by the Department of Public Works which would follow the guidelines prepared by the Department of Neighborhood Empowerment. The FY 2002-03 Adopted Budget recommends that the program be administered by DONE, but no additional positions were provided. This report recommends that three new positions be funded using $173,158 from the $500,000 earmarked in the FY 2002- 03 Adopted Budget for use by DONE for unanticipated expenses.

The Senior Management Analyst would be the primary program manager, and contract administrator for an unknown quantity and variety of projects. The analyst would maintain responsibility for the overall program development and coordination, and assist Neighborhood Councils in finding and applying for non-city grants. The Senior Accountant would monitor the use of the funding, verify all supporting documentation, and track the appropriate disbursements. The Senior Clerk Typist would provide clerical support to the Senior Management Analyst, the Senior Accountant, and the department's field staff that will be assisting the Neighborhood Councils with the Funding Program.

Accountability:

The goal is to establish a system through which the Neighborhood Councils will be empowered to use its funds as it deems necessary; that doesn't overwhelm the newest members of our city family with unnecessary paperwork and red tape; and which will provide adequate levels of accountability for use of the taxpayers' money. DONE will encourage the Neighborhood Councils to adopt work plans and budgets, and train them how to do it.

Outreach:

At some point, it is likely that a Neighborhood Council will be asked the extent to which it involved stakeholders in the process of selecting and completing a neighborhood improvement project. Such projects offer an excellent opportunity to involve the neighborhood, especially people who have never been involved before. Therefore, DONE is urging the Neighborhood Councils to include in their application a description of how the decision was made, and the extent to which it involved the stakeholders.

DONE Support:

DONE will:

1. Assist the Neighborhood Councils by aggressively trying to locate sources for free or low-cost furniture, professional services, staffing, office space, private and governmental grant funds, providing training, translation services, making its offices (currently seven) available to the Neighborhood Councils, and purchasing goods and services for them through City contracts;

2. Provide workshops or training for the Neighborhood Councils in developing budgets; prioritizing projects; applying for funding; planning, implementing, and tracking projects, etc.;

3. Assist in publicizing the projects; and

4. Collecting and sharing best practices examples.

ATTACHMENT 1 - REQUESTING MONEY FOR OPERATING EXPENSES

A request may be made using a form that will be available from DONE, or through e-mail, and shall include:

Neighborhood Council name.
Funding amount requested (up to $3,000 per each request).
Contact information.
Responsible person(s).
Check delivery instructions.
Authorized signatures to be provided with form, or to follow e-mail request.
Brief description of intended use of funds.
Deadline date, if any.

DONE will process the request, ensure that the request is proper and in accordance with the bylaws of the Neighborhood Council, and forward it to the City Controller. The Neighborhood Council will keep copies of all receipts, and send originals to DONE monthly.

ATTACHMENT 2 - REQUESTING MONEY FOR PROJECT EXPENSES

A request may be made using a form that will be available from DONE, or through e-mail, and shall include:

Neighborhood Council name.
Project name.
Clear description of the project.
Location of project.
Name of property owner.
Is permission to enter needed?
Cost of project.
Attach itemized original invoice.
Phone quotations are acceptable for single purchases under $100.
Contact information.
Responsible person(s).
Authorized signatures to be provided with form, or to follow e-mail request.
Evidence of insurance, if required.
Compliance with regulations of the city's Risk Manager.
Have appropriate permits and permission been obtained?
Is the project accessible to the public?
Estimated completion date.
Milestones or stages, so that the Neighborhood Council and the City can monitor progress.
Describe the intended benefits to the community.
Partnerships, in any, that will be used to involve stakeholders.
Documentation of how the decision was reached, such as meeting minutes.

Expenses may include, but not be limited to: community outreach, staffing, training, licensed professional services, shipping and delivery, short-term rental of equipment, materials and supplies, printing, and design and planning.

DONE will process the request, ensure that the request is proper and in accordance with the bylaws of the Neighborhood Council and city policies, ensure that it doesn't duplicate an existing public or private program, assess the level of readiness of the Neighborhood Council to do the project, and forward it to the City Controller for payment.

ATTACHMENT 3 - REQUESTING MONEY FOR CITY DEPARTMENT OR A CITY-RUN PROGRAM

A request may be made using a form that will be available from DONE, or through e-mail, and shall include:

Neighborhood Council name.
Project name.
Description of program or project.
City department that will receive the funds.
Funding amount requested.
Contact information.
Responsible person(s).
Authorized signatures to be provided with form, or to follow e-mail request.
Anticipated completion date.

DONE will process the request, identify the proper destination account, ensure that the request is proper and in accord with the bylaws of the Neighborhood Council, and forward it to the City Controller for the transfer of funds.

Greg Nelson

213 / 485-1360
213 / 485-4608 fax
E-mail: gnelson@mailbox.lacity.org