NC Plan Session IV Worksheet

Neighborhood Council Plan Review and Reform Initiative
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Session IV Worksheet:
Neighborhood Council Funding, Grants and Donations
• Should the annual allocation system providing an equal amount of money to each neighborhood council,
regardless of population, be maintained?
• If not, should a system allocating funding based on population be instituted?
• Should a hybrid system allocating some funding equally and some on a per capita basis be considered?
• Should regulations be established to allow neighborhood councils to seek grants, donations, or other sources
of income independent of municipal funds?
• Should neighborhood councils be required to spend certain percentages for certain categories which are
aligned with the mission of the neighborhood council program, e.g., 25 percent of budget for outreach?
• Should neighborhood councils be allowed to provide funds to other city departments?
— LOS ANGELES CITY CHARTER ARTICLE IX —
Sec. 911. Appropriation.
The Mayor and Council shall appropriate funds for the Department of Neighborhood Empowerment and for the startup and
functioning of neighborhood councils for the first two years after the effective date of this Article. Funds shall be appropri-
ated into a special fund to be established by ordinance. The Mayor and Council shall thereafter appropriate funds for the
department and neighborhood councils at least one year in advance of each subsequent fiscal year.
— LOS ANGELES ADMINISTRATIVE CODE CHAPTER 28 —
Sec. 22.810.1. Regulations Implementing the Plan for a Citywide System of Neighborhood Councils (Plan).
(g) Funding.
(1) Money appropriated in the budget each year for certified Neighborhood Councils for costs related to the functions,
operations, and duties of being a certified Neighborhood Council shall be placed in the Department of Neighborhood Em-
powerment Fund. The functions, operations, and duties of a certified Neighborhood Council include, but are not limited
to, meeting and office space, office equipment, computers, supplies, and communications, such as the costs associated with
newsletters, postage, or printing written materials. At the discretion of each Neighborhood Council, and as approved by
the Department of Neighborhood Empowerment, all or part of the money so appropriated may be used for neighborhood
improvement projects.
(2) Any money which the Mayor and Council appropriate as grant funds each fiscal year for certified Neighborhood Coun-
cils shall be available for various neighborhood improvement projects. In order to be eligible for grant money, a certified
Neighborhood Council shall submit an application to the Department and may be awarded grants, pursuant to the provi-
sions as set forth in Article IX Section 2 of the Plan.
The following sections are no longer in effect as a result of three-year “sunset” clauses. They are included for informational
purposes only.
Sec. 22.801.1. Acceptance of Donations and Gifts by the Department.
A Neighborhood Council may accept gifts as described in Section 22.814 of this Code or request that the Department or City
Council accept the gift on its behalf. The Department, under the limited circumstances set forth below, shall have the power
and authority to accept gifts on behalf of the City of Los Angeles that relate to the Department’s programs and activities, that
relate to any or all of the Neighborhood Councils, or that relate to the Citywide system of Neighborhood Councils.
If the Department is acting to accept a gift as authorized under this section, then the General Manager of the Department,
or the General Manager’s designee, shall be the agent authorized to accept gifts.
Gifts may include any item, monetary or non-monetary, tangible or intangible, that is contributed, provided, given, trans-
ferred, donated, bequeathed or devised to the City. The authority to accept gifts includes the authority to reject or rescind the
acceptance of any gift at any time. Nothing in this section requires the acceptance or retention of any gift.
(a) Limitations on Acceptance of Gifts. With the exception of a gift that is a leasehold interest for office, storage or meeting

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space, as further described in Subsection (b) below, no gift may be accepted by the Department that exceeds the value of
$10,000 and any gift in excess of this amount shall be submitted to City Council for acceptance or rejection.
(b) Donated Office Space or Meeting Space. The Neighborhood Councils shall not have any authority to accept any interest
in real property, including any fee simple interest or any leasehold interest. However, a Neighborhood Council may request
that the Department, which is hereby granted the authority, accept a lease on its behalf as long as the gift is a leasehold inter-
est for office, storage, or meeting space, the lease does not exceed a one-year term, and the leasehold interest is valued less
than $20,000 per year or $1,666.66 per month. If the value for that leasehold gift exceeds these allowable monetary threshold
values or the allowable leasehold term, then the leasehold gift must be submitted to City Council for acceptance or rejection.
(c) Assessment of Value. For the purposes of determining the value of any gift accepted by the Department, or when the
Department is requested to accept a gift by any Neighborhood Council, including determining whether the gift is valued in
excess of the monetary threshold value that requires the gift to be submitted to City Council, then the value of the gift shall
be calculated as follows:
(1) If the gift is monetary in nature, then the value is measured in United States dollars.
(2) The value of all non-monetary gifts is determined in the sole discretion of the General Manager, or the General Manager’s
designee, based on his or her determination of the fair-market value of the gift.
(d) Donor Disclosure Form. No gift valued at more than $500 shall be accepted by the Department or the Neighborhood
Councils unless the person or entity that is the source of the gift completes the Department’s approved donor disclosure form.
The requirement for completing a donor disclosure form shall not be avoided by donating successive or incremental gifts
during a single calendar year, where the successive or incremental gifts would be independently valued at less than $500,
but the accumulated value of the gifts over the course of that calendar year exceeds the value of $500. If any person gives
or donates an accumulation of gifts within the same calendar year that total in value more than $500, then the donor must
complete the donor disclosure form for each gift that exceeds this allowable accumulated total.
The donor disclosure form shall be dated and completed with information from the donor that includes and memorializes
the following information required by State law:
(1) That the Department or the Neighborhood Council, whichever is applicable, shall receive and control the gift;
(2) That the gift shall be used solely for official business related to the Neighborhood Council system;
(3) Whether the gift contains any restrictions, limitations or conditions, so long as the donor does not designate the gift
for any specific person(s). The donor shall state and list the names of persons or the category of persons using the gift, e.g.,
the board of the Neighborhood Council, the executive committee of the Neighborhood Council, or the stakeholders of the
Neighborhood Council. However, the Department, or the Neighborhood Council if the Neighborhood Council controls the
gift, shall determine in its sole discretion the specific person(s) who may use the gift; and
(4) States the donor’s name or identifying information, address, a description of the gift, and the fair-market value or an es-
timate of the fair-market value for the gift.
In addition, the donor disclosure form shall contain an area for the entry of information by the Department or the Neighbor-
hood Council that describes the official use for the gift.
The donor disclosure form shall also require the donor to disclose any contract, license, permit or project that the donor is
currently seeking, intends to seek, or sought in the past six months from the City.
The donor disclosure form shall be filed with the Department within 30 days of the receipt of the gift.
(e) Post Acceptance Handling of Gifts. Monetary gifts accepted by the Department shall be deposited into the Neighborhood
Empowerment Trust Fund (Trust Fund) in accordance with Section 5.485 of this Code. If the Department accepts an uncon-
ditional monetary gift on behalf of a Neighborhood Council, then the Department shall deposit 10% of the amount of the
gift into a special account for disbursement to Neighborhood Councils in economically disadvantaged areas consistent with
Section 5.485(d) of this Code. The Department shall accept non-monetary gifts by delivery, receipt of physical possession, or
other method of transfer of title or possession as is required by law. The Department shall track physical inventory donated
to the Neighborhood Council system by maintaining any necessary perpetual stock records of furniture or equipment, as
required under Sections 7.79 and 7.84 of this Code. The Department will enter all monetary gifts pertaining to the Neigh-
borhood Council system into the City’s Financial Management Information System (FMIS) and will enter all non-monetary
gifts pertaining to the Neighborhood Council system and valued above $5,000 into the Citywide Inventory System (CWIS).
Items valued above $5,000 will be assigned an inventory control number and an inventory tag will be provided to the Neigh-
borhood Council by the Department for those items. The Department shall insure that all gifts accepted for the benefit of
the Neighborhood Council system are appropriately registered or recorded in accordance with the provisions in this section.
(f) Restricted Gifts. The Department shall comply with any special terms, conditions or restrictions on any gift. In addition,

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if any monetary gift that is accepted by the Department contains terms, conditions or restrictions, then the monies shall be
deposited in an appropriate account in the Trust Fund in accordance with Section 5.485 of this Code. The Department shall
notify the City Controller of any special terms, conditions or restrictions placed on the use of those monies.
(g) Expenditure of Monies. The Department is authorized to expend monies from the Trust Fund, including expenditures
from any account or sub-account in the Trust Fund, either on behalf of the Department or on behalf of any or all of the
certified Neighborhood Councils, and may expend funds for the purchase of equipment, services or furnishings in sup-
port of the established programs and activities of the Department or the Neighborhood Councils, or in furtherance of the
purposes or goals of the Citywide system of Neighborhood Councils, as stated in the City Charter, the Plan, and the Regula-
tions implementing the Plan, subject to any special terms, conditions or restrictions attached to the gift. Monies may also be
expended on neighborhood improvement projects that have been approved under the administrative processes established
by the Department. Prior to the expenditure of any monies in any account or sub-account that was established because a gift
contained a special term, condition or restriction, the Department shall provide the Controller with written documentation
to demonstrate that any expenditure complies with the special term, condition or restriction.
(h) Record-Keeping. The Department shall prepare a periodic written report that contains information covering all gifts ac-
cepted in the preceding six-month period of time, commencing on April 1st and October 1st of each year, and this report
shall be submitted to City Council with copies to the Controller and the Board of Neighborhood Commissioners within 30
days after the close of the six-month period. This report to City Council shall include the following information:
(1) An accounting of the Trust Fund and the Neighborhood Council checking accounts, including a balance statement, a list
of deposits, identification of the name of the donor that is the source of the donated monies, the date of the deposit, a list of
all expenditures, including the payee, the amount paid, the date, and the purpose of each expenditure.
(2) A summary of the donor disclosure forms that have been filed with the Department that lists the gifts that have been ac-
cepted by the City through the Department and/or Neighborhood Councils. This summary shall state the donor’s name, a
brief description of the gift, the date of the gift’s acceptance, and the gift’s value. Copies of the relevant donor disclosure forms
that have been referenced in the summary shall be affixed to the summary.
(3) For those accepted gifts in which a donor disclosure was not submitted, the Department shall provide the following in-
formation:
(i) That the Department or the Neighborhood Council, whichever is applicable, shall receive and control the gift.
(ii) That the gift shall be used solely for official business related to the Neighborhood Council system.
(iii) Whether the gift contains any restrictions, limitations or conditions. The Department shall also state and list the names
of persons or the category of persons using the gift, e.g., the Department or the specific Neighborhood Council.
(iv) The donor’s name or identifying information, address, a description of the gift, and the fair-market value or an estimate
of the fair-market value for the gift.
(4) A list of any donated leasehold interest in office, storage, or meeting space that is occupied by a Neighborhood Council,
including the location of the space, the Neighborhood Council occupying the space, the donor’s name, the value of the lease-
hold interest, the leasehold term, and any limits, restrictions, or conditions upon which the donation is based.
(i) Prohibited Gifts. No gift shall be accepted by the Department that:
(1) Involves or relates to providing childcare services.
(2) Is a gift from a foreign or domestic government entity, excluding grants or grant funding related to the Citywide System
of Neighborhood Councils.
(3) Involves a fee interest in real property, or any partial or full ownership interest in real property, except that a leasehold or
possessory interest for office, storage or meeting space as described in Subsection (b), above, is allowed.
(4) Requires ongoing maintenance or costs that will be expended by the City for upkeep in an amount exceeding $1,000
annually, such as a gift of a monument, artwork, or mural that requires ongoing and continuous expenses by the City to
maintain the gift.
(5) Includes livestock or animals, whether rare or domestic, wild or tame.
(6) Is a gift involving a motorized vehicle, automobile, aircraft or boat, or any vehicle that requires registration with the Cali-
fornia Department of Motor Vehicles.
The Board of Neighborhood Commissioners may develop further policies with respect to the specific types of gifts that may
or may not be accepted.
(j) The acceptance of any gift under this section does not warrant, guarantee, or purport to establish any benefits that may be
derived under State or Federal law. However, the Department is authorized to facilitate the attempt by any donor of a gift to
receive from the Department a written acknowledgment of the gift for tax purposes, including that the General Manager of

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the Department, or the General Manager’s designee, may provide a contemporaneous written acknowledgment, a disclosure
regarding a quid pro quo contribution, or any mandatory disclosure regarding the gift for tax related purposes.
(k) The provisions of this section shall expire, and be deemed to have been repealed, three years after its effective date, unless
earlier amended and extended by the Council by ordinance.
SECTION HISTORY
Added by Ord. No. 179,545, Eff. 3-16-08.
Sec. 22.814. Acceptance of Donations and Gifts.
A Neighborhood Council that has been certified under the Plan for a Citywide System of Neighborhood Councils (Plan) and
the Regulations Implementing the Plan (Regulations) under the limited circumstances set forth below, shall have the power
and authority to accept gifts on behalf of the City of Los Angeles that relate to that Neighborhood Council’s purposes, mis-
sions, or goals, to its programs or activities, or to the Citywide System of Neighborhood Councils if the acceptance of the gift
is consistent with the purposes and goals expressed in the City Charter, the Plan, and the Regulations.
Gifts may include any item, monetary or non-monetary, tangible or intangible, that is contributed, provided, given, trans-
ferred, donated, bequeathed or devised to the City through the Neighborhood Councils. The authority to accept any gift in-
cludes the authority to reject or rescind the acceptance of any gift at any time. Nothing in this section requires the acceptance
or retention of any gift. Nothing in this article precludes the Neighborhood Council from requesting that the City Council
or the Department make a determination regarding the acceptance of any gift.
(a) Limitations on Acceptance of Gifts. A Neighborhood Council shall only accept gifts that relate to its purpose, mission,
policies, and programs, to the Citywide system of Neighborhood Councils, consistent with the City Charter, the Plan and the
Regulations. No gift shall be accepted by any Neighborhood Council that exceeds $10,000 in value. Gifts valued in excess of
$10,000 shall be submitted to City Council for acceptance or rejection.
No gift of real property shall be accepted by the Neighborhood Council, including any gift for a fee simple estate or a lease-
hold interest in property. Gifts for a leasehold interest in real property for a term of one year or less, comprising office, stor-
age, or meeting space, may be accepted by the Department acting on behalf of the Neighborhood Council under Section
22.801.1 of this Code. The Neighborhood Council may also request that City Council accept any gift on its behalf involving
real property.
(b) Assessment of Value. For the purposes of determining the value of any gift that is accepted by a Neighborhood Council,
including whether the gift is valued in excess of the monetary threshold value that requires the gift to be submitted to City
Council, then the value of the gift shall be calculated as follows:
(1) If the gift is monetary in nature, then the value is measured in United States dollars.
(2) The value of all non-monetary gifts is determined based on an assessment of the gift’s fair market value by the governing
body of the Neighborhood Council at the public meeting where the decision is made to accept the gift.
(c) Donor Disclosure Form. No gift valued at more than $500 shall be accepted unless the person or entity that is the source
of the gift completes the Department’s approved donor disclosure form.
The requirement for completing a donor disclosure form shall not be avoided by donating successive or incremental gifts
during a single calendar year, where the successive or incremental gifts would be independently valued at less than $500,
but the accumulated value of the gifts over the course of that calendar year exceeds the value of $500. If any person gives
or donates an accumulation of gifts within the same calendar year that total in value more than $500, then the donor must
complete the donor disclosure form for each gift that exceeds this allowable accumulated total.
The donor disclosure form shall be dated and completed with information from the donor that includes and memorializes
the following information required by State law:
(1) That the Neighborhood Council shall receive and control the gift;
(2) That the gift shall be used solely for official business related to the Citywide system of Neighborhood Councils;
(3) Whether the gift contains any restrictions, limitations or conditions, so long as the donor does not designate the gift
for any specific person(s). The donor shall state and list the names of persons or the category of persons using the gift, e.g.,
the board of the Neighborhood Council, the executive committee of the Neighborhood Council, or the stakeholders of the
Neighborhood Council. However, the Neighborhood Council, in its sole discretion, shall determine the specific person(s)
who may use the gift; and
(4) States the donor’s name or identifying information, a description of the gift, and the fair-market value or an estimate of
the fair-market value for the gift.
In addition, the donor disclosure form shall contain an area for the entry of information by the Department or the Neighbor-

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hood Council that describes the official use for the gift.
The donor disclosure form shall also require the donor to disclose any contract, license, permit or project that the donor is
currently seeking, intends to seek, or sought in the past six months from the City.
The donor disclosure form shall be filed with the Department within 30 days of the receipt of the gift.
(d) Method of Acceptance. Prior to conducting any public hearing to accept or reject any gift, the Neighborhood Council
must have a completed donor disclosure form if that form is required under Subsection (c) above.
The acceptance of the gift by the Neighborhood Council shall occur at a meeting that is noticed in compliance with the
Ralph M. Brown Act. The Neighborhood Council shall list on its agenda for the public meeting an item that describes the
gift, the gift source or donor, that the Neighborhood Council will make a determination regarding the gift’s value, and that
the Neighborhood Council may take possible action regarding the acceptance or rejection of that gift or refer the gift to City
Council or the Department for action.
When a gift is valued at less than $500 and the donor disclosure form is not required to be completed, the Neighborhood
Council may delegate to a member of its board the ability to accept these gifts and to determine their value. This delegation
of power to a board member shall occur at a public meeting and the board member accepting the delegation shall file, on a
monthly basis, a list containing the information specified in Subsection (i)(2), below.
(e) Accounts / Post-Acceptance of Monetary Gifts. Neighborhood Councils shall deposit monetary gifts into an appropriate
account in the “Neighborhood Empowerment Trust Fund” (Trust Fund) of the City’s Treasury in accordance with Section
5.485 of this Code or into a checking account established pursuant to Section 22.815 of this Code. The Neighborhood Coun-
cil shall deposit 10% of the value of all unconditional monetary gifts that it receives into a special account for disbursement
to Neighborhood Councils in economically disadvantaged areas consistent with Section 5.485(d) of this Code.
(f) Post-Acceptance / Non-Monetary Gifts. Neighborhood Councils are exempt from registration of all non-monetary gifts,
such as physical property items, office equipment, inventory or supplies, with the Citywide Inventory System, including the
maintenance of any necessary perpetual stock records of furniture or equipment, as required under Sections 7.79 and 7.84
of this Code. However, Neighborhood Councils shall report all monetary gifts to the Department for entry into the City’s
Financial Management Information System and shall report all non-monetary gifts valued above $5,000 to the Department.
For non-monetary gifts valued above $5,000, the Department shall provide the Neighborhood Council with an inventory
control number and an inventory tag for the gifts and the Neighborhood Council shall affix the inventory tag to the gift.
(g) Restricted Gifts. Neighborhood Councils shall ensure compliance with any special terms, conditions or restrictions at-
tached to the use of any gift. If any monetary gift contains restricted terms, the monies shall be segregated from other ac-
counts and earmarked with the required restrictions.
(h) Expenditure of Monies. Neighborhood Councils shall have the power and authority to expend funds for costs related to
the functions, operations and duties of being a certified Neighborhood Council, including, but not limited to, leasing space
for office use, meetings or storage, the purchase of office equipment, computers, supplies, or expenditures for communica-
tions, such as the costs associated with newsletters, postage or printing written materials. Neighborhood Councils may also
expend the funds on neighborhood improvement projects
as long as the appropriation of monies for neighborhood improvement projects have been approved under the adminis-
trative processes established by the Department of Neighborhood Empowerment. All Neighborhood Council requests for
expenditures from the Trust Fund shall be processed with the Controller through the General Manager of the Department,
or the General Manager’s designee. Expenditures by the Neighborhood Councils from the checking account shall be made
by a negotiable written instrument and shall bear the signatures of the Neighborhood Council’s Treasurer and the President
or Vice-President.
(i) Record-Keeping. In addition to forwarding all donor disclosure forms to the Department within 30 days of the date of the
receipt of the gift, the Neighborhood Council shall keep a written record of all accepted gifts. The record shall be submitted
to the Department on March 1st and September 1st of each year. The record shall cover the immediately preceding six-month
period of time and contain the following information:
(1) An accounting of all accepted monetary gifts, which shall state the amount of the gift, the date accepted, and the source
or donor of the gift. In addition, the report shall list all deposits and expenditures from the Trust Fund and the checking
account, including the payee, the amount paid, the date, and the purpose of the expenditure or a description of the item
purchased; and
(2) A statement that the Neighborhood Council shall receive and control the gift. A statement that the gift shall be used solely
for official business related to the Citywide system of Neighborhood Councils. Whether the gift contains any restrictions,
limitations or conditions. The names of persons or the category of persons using the gift, e.g., the board of the Neighborhood

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Council, the executive committee of the Neighborhood Council, or the stakeholders of the Neighborhood Council. The do-
nor’s name or identifying information, a description of the gift, and the fair-market value or an estimate of the fair-market
value of the gift. For those gifts that have a value or accumulated value over $500 during any calendar year, a copy of the
donor disclosure form.
(j) Prohibited Gifts. No gift shall be accepted by a Neighborhood Council that:
(1) Involves or relates to providing childcare services.
(2) Is a gift from a foreign or domestic government entity, excluding grants or grant funding related to the Citywide system
of Neighborhood Councils.
(3) Involves any ownership or possessory interest in real property, including a fee simple or leasehold interest.
(4) Requires ongoing maintenance or costs that will be expended by the City for upkeep in an amount exceeding $1,000
annually, such as a gift of a monument, artwork, or mural that requires ongoing and continuous expenses by the City to
maintain the gift.
(5) Includes livestock or animals, whether rare or domestic, wild or tame.
(6) Is a gift involving a motorized vehicle, automobile, aircraft or boat, or any vehicle that requires registration with the Cali-
fornia Department of Motor Vehicles.
The Board of Neighborhood Commissioners may develop further policies with respect to the specific types of gifts that may
or may not be accepted.
(k) The acceptance of any gift pursuant to the provisions of this article does not warrant, guarantee, or purport to establish
any benefits that may be derived under State or Federal law. However, the Neighborhood Councils are authorized to facilitate
the attempt by any donor of a gift to receive an acknowledgment of the gift for tax
purposes, including that the Treasurer of the Neighborhood Council may provide a contemporaneous written acknowledg-
ment, a disclosure regarding a quid pro quo contribution, or any mandatory disclosure regarding the gift for tax related
purposes.
(l) The provisions of this section shall expire, and be deemed to have been repealed, three years after its effective date, unless
SECTION HISTORY
Article and Section Added by Ord. No. 179,545, Eff. 3-16-08.
Sec. 22.815. Checking Accounts.
The City Treasurer is hereby authorized to establish checking accounts for the Neighborhood Councils under the City’s ex-
isting banking contract. Neighborhood Councils shall deposit their donated funds into the Trust Fund as stated in Section
5.485 of this Code or as authorized by the City Treasurer under this section. Non-donated funds, including funds from the
City’s general fund, shall be deposited into the Trust Fund in accordance with Section 5.485 of this Code.
The checking account established by the City Treasurer for the benefit of a Neighborhood Council shall list the Department
of Neighborhood Empowerment as a joint signatory on the checking account and shall grant access for review of the account
to the Department, Treasurer and Controller. In no event shall the monies in the checking account of a Neighborhood Coun-
cil exceed the value of $50,000. Any deposit that would cause the Neighborhood Council’s checking account to exceed the
sum of $50,000 must be deposited into the Trust Fund in accordance with Section 5.485 of this Code. Monies in the checking
account shall not revert to the Reserve Fund of the City at the end of the fiscal year.
All expenditures by the Neighborhood Councils from the checking account shall be made by a negotiable written instrument
and shall bear the signatures of the Neighborhood Council’s Treasurer and the President or Vice-President. Neighborhood
Councils shall not withdraw cash from the checking account. All expenditures from the checking account shall be for the
purposes stated in Section 22.814(h) of this Code.
In the event that any Neighborhood Council is decertified, abandoned, or otherwise ceases to exist, any and all accounts or
funds that relate to that Neighborhood Council shall be turned over or distributed to the Department, which shall have the
authority to expend the funds as stated in Section 5.485(b) of this Code.
The provisions of this section shall expire, and be deemed to have been repealed, three years after its effective date, unless
SECTION HISTORY
Article and Section Added by Ord. No. 179,545, Eff. 3-16-08.

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1(,(,( 7i /1-&6~tJ 0158' MOTION 8UC)(~ET& '-INll'tf.:;E S'2-J
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The Neighborhood Council system has grown and matured over the last ten years. The needs of the ,~J
system 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 of
public engagement and community empowerment.
DONE was originally created to establish Neighborhood Councils and foster their development. Ten
years and 93 councils later, DONE must now focus on maintaining a robust, effective, accountable and
transparent NC funding program.
The Neighborhood Council Funding Program gives Neighborhood Councils resources to address the
immediate concerns of their community and enhance their neighborhood. Management ofthe funding
program has been challenging for DONE, but out of necessity, DONE has reorganized and implemented
several reforms to the funding program. Working closely with the Council's Committee on Education
and Neighborhoods, the Office of the Controller and the Neighborhood Councils and their
stakeholders, 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 would
accept demand warrants, provide rea] time account information, and assist treasurers with reporting
and financial management.
As the needs of the Neighborhood Councils change, the structure of the funding program may also
need to change. The model established over ten years ago may no longer be the most appropriate. For
more than a year, the Committee on Education and Neighborhoods has drawn extensive input from the
public, including Neighborhood Councils and their stakeholders, to determine the best ideas for policy
changes to make the Neighborhood Council system more effective, efficient, transparent and
accountable, Among other things, the Committee conducted two public forums, a detailed online
survey, and multiple informational committee hearings ..The recommendations in this motion are the
product 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 fromthe
Controller 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 and
reconciliation templates provided by the Department of Neighborhood Empowerment and
adhere to all budget and reconciliation deadlines.
3. ADOPT a policy that requires all Neighborhood Councils to conform to the accounting system
prescribed by the Department of Neighborhood Empowerment.
4. ADOPT a policy that empowers the General Manager and Board of Neighborhood
Commissioners to freeze funds if a Neighborhood Council does not comply with Council policy
and Department of Neighborhood Empowerment mandates, or ifany of the following
circumstances exist: (a) the Neighborhood Council has failed to submit a budget in a timely
manner; (b) an audit of the Neighborhood Council is past due; (c) the Neighborhood Council
has made prohibited or inappropriate purchases; (d) the Neighborhood Council is not in
Agenda Item 10d
7

compliance with training requirements; (e) the Neighborhood Council Board does not have a
Treasurer; or (t) the Neighborhood Council Board is deemed dysfunctional,
5. CONTINUE a policy to prohibit the rollover of unemcumbered funds and DIRECT the
Department of Neighborhood Empowerment, with assistance from the City Administrative
Officer, Chief Legislative Analyst, and City Attorney, to report back on alternative funding
models, including a grant based funding system.
6. DIRECT the Department of Neighborhood Empowerment, with assistance from the City
Administrative Officer, Chief Legislative Analyst, City Attorney, Controller, and Board of
Neighborhood 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 by
the 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 rollover
funds; and (b) details the application and approval process; and (c) establishes deadlines to
complete an approved project.
Administrative Officer, Chief Legislative Analyst, City Attorney, and Controller, to report back
in 90 days on equipment purchases made by Neighborhood Councils in fiscal year 2010-11 for
city and proprietary departments and guidelines to maximize the benefit to the department
and the Neighborhood Council.
Administrative Officer, Chief Legislative Analyst, and the Information Technology Agency, to
report back in 180 days on the feasibility of developing an electronic system for the
Neighborhood Council Funding program that will (a) integrate purchase card and FMIS data
for real time tracking of expenditures and fund balances; (b) accept electronic submission and
approval of budgets, demand warrants and reconciliations; and (c) provide an interface to
track and create financial statements and treasurer reports for the board.
9. DIRECT the Department of Neighborhood Empowerment, upon adoption of these policies, to
immediately notify all Neighborhood Councils of the changes to the policies and procedures
that govern the Neighborhood Council Funding Program, and to report back in 90 days on
their outreach efforts. .
Presented by:
n /1/;.7 J. (/
~' IJ ;/ ./J,i c •
. u{·(v( A-/l·bZrr--L-{y,-,
PAUL KREKORIAN
Councilmember, 2nd District
Seconded by:
8

BOARD OF NEIGHBORHOOD
COMMISSIONERS
CIIT OF LOS ANGELES
CALIFORNIA
DEPARTMENT OF
NEIGHBORHOOD EMPOWERMENT
DANIEL GATICA
PRESIDENT
334·6 EAST SECOND STREET
LOS ANGELES, CA 90012
CARLENE DAVIS
VICE PRESIDENT
TELEPHONE: (213) 485-1360
TOLL-FREE: 3·'"
FAX: (213) 4854608
E·MAIL: done@lacity.org
LINDA LUCKS
KAREN MACK
PAUL PARK
LEONARD SHAFFER
BONGHWAN (BH) KIM, MPA
GENERAL MANAGER
www.EmpoworLA,org
JANET LINDO
EJ(cctlllvo Admlnlstfotivo A5~lslam
TELEPHONE: (213) 485--1360
ANTONIO R. VILLARAIGOSA
MAYOR
November 22, 2011
Council File No. 11-1020
Honorable Members of the
Los Angeles City Council
Room 395, City Hall
200 North Spring Street
Los 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 opportunity
for 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 work
of the Department of Neighborhood Empowerment and its oversight of the
Neighborhood Council system. This report responds to the motion related to the
Neighborhood Council Funding Program (attached), which established a number of new
requirements, gave authority to the Department to suspend Neighborhood Council
funds under specific circumstances, and listed four (4) items for the Department to
address and report back to the City Council within ninety (90) days.
AN EQUAL EMPLOYMENT OPPORTUNITY AFFIRMATIVE ACTION EMPLOYER 9

November 22, 2011
Page 2 of 5
Collaboration Process for Feedback
The Department collaborated with the Neighborhood Council regional alliances across
the City to solicit feedback from Board members and stakeholders on this motion.
Starting in September and continuing through the beginning of October, the Department
cosponsored mini town halls with the Los Angeles Neighborhood Councils Coalition, the
Harbor Alliance of Neighborhood Councils, the Valley Alliance of Neighborhood
Councils, the Northeast Los Angeles Coalition, the Westside Regional Alliance of
Councils and the South Los Angeles Alliance of Neighborhood Councils.
Approximately, one hundred and fifty (150) Board members and stakeholders provided
their feedback at the town halls. In addition, the Department created an online survey
for feedback on the motion where seventeen (17) Board members and stakeholders
provided 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 Funding
Program, inviting Neighborhood Council Board members, particularly those who serve
as Treasurers. The invitation was also extended to the Office of the Controller, Office of
the City Attorney, the City Administrative Officer (CAO), the City Legislative Analyst
(CLA), the Board of Neighborhood Commission, and the Information Technology
Agency (ITA). Between nine (9) to seventeen (17) Board members participated in each
of these work group meetings. A representative of the Office of the Controller attended
two (2) of the meetings. All of the minutes for the town halls and work groups meetings
were 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) standardize
financial templates, forms, and reporting; (3) streamline approvals and management of
the program; and (4) increase accountability.
Status
On February 18, 2010, the City Council voted to limit the access of Neighborhood
Councils to rollover funds (C.F. 09-0600-S159), then eliminated the rollover policy for
fiscal year 2010-11 funds. Consequently, the Department 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.
The Department'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 the Department's contracted vendors,
utility bills and month-to-month office and meeting space expenses. The Department
will be developing clearer guidelines and advance notice of deadlines to encumber
funds as long as required conditions are met.
10

November 22, 2011
Page 3 of 5
Discussions with Neighborhood Council members present revealed the belief by some
that funds were encumbered, for purposes of the Department, when the board acts to
commit funds at a Neighborhood Council meeting. Work group participants also
expressed that the deadlines were not provided with sufficient lead time for
Neighborhood Councils to prepare, and that the April 15th deadline leaves
Neighborhood Councils without the ability to pay vendors through a request for a
demand warrant two (2) months before the end of the fiscal year.
The Department considers these concerns valid and has committed to providing greater
notice and reviewing the deadlines for submission of funding requests. The Department
proposes to provide notice on the deadlines in January and accepting Neighborhood
Councils' requests for demand warrants until June 1st. The June 1st deadline is
contingent on the Department's ability to implement an electronic platform for receipt of
requests.
The Department has standardized the budget and all forms and reports associated with
the funding program, but will continue to be challenged in managing the funding
program as long as it remains a manual paper-based system. The City's newly
adopted, state of the art Financial Management System is designed to meet the needs
of large departments to manage and track highly complex budgets, but it cannot
currently accommodate our unique Demand Warrant and Purchase Card based system
for ninety-five (95) cost centers. Both ITA and the Controller have indicated that, due to
other citywide priorities, they would not be able to build a customized module in the near
future. With their guidance, however, we will be securing a professional consultant who
can 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 Mayor
and 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 and
directed the Department to report back on alternative funding models, including a grant
based 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 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 twenty (20) percent, 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. Bringing everyone to the table can result in the identification of other
funding sources to leverage the City's funds.
11

November 22, 2011
Page 4 of 5
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-rnaking 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 the
Department to oversee with its limited staffing.
A suggestion was offered that rather than sweeping unencumbered funds at the end of
the fiscal year, remaining funds should be placed in a fund intended to be parceled out
as grants to Neighborhood Councils based on need. For example, some Neighborhood
Councils have the need to provide translation at meetings, placing a higher proportion of
their funds in operational expenses and less on neighborhood improvement projects
and outreach.
Item 3
The Department was directed to report back with a mechanism to allow for the rollover
of Neighborhood Council funds from one (1) year to the next for approved projects.
Projects would be deemed appropriate by the Board of Neighborhood Commissioners
or a committee comprised of the CLA, CAD and the Department, which will: (1) define
the type of project that would qualify; (2) provide the details as to the application and
approval 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 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.
Some felt that the project should be completed within one (1) 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.
Item 4
The Department was directed to report back on equipment purchases made by
Neighborhood Councils in fiscal year 2010-11 for city and proprietary departments, and
12

November 22, 2011
Page 5 of 5
on any guidelines that can be implemented to maximize the benefit of said purchases to
the corresponding department and the Neighborhood Council.
Status
The discussion on the purchase of equipment for City Departments in FY 2010-11
clarified the process 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 around the established budgets for the departments.
Suggestions were made 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.
Conclusion
The Department received valuable input from Neighborhood Council representatives
and believes a final recommendation on each of the directives can be provided after
allowing for more input on any preliminary recommendations.
If you have any questions regarding this matter, please contact me at (213) 485-1360. I
will be available when you consider this matter in order to answer any questions you
may have.
Sincerely,
B GHWAN (BH) KIM
General Manager
Attachment
13

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 Neighborhood
Empowerment (DONE) as a result of the budget deficit, thus requiring a re-examination of the role and capacity of
the 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 clear
and 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 Paul
Kerkorian of the 2,d District directing the Department of Neighborhood Empowerment, the City Attorney and
various 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 that
covers (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 of
projects 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) integrate
purchase card and FMIS data for real time tracking of expenditures and fund balances; (b) accept
electronic submission and approval of budgets, demand warrants and reconciliations; and (c) provide an
interface 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's
workload 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 permanent
or 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 of
various 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 in
response 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 the
following response and recommendations to the DONE, the BONe, any workgroups tasked with developing policy
recommendations 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 to
all training areas, including, but not limited to (a) an overview of the NC Funding Program; and (b) City
Government Basics.
3. DONE should develop, maintain and make readily available a written policies and procedure manual for
use 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) Complaint
and Grievance procedures; (d) Brown Act; (e) How to conduct an effective meeting; and (f) Code of
Conduct and Sexual Harassment.
14

SLAANCRecommendations for NC Reform
Page2
4. Robert's Rulesof Order can be cumbersome, inefficient and create unnecessary barriers. The city should
take the appropriate steps to allow Neighborhood Councils to authorize Neighborhood Councilsto adopt
and utilize RosenbergRulesof Order.
5. DONEhas a well-documented history of sponsoring Regional and citywide congress' which provide an
efficient and effective system for training, sharing of best practices and networking. DONEshould receive
sufficient funding to provide at least one regional congress per region and one citywide congress per fiscal
year 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 NCcould
apply and compete to addresssystem building priorities (e.g. outreach and translation); or (b) an annual
funding allocation for each NCbased on a set amount for administrative and operations costs only with
the remaining funds held by DONEto be used for specific outreach, improvement projects and
neighborhood grants through a grants based system; or (3) funding system in which each region
designates an amount to be used for project specific grants which would be distributed, with the
assistance 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 to
prepare particularly newly developed councils to compete against well-resourced councils. The funding
was designed to ensure equity in the distribution of resources among the NCto fulfill their roles and
responsibilities. We therefore oppose each of the options listed above and the use of a grant-base
funding system.
2. The second draft policy solution would allow for the rollover of funds for physical capital improvement
projects which often take longer than 1 fiscal year to complete. This is consistent with but slightly
modifies the city's previous policy for the retention of savings by NCsand should not require changesto
the Planfor a Citywide System of Neighborhood Councils and corresponding ordinance. We therefore
support the rollover of funds for multiple fiscal vear physical capacity improvement projects asan
alternative to the recent "sweeping" of all unspent funds in 2010 and 2011 under the condition that NC
will be allowed to substitute one project for another should, for any reason, it not prove feasible to
complete the project within the subsequent fiscal year.
3. The current system for processing demand warrants, Neighborhood Purpose Grants (NPG),audit reports
and other financial reporting requirements is cumbersome, inefficient, duplicative and subject to errors
and lossof previously submitted documentation by a NC,particularly given the continuous turnover and
reduction of city personnel. We therefore recommend the city streamline the financial reporting process
and reduce the amount of paperwork through the adoption of an on-line system and database that
centralizes, documents, uploads and retains the required information and supporting documentation for
all demand warrants, NPGrequest and audit reports. Once submitted, this information should be visible
to the designated NCboard members and city staff and provide information to assist in tracking the
payment and reconciling any discrepancies.
4. We also recommend the city: (a) assign one or more dedicated staff person to process all demand
warrants: 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 approval
of 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 and
deadline for the submission of funding request has resulted in the loss of funding for needed community
projects. We therefore recommend the city return to the adoption of a fixed annual deadline for
15

SLAANCRecommendations for NCReform
Page3
funding reguest. The NCsshould be notified of the deadline along with the funding allocation at the
start of each fiscal year. Any change to the deadline should require no lessthan 90 days written notice
to all NCboard members.
Establishment of a System of Regional Governance
1. 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 alliances
including the NCslocated within South LA. This is however a voluntary network, providing both flexibility
and preserving the autonomy of each NC. We believe the regional and citywide congresses also provide a
vehicle for coordination and reduce the burden on the DONElimited staff of providing direct
administrative support and technical assistanceto each individual NC. What is needed to support and
facilitate greater collaboration and increase the coordination and efficiency between the various city
departments 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 specific
geographic boundaries of each NC.
We therefore oppose the imposition of a mandatory regional governance structure and in turn
recommend the city funding policies be revised to encourage collaboration. provide greater flexibility
and permit the pooling of funding and sharing of cost across NCboundaries.
Grievance and Complaint Procedures
1. 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 with
DONEthat will be responsible for evaluating the validity based on legal criteria provided by the City
Attorney within 5 days; (b) the NCwill have the option of resolving the grievance first before it goes to the
peer grievance panel; (c) if the Neighborhood Council declines to review the grievance or if the grievance
is not resolved or is not resolved to the satisfaction of the person grieving within 30 days, the Department
will forward the grievance to the regional peer grievance panel for review and development of a plan of
corrective action.
Basedon a determination by the City Attorney, grievances can only be about a NCviolation of their
bylaws or standing/operating rules and cannot be filed by Board members. We agree the distinction
between grievances/complaints are unnecessary, that the current system is subject to potential conflict of
interest 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 therefore
recommend:
• 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 and
stakeholders.
• 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.
16

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
17

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.
18

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
19

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
20 XXXXX

- 11 -
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 total
NC 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. .
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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
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27
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.
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NC Plan Session IV Worksheet

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