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Archive for the ‘Neighborhood Empowerment’ Category

Regardless of the size of the neighborhood council allocations the City Council approves in the next budget cycle, possible restrictions on the use of the city-issued purchasing cards may make it all moot.

The situation was discussed at last Saturday’s Los Angeles Neighborhood Council Coalition meeting. B H Kim, general manager of the Department of Neighborhood Empowerment (DONE), updated the members.

The cards are currently used for the purchases of goods and services, including monthly and annual operating expenses such as phone messaging, storage, accounting support and web site maintenance.  Non recurring uses for individual services are common for special outreach events – rental of equipment, entertainment – and election activities.

The purchasing card has become the tool of choice for many transactions, because the alternative – the demand warrant – takes months to process….and it is costly to the city.  I have heard it can cost $100 to process one, whether it is for payment of a $10 invoice or $1,000. That point was raised at the meeting; Kim did not dispute it. For that matter, he alluded to the high cost without stating an actual amount.

According to Kim, both City Controller Greuel and City Attorney Carmen Trutanich agree that use of the purchase card for services of any kind is in violation of city policy.  Furthermore, purchases of equipment by neighborhood councils for city departments (including fire and police) require a neighborhood purpose grant.  This type of grant was only instituted last year.

A demand warrant is the only other alternative as it stands now.

Assuming the city has its way, it will be extremely difficult for NCs to operate. 

The reality is that part-time volunteers do not have the time to process the same paperwork paid city department employees handle.  Neither Greuel nor Trutanich can comprehend that rules designed for a bureaucracy do not lend themselves to small, loosely-supported, grass-roots organizations.

Merchants are reluctant to deal with NCs if a demand warrant is involved.  I can’t blame them.  Who would want to wait many weeks or months for payment?

It would also be difficult for NCs to plan events not knowing when or if a vendor will be paid.

Any increase in demand warrant volume will further stress the already unacceptable productivity of the Department of Neighborhood Empowerment.

I am not suggesting NCs should be allowed to use the card for everything under the sun.  The city is right to be concerned with controls, and demand warrants are viewed by some members of the City Council and the City Controller as a means to curb potential misappropriation or fraud.

But when the cost of controls outweigh the benefits, everybody loses – especially the neighborhood councils. 

Actually, that might be exactly what City Hall wants.  After all, the NC system was a bone the electeds tossed to the citizens to dampen secessionist emotions. Promoting grass-roots democracy or generating interest in local government was a secondary objective at best.  Why on earth would officials encourage citizens to have a forum to question their power base consisting of public labor unions and developers?

You can have controls and still allow the purchasing card to be the primary payment mechanism.  For that matter, the less the city is involved, the better.

DONE should be removed from the funding process.  A Financial Standards and Control Board consisting of NC members with the appropriate credentials and experience should assume responsibility for this important function. There are many talented individuals to choose from, including those with industry experience.

The Board would have the power to authorize funding, train treasurers, negotiate with CPA firms to provide services to NCs that lack accounting capabilities and establish reporting requirements.  More importantly, it would need the power to certify, discipline or sanction NCs.

The cost of services provided by CPAs could be funded by a cutback of staff at DONE – those currently responsible for the accounting process – and flat annual fees levied on each NC as determined by the Financial Standards and Control Board.

It would be money well spent. The city does not have the caliber of employees capable of handling neighborhood council finances efficiently, nor does it have the mindset.

Dedicated neighborhood council advocates have fought tenaciously for every modicum of influence the system has.  I hold these people in the highest regard.  They have achieved much with very little. However, I fear that if the city’s latest move comes to fruition, it will discourage participation.  Veteran NC members will eventually move on with no one to replace them.

It may be necessary for neighborhood councils to take an adversarial stance with City Hall.  The alternative is a slow death.

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Sherman Oaks Neighborhood Council staged a unique form of outreach: a lottery where the stakeholders could decide what was the worst pothole in the community.  The winning hole would be filled; funding provided from the NC’s budget.

I have to credit SONC for imagination.  There are few problems in this city that appear to get the more attention from stakeholders than potholes. So why not turn lemons into lemonade by transforming this pervasive icon of LA’s mismanagement into a marketing concept?  The idea rivals any concocted by Don Draper and the advertising whiz kids of Sterling Cooper.

There are bigger problems than potholes, for sure, but few people seem to care. A lottery to decide how much of NC funds should be used to offset LA’s pension liability for Council Member and Controller wannabe Dennis Zine’s double-dipping benefits package would probably garner little interest. 

While the lottery was a brilliant plan, it sends the wrong message: it’s OK to hand out NC funds to pay for core services.

NC Valley Village has provided assistance to local government entities, too.  Recipients included Colfax Charter School, the LAPD NoHo station, the fire department’s Community Emergency Response Training (CERT) program and the NoHo Public Library. However, the funds were for unbudgeted discretionary programs or purchases and reflected our community’s appreciation for the direct positive impact these organizations have had on the quality of life in our part of the city.

But forking over NC funds for a core service that should be provided by the city on an ongoing basis is setting an undesirable precedent.

Department of Public Works commissioner Andrea Alarcón said in a press release:

“We commend the Sherman Oaks Neighborhood Council for its leadership and for taking ownership of its neighborhood and streets.”

“We encourage other Neighborhood Councils to do the same.”

I’m sure Ms. Alarcon and the city would welcome such participation. 

It’s another way to strip neighborhood councils of some of their $40,500 allocations (which are 20% less than the $50,000 granted three years ago) and to reward the city for reckless mismanagement of its spending. 

City Council Member Paul Koretz was on hand for the news conference announcing the lottery results.

He should have expressed remorse for the policies of the mayor and City Council that have allowed LA to develop the structural financial hole it is in today – and that’s the biggest pothole around.

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Street banners are popular marketing tools for events and organizations.

In Los Angeles they are controlled by permit and must be replaced periodically in the case of long-term installations.

I hate to see old banners go to waste, so why not find alternative uses?

My wife and I placed two prior versions of the NCVV banner on the side of our garage in our other village – Incline Village, NV, a small community on the north shore of Lake Tahoe.

Ginny Hatfield, NCVV Vice president, and Pete Sanchez, President of the Valley Village Homeowners Association, pose alongside old NCVV banners
Our Los Angeles guests will now have a visual reminder of Neighborhood Councils 445 miles from Valley Village.

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The long-anticipated Neighborhood Council Congress is less than two weeks away.

A dedicated group of volunteers, under the leadership of Cindy Cleghorn of Sunland Tujunga,  have succeeded in wresting control of this event from DONE and City Hall.  For the first time, we will truly have a congress that represents the stakeholders and board members. 

While NCs have formed regional coalitions which have had some success in exerting influence and grabbing the attention of DONE’s stumbling bureaucracy, there is no substitute for a homegrown, citywide effort designed to promote participation and education – the steps vital to the future of the Neighborhood Council movement.  To paraphrase an old saying, we either stand together or collapse alone.

I regret I will be unable to attend due to business commitments. That’s too bad for me since I have been a frequent critic of City Hall’s disdain for NCs and DONE’s gross mismanagement of the system.

If I could attend, I would address one of the most glaring deficiencies perpetuated by DONE – the failure to establish financial control and reporting.

Neither DONE nor Council Member Paul Krekorian understand what is needed to establish a system of tracking expenses.  This is not a personal criticism – we all have our strengths and weaknesses, but accounting is a core function that should be left in the hands of competent professionals…not necessarily CPAs or MBAs, but people with real world experience in managing the finances of a company or organization.

Allow me outline what is necessary to establish a semblance of a system for Neighborhood Councils.

The most basic requirement is a uniform software application.

There are 95 neighborhood councils and I doubt if any two share the same process.  I suspect Excel is the application of choice for many (that’s what I use), but there are probably an assortment of others with comparable features.

Regardless of the system, the common denominator for effective accounting and reporting is the competence of the treasurer. So why should a neighborhood council with a savvy treasurer be interested in migrating to a uniform system?

Well, people come and go, and so do competent treasurers.  You might have a good one today, but there is no guarantee you will have one tomorrow.

A uniform accounting system will assure the existence of a common pool of knowledge.  When a treasurer leaves on short notice, help and advice would be a local phone call away – not to India.  Chances are, a neighboring NC could talk a replacement through the steps of posting an entry, running a report or reconciling activity to the US Bank statement or DONE’s records.

Quicken would be more than adequate to handle the needs of any NC.  It is essentially an electronic check book with basic reporting and reconcilement features. It is also easy to learn and use. A handful of experienced treasurers could train beginners in group classes.

NCs could submit transaction reports to DONE in a common format with a few clicks. But will DONE have the ability to manage the data once it is received?

If DONE restricts its monitoring to just preventing NCs from exceeding their annual allocations, maybe. If the department attempts to track actual expenses versus line budgets, I can assure you total chaos will reign. However, DONE has no business tracking budgets by line items – the staff couldn’t do it back in the days when the headcount was several times larger, so why would anyone think they could do it today?  Besides, budgets will generally be highly individualized. As long as expenditures are in accordance with the city’s purchasing policies and properly documented, it should not make a difference whether funds are spent to support a community project or conduct outreach.  Line item spending decisions are best left to those closest to the neighborhoods.

Even if DONE limits its expense tracking to the aggregate allocation level, I have my doubts they could maintain the process. This is why I strongly support establishing and empowering a Neighborhood Council Accounting Standards Board to assume responsibility for all consolidated reporting and financial supervision of the NCs.

The operations of the Standards Board would be funded by eliminating two positions at DONE and transferring the savings to an account monitored by the City Controller. The Board would draw against the account to fund training and provide personnel support to NCs in need of assistance. Each NC would also have a small portion of its annual allocation transferred into the account as a reserve for remedial interventions. For example, non compliance with funding policies by a neighborhood council could lead to the Standards Board transferring  accounting responsibility to a third-party (if not suspension of funding).

The members of the Standards Board would be elected by NCs (one vote for each Board in good standing) from a pool of candidates with proven skills and appropriate backgrounds.

Consolidation of NC accounting data will require basic balancing controls – simple for the average accountant or bookkeeper, but probably too complicated for DONE’s staff.

Ideally, checking accounts, or convenience checks connected to the US Bank purchasing card accounts, would facilitate a far less costly alternative to demand warrants.  I did submit procedural controls for checking accounts to Mr. Krekorian prior to his NC town halls, but he was reluctant to pursue the concept.

If Neighborhood Councils truly want to be independent, establishing control of finances will be an essential step.

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Bong Hwan Kim, the general manager of the Department of Neighborhood Empowerment (DONE), supports a concept requiring a neighborhood council to attain and maintain a 1% turnout of registered voters in order to seat a board.  This is according to an article in Joseph Mailander’s blog.

Council Member Paul Krekorian acknowledged the embarrassingly low turnout evident in many NC elections, but did admit the same is true for all levels of local government .

Neither Kim nor Krekorian mentioned the lack of money available to NCs to publicize and run an election.  The Los Angeles City Clerk was supposed to conduct outreach on behalf of NCs in the last election cycle but did nothing – zip, nada – despite taking $5,000 from each council’s budget for that purpose.

If NCs had a fraction of the money City Council candidates spend on a campaign, they could generate more votes.  Mr. Krekorian should know that. He spent $771,000 to defeat Chris Essel in the special election for CD2 back in 2009 (Essel had double the expenditures).  Twenty-thousand votes were cast, which represented a 16% turnout in the runoff. In the primary, the total was sixteen-thousand ballots representing 13%

It’s not just the lack of money to market an election.  Stakeholders know that NCs are advisory bodies and do not legislate.  It is harder for the average voter to get excited when they know their votes will have little impact on city politics.  The sad fact is most City Council members and the mayor ignore input from the councils on any issue of significance because, unlike public unions and other interests, NCs as bodies cannot endorse or make campaign contributions.

The City Council knows it can suffocate the system by ignoring it and by continuing to saddle the volunteers with a hapless layer of oversight – DONE.  So why not throw another impediment out there?

Instead of proposing a voter turnout requirement, DONE should be pushing for increased publicity for the system by the city.  Of course, there is no money for that unless you eliminate DONE and allow an autonomous board elected by NC members to plan and oversee outreach programs with the savings. There are well qualified members who could put Kim’s salary of $155,000 to better use.

But Kim only knows one-size-fits-all solutions – that without the resources to assist or restructure the most troubled NCs – will lead to the demise of most of the system.

It is bad enough he can barely manage DONE; perhaps he should propose solutions for his own department’s problems first.

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I really wanted to write a post about the unraveling economy and how it could affect California and Los Angeles.  I’ll save that for next week.

The NC system was rocked by the allegations against Al Abrams, until recently the President of the Board of Neighborhood Commissioners.  I have no comment concerning the allegations.  They are personal issues that should have no bearing on the ninety-five chartered councils spread throughout the city.

Unfortunately, some at City Hall may use this disturbing development, regardless of how it plays out, as another weapon against the grassroots organization, as they did with the handful of  crooks who stole hundreds of thousands of dollars from under the nose of the Department of Neighborhood Empowerment a few years ago.

Yet, these same downtown dons show no emotion or outrage with the mayor when departments reporting to him are implicated in charges of  bribery, sexual harassment and incompetence.  They look after their own….. and the neighborhood councils are not part of their city families.

The neighborhood council concept was born out charter reform following the failed secession movements of the Valley, Hollywood and Harbor areas of the city. The charter change was a bone thrown to the disaffected residents who supported breaking up the city.  It was a bone with no marrow.

Yet, that did not stop highly motivated activists from making the most of the meager offering.  From the defeat of  Measure B to the termination of the red light camera program, NC members have used the system to challenge the establishment responsible for running our city into the ground. Even the existence of a Board of Neighborhood Commissioners controlled by the mayor and the ineptness of the Department of Neighborhood Empowerment could not suppress them.

There is so much more NCs could do if they were allowed to be governed by their own.  For one thing, an oversight board elected by NC board members would clean up the system – and there is cleanup needed.  DONE has ignored non performing councils (for example, 30% have not even bothered to submit a budget). Board members from functioning councils would not tolerate slackers.  They know that dysfunctional bodies hurt the brand and would not hesitate to take appropriate action combined with an offer of assistance. If necessary, an empowered, autonomous oversight board would cut off funding in part or entirety for wayward councils.

If not an autonomous board, a conservator for DONE should be established to restructure the department and train the staff.

So it’s either a crossroads, where one direction eliminates DONE’s authority and most of the department and another restructures it into an effective source of support, or the off-ramp – where dedicated NC members decide to bail out of the traffic and go home.

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It is an understatement to say I have harshly criticized the management of the Department of Neighborhood Empowerment.

It’s not a personal issue.  I am acquainted with a handful of the department’s employees, past and present, and have respect for most of them.  There is a desire to do the right thing; what is lacking is the ability. That’s a management problem.

While there is talk of training programs for NC board members, no one is addressing the serious lack of skills downtown.  It is naive to assume that DONE can help implement system improvements when the staff is incapable of administering basic processes.

Failure is rarely more fundamental than what occurred last week.

An E-Blast was sent by the department to its NC distribution on July 25th. The blast contained a link to a budget template NCs should use to submit their budgets.

Fine, but the budgets were due ten days earlier on July 15th. What’s more, the link did not work.  When it was finally fixed, it brought you to a sign-on screen asking for a user ID and password.  Few were aware of a user ID or password to access the template. 

An accountant, who serves as the  treasurer for a neighborhood council, did gain access and put the template through the paces.  He found some serious flaws that would significantly limit its usefulness even if in the hands of trained personnel.

Rolling out a new feature requires a few basic steps anyone should be able to figure out. This includes pre implementation testing performed by users. DONE just threw it out there hoping it would stick.

This event is not the end of the world.  Budgets will eventually be loaded (to the extent they are submitted), but the lack of planning and even less understanding of the  objective is par for the course when it comes to DONE’s management. Expect confusion when the department tries to integrate actual NC spending with the budget data.

When the mayor’s office proposed to move DONE under the Community Development Department over a year ago, I was adamantly against it, as were almost all NC board members.  I am now having second thoughts.

Don’t get me wrong, I do not want DONE to lose its standalone departmental status, but what good is it if the department is incapable of standing alone? Its record of failure is documented by two separate audits, quite possibly the two worst back-to-back audit reports any department has received in the history of the city.  The same team is still largely in charge.  Expecting a different result in the years to come meets the classic definition of insanity.

CDD could have supervised and offered training and structure until such time DONE could walk by itself.  Just as courts appoint a conservator for those with diminished capacity and Major League Baseball stepped in to assist the Dodgers, it sometimes takes intervention by a third-party to right the course. 

In the case of DONE, a partnership between the CDD and NC Board Members might have been the best solution for restructuring.

It would be worth reading my article about a conversation I had with former City Controller Laura Chick over a year ago. Her thoughts about DONE and the role of the City Council in the chaos surrounding the poorly managed department echo my concerns.

Council Member Krekorian should have read it, too.  Better yet, he should have placed a call to Ms. Chick. He might have gained appreciation for the futility of dealing with the dysfunctional organization before issuing his weak package of motions.

I have been involved with the NC system since 2005 when I was first elected to the Board of NC Valley Village.  I have had the pleasure of working with many dedicated board members and stakeholders from around the city.  These are people who have sacrificed extensive personal time only to be largely ignored by City Hall.

We have reached a point where further reliance on DONE will bring the NC system down within a few short years. Board members and stakeholders need to unite and fight for autonomy rather than trust our elected officials and department bureaucrats to do what is right.  A conservatorship of sorts over DONE jointly managed by the CDD and the neighborhood councils might be the best compromise.

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