The Los Angeles Department of Neighborhood Empowerment and the neighborhood councils it oversees are being targeted by city officials for staff and funding reductions in an effort to close a multi-million budget shortfall, a city committee announced January 29th.

The office of the City Administrative Officer (CAO) released its mid-year financial status report and plan Monday, February 1st, which recommends laying off 19 positions at the agency that supervises the 90 neighborhood councils in Los Angeles.

Miguel Santana, the city’s chief budget analyst, is also recommending that the yearly allotments to the local advisory boards be reduced by 50 percent, deferred or eliminated. Currently, neighborhood councils receive $45,000 for community projects and expenses.

In addition, the City Council’s Budget and Finance Committee voted 3-2 February 1st to take away rollover funds that some neighborhood councils have amassed, completing a cycle of worrisome news for the local advisory boards. Rollover assets are funds saved by a neighborhood council from a previous fiscal year.

Del Rey Neighborhood Council President Mark Redick called the recommendations of taking away rollover funds “totally ridiculous,” and feels that this penalizes councils that plan for emergencies and use sound fiscal policy.

“I knew that they had talked about cutting our budgets, on top of what we lost last year,” he said.

The Del Rey council has approximately $30,000 in its rollover account.

“The real sticking point is the rollover funds, and I and other neighborhood council leaders will fight like hell to keep our funds,” Redick asserted. “What’s happening now is because of financial malfeasance downtown, they’re coming back to the neighborhood councils and using our rollover funds as a honey pot that they can take.

“They’re saying to neighborhood councils that acted frugally, that acted responsibly, with their money, ‘Thank you for acting responsibly, now we can take it,’” Redick continued. “I’m saying to them (no way).”

City Councilman Bill Rosendahl was one of the two “no” committee votes to cut financing to neighborhood councils and is dismayed that the local councils could lose their rollover funds and half of their financial allotments.

“Neighborhood councils are one of the prime examples of grassroots democracy in action, and I don’t think that we should be destroying them,” the councilman told The Argonaut the day after the committee voted. “I took a strong position for all of the neighborhood councils, because I believe that they provide an invaluable service to their communities.”

Rosendahl agrees with Redick about the rollover funds.

“I think that Del Rey has been very appreciative of what their community needs are, and it would be unfortunate to penalize them,” he said.

The City Council was scheduled to vote on eliminating the rollover funding mechanism and the reduction in neighborhood council budgets Wednesday, February 3rd.

The proposed cuts come at a time that the city is scrambling to reduce its anticipated $212 million deficit and an audit that revealed inadequacies at DONE regarding financial accounting and oversight of neighborhood councils.

The staff reductions would leave the beleaguered department with 17 full-time employees, far below what is necessary to sufficiently handle the demands of the city agency, said DONE General Manager BongHwan Kim, in an interview with The Argonaut.

“People are pretty depressed at the moment,” Kim said. “I have people who want to leave because they don’t want to be saddled with an impossible workload if these cuts are approved.”

Some neighborhood council members within The Argonaut coverage took issue with the possibility of losing their funding.

“I’m concerned about the cuts to DONE, but I’m encouraged about the way that they’ve responded to (the potential staff reductions),” Kate Anderson, a board member of the Mar Vista Community Council, said. “We realize that this is a difficult time for the city government, but I am completely opposed to the drastic cuts that are being proposed.”

Challis Macpherson of the Venice Neighborhood Council says neighborhood councils are already doing many of the things that DONE is required to do.

“We’re stepping up and taking over mentoring people who want to run for their own neighborhood councils, we’re mentoring people on land use issues, disaster preparation, council bylaws and the Brown Act,” Macpherson said.

Last year, neighborhood councils survived an attempt by City Councilman Bernard Parks and others to slash their annual allotments from $50,000 to $11,500. Board members of the advisory councils and their supporters turned out en masse at several budget and council meetings to protest the cut in funding, but some think that may not be enough this year.

“Not everyone appreciates neighborhood councils like I do,” Rosendahl noted.

A recent audit by City Controller Wendy Greuel of DONE painted a dismal portrait on the financial management on the part of some neighborhood councils and the agency’s lack of enforcement regarding transparency and fiscal reporting.

“The findings showed that, while engagement and activism have grown, there has been a systematic failure of accounting and fiscal oversight of the neighborhood councils by DONE,” Greuel wrote.

Los Angeles County District Attorney Steve Cooley’s office has investigated members of the local councils for a variety of alleged financial improprieties, which has fueled the debate among some elected officials regarding the viability of DONE and whether neighborhood councils should continue to receive the same financial backing.

James Harris became the fifth neighborhood council leader to be indicted when the Public Integrity Unit of the district attorney’s office charged him with allegedly misusing taxpayer funds. Harris, the former president of the Empowerment Congress Southwest Area Neighborhood Development Council, pleaded not guilty to four counts in the superseding indictment.

“The department does not have the proper personnel in place to provide the fiscal oversight that could help prevent the waste of taxpayer funds detailed in the audit,” Greuel wrote in her audit.

Kim, who requested the audit, recognized that Greuel’s report did not cast the best light on his department, but feels that it was a necessary step in order for the agency to improve.

“I’m sure the audit certainly didn’t help (our perception in some lawmakers’ eyes),” Kim acknowledged. “But it was something that had to be disclosed publicly so that the necessary improvements and checks and balances can be implemented.”

Kim said if the recommendations are adopted or if DONE were merged with another city department, those who suffer the most would be the various neighborhood councils and their constituents.

“There’s no doubt that if these recommendations are accepted, it will be a very big setback,” DONE’s general manger said. “If we are merged with another city agency, the responsibility will then fall on the (elected) councilmembers’ staffs instead of the neighborhood councils.

“And other departments don’t really understand neighborhood councils and how they work.”

While he strongly endorses the neighborhood council system, Rosendahl said he is saving the majority of his compassion for the advisory boards, not DONE.

“I’ve never been all that impressed with the bureaucracy at DONE,” the councilman said. “I have much more sympathy for the neighborhood councils.

“When there is a desire to destroy this wonderful experiment in grassroots democracy, that tells me that the priorities are not right.”