Time for the City to Get Serious about the Funding Inequality for LA’s Neighborhood Councils

GELFAND’S WORLD--Los Angeles has a new, 97th neighborhood council by the name of Hermon. Hermon is the name of a small area (one-half square mile according to my trusted source Wikipedia) in northeast Los Angeles. The new council asked to secede from the Arroyo Seco Neighborhood Council, and has now been granted full certification by the City of Los Angeles. This creates one problem which ought ultimately to provoke a crisis within the city's neighborhood council system. 


Since Hermon's population is less than 4000 people, much much lower than the average neighborhood council size, and because the city grants equal amounts of money to NCs no matter what their size, this means that unless something is changed quickly, Hermon will be getting ten times the average amount of money on a per capita basis. 

Hermon Neighborhood Council contains a thousandth part of the city's population. Under the present rules, it will be eligible to receive (and spend) $42,000 in the coming fiscal year. That's because under the current system established under Mayor Jim Hahn more than a decade ago, each neighborhood council is granted an equal amount of money. The current level of $42,000 per council per year is a little lower than the earlier $50,000 level but somewhat increased from the recent level of $37,000. 

Due to the way that the neighborhood councils were originally designed (created by self-appointed organizing groups in different sized regions) the neighborhood councils have widely different populations. My own council is a little smaller than the average, with a total of about 27,000 people in our district. This means that we get approximately a buck and a half per person to spend in a given year. 

There are a few neighborhood councils with much higher resident populations (in the 100,000 range), and they have fifty cents (or less) to spend on a per capita basis. 

The one unchanging element has been the fact that each council gets what every other council gets, even if your area gets only fifty cents per person per year and mine gets three times that level. 

The reason for the city putting so much money into neighborhood councils is a little odd, and is based on historical swerves which would take too much space to detail here. In brief, the money was intended to allow neighborhood councils to function as professional governmental organizations which have costs associated with operations and public outreach. 

A few years ago, three review groups were created by the city to reconsider several questions. One was whether neighborhood council expense money should continue to be doled out at an equal level for each council, or whether some alternative should be created which takes nc size into consideration. 

The review group rejected the idea of changing the structure, in spite of the fact that some people in the participating groups came from councils which suffer under the current system. In my mind this was a mistake. In any case, the City Council and city agencies did not attempt to change anything. 

So now we have a new neighborhood council that will, if the system is allowed to continue, have more than ten dollars per person to spend between July 1, 2017 and June 30, 2018. This by itself is not a great tragedy. The money is only a small part of the overall neighborhood council budget and a microscopic part of the city budget. 

But there is a potential problem. If funding goes by neighborhood council, then what's to stop my own council from splitting itself in half and reaping a revenue windfall? The only answer is that the city would be unlikely to allow this to happen. They would be crazy to stimulate a rush by neighborhood councils of all sizes to subdivide simply to have more to spend. Still, the Hermon formation creates a modest precedent, one which the city will find it hard to argue against. 

Proponents of creating a breakaway council out of Hermon apparently had good arguments on their side, but the arguments were about representation within a larger body, and apparently not so much about finances. 

In other words, the city should have fixed its problem with neighborhood council funding first, then gone ahead with the Hermon certification. 

How should neighborhood council funding be apportioned? 

It's easy enough to calculate that the neighborhood councils average about 42,000 people which is, coincidentally, almost exactly one dollar per resident per year as a citywide average. (You can see the calculations in the Addendum below.) But since actual budgets vary a lot from the mean value, one obvious question would be the following: Why not just set neighborhood council budgets at one dollar per resident per year? That would give my neighborhood council around $27,000, some of the bigger councils would get around $100,000, and Hermon Neighborhood Council would get about $4000. 

We might refer to this as the proportional model, since each council's budget would be directly proportional to population size. There is a certain rationale to this model. If nothing else, there is the philosophical defense that it's one person, one dollar, sort of akin to the old adage of "one man, one vote." 

However, there are one or two tweaks which would better fit the reality of the neighborhood council system. One element of nc funding is covering administrative costs. For example, some nc's pay someone to take the minutes at board meetings and provide typed copies to the public and the board. It's reasonable to assume that the amount of work doesn't really depend on the population size served by any one council. If you have a board of 15, it doesn't much matter whether your board serves 15,000 people or 99,000 people. You'll probably be having one board meeting a month, and board meetings will generally last between two and three hours. 

The same argument holds for paying people to record meetings, for translator services, and for other miscellaneous expenses. 

In other words, there are baseline expenses that don't much depend on the size of the neighborhood council. For this reason, we ought to start with a baseline stipend of perhaps $5000 or so per council. Maybe $7500. This would allow every council to buy staplers, audio recorders, and people to operate them. 

At $5000 per council, this comes to a citywide total of about half a million dollars. 

There are also expenses that are proportional to the population served. For example, sending a newsletter to all of the mailing addresses in your council depends on how many mailing addresses there are. The expense of having a barbeque for your district also depends on how big the district is. So we can imagine an additional part of the stipend that is proportional to population. 

The rest of the calculation is simple. We can imagine an overall citywide budget of a dollar per person, which comes to $4042,000. First we allocate $5000 per council for the fixed expenses. Then the remainder of the $4,042,000 would be divided up among the councils on a per capita basis, resulting in an additional proportional stipend of about eighty-eight cents per person per year. 

Taking three illustrative examples, I calculate yearly stipends as follows: 

Hermon neighborhood council would receive $8,500.

My council would receive $28,000.

A council with 100,000 people would receive $93,000. 

In this approach, Hermon is still well above $1 per person, but at about $2, it's way lower than the currently proposed $10 per person. My council would see a reduction of about $14,000, but we would be functional. We would probably spend less money on social welfare spending. A very large neighborhood council would still receive less than $1 per person, but it would be well ahead of its current level (less than half a dollar) and would probably spend more on social welfare. 

If people want to tinker with these models, might I suggest that the easiest way to do so is to add a little more to the baseline, which would move the stipend a little closer to the current system. This would be beneficial for Hermon and bring my council closer to its current stipend. It's also possible to come up with more complex models (such as a logarithmic function or perhaps to provide specific budgeting based on specific forms of outreach). 

There is one hidden advantage to converting overall neighborhood council funding to a modified proportional system which includes a fixed baseline and some proportional (or semiproportional) funding. That advantage is that the city can allow and fund smaller neighborhood councils which break off from larger councils. There won't be much additional expense, and neighborhoods are better served by small local organizations rather than distant organizations. Under the current system, the city will have a financial advantage to retaining the larger councils in their present form, even if making several smaller councils out of one bloated council would be advantageous to the people in the region. 

Odds and Ends 

In a recent tweet, Donald Trump claims that a lot of news reports about his White House were made up by the reporters. That's at least a clarification of what is meant by "fake news." The way to look at this claim is that reporters are used to nailing down information by using human sources and documents. Trump is used to lying. Which shall we believe? 

Now we have a report that Jared Kushner tried to open a "back channel" to the Russians prior to Trump's inauguration. Sources on the Trump side almost immediately claimed that this had something to do with Syria. Notice that they didn't deny that the approach had been made. The Washington Post refused to report the Syria part of the story because there was nothing to substantiate it. The simpler explanation is that the Trump camp was willing to trade U.S. security interests for its own financial gain. 

Josh Marshal takes a slightly different approach but basically gets to the same conclusion: Donald Trump is doing what he can to undermine the Nato alliance and thereby give Putin everything he wants.  


Given a Los Angeles population of 4 million forty-two thousand people (4,042,000) as of the year 2017, and 97 neighborhood councils, and dividing the one by the other, we get an average neighborhood council population of 41,670. (The result isn't much different if we use the previous number of 96 councils.) This is within rounding error of the current stipend of $42,000 per neighborhood council set by the LA City Council. The total stipend for 96 neighborhood councils is therefore the product of $42000 per council times 96 councils, or $4,032,000. Adding the new Hermon NC, the total (if the rules stay the same) equals 4,074,000. 

There are lots of ways to take four million dollars and divide it up among the councils. The point of this exercise is to figure out how to lessen the effect of either having a very small population or a very large population, since the per capita stipend varies over a range of 20-fold under the current system. 

By the way, the traditional rule was that (except for extenuating circumstances) each new neighborhood council should have at least 20,000 people living in its district. The city could conceivably decide that every neighborhood council of at least 20,000 people would get the full $42,000, and that much larger councils would get some proportional increase. 

Another possibility that has been floated from time to time is that larger neighborhood councils would be eligible to apply for specific funding to cover outreach expenses. This would fit specific funding to specific needs, but would require additional staffing.


(Bob Gelfand writes on science, culture, and politics for CityWatch. He can be reached at amrep535@sbcglobal.net) -cw