Los Angeles is $208 million in the hole and Neighborhood Councils across the city face a total elimination of their taxpayer funding.

Now, as the 90th Neighborhood Council (NC) is being established in Westwood, the City Council is being advised to cripple that mandated system by slashing or totally eliminating funding. They are also being urged to chop the staff or eliminate the entire department that supervises Neighborhood Councils. The NCs were written into the City Charter following the Valley secession movement of the late 1990s.

"Reductions will need to be based on an all or nothing approach," said City Administrative Officer Miguel Santana in a report to the mayor and City Council.

"The NC funds support the operation of the NCs and it will be difficult for the NCs to continue without funding," the city's chief budget officer conceded.

Click for Special USC Report: "Layoffs Threaten L.A.'s Neighborhood Council System"

"The NCs are part of the city family," he said. "It is important to recognize the contributions of the 1,600 members of the NC system, but given the city's fiscal crisis, the city can no longer sustain these costs."

Neighborhood Council members and community stakeholders are organizing to appear in City Hall at 1 p.m. today, when the City Council's Budget and Finance Committee takes up the issue. The committee, is made up of Councilmen Bernard Parks, Greig Smith, Bill Rosendahl, Jose Huizar, and Paul Koretz.  Santana's report can be found here. The committee is expected to make a recommendation to the full City Council on Wednesday.

Once the city closes the budget gap, it will have to deal with a $484-million shortfall for the fiscal year that starts July 1. Santana projects a $785-million deficit the following year, then $952 million and $1.2 billion the year after.

Meanwhile, during the greatest fiscal crisis in Los Angeles history, the Department of Neighborhood Empowerment (DONE) is embroiled in a bookkeeping and financial scandal detailed in an extensive audit by the office of Controller Wendy Greuel. At least six Neighborhood Council officers are facing felony charges for allegedly misappropriating taxpayer money and DONE can't account for $5.6 million of the funds it oversees. DONE supervises the Neighborhood Councils.

Neighborhood Councils received $45,000 this fiscal year for operational expenses and civic projects within each of their communities. In previous years they received $50,000. Although the Charter mandates the establishment of Neighborhood Councils, it does not guarantee a specific amount of funding.

Until this year, Neighborhood Councils conducted their own elections using money from

" The city can no longer sustain these costs."

within their budgets.  But, the City Council shifted election responsibility to the City Clerk and allocated an additional $1.4 million for that mission. The first group of elections on March 2 includes that of the Chatsworth Neighborhood Council.

■ Eliminating Neighborhood Council year-to-year rollover of unspent funds and the "suspension and/or elimination of the NC funding program." 

■ Laying off 50 percent of the remaining DONE staff, leaving 17 to service 90 Neighborhood Councils. At one time the department had nearly 70 on staff.

■ Transferring to the city's Reserve Fund $151,000 in DONE salary savings.

■ Eliminating the bank card system for smaller purchases and cash withdrawals, and redefining or restricting NC expenditure categories.

 There is also a proposal for a study to determine the feasibility of consolidating DONE with another larger city department.

Santana's other recommendations, if approved by the City Council, would eliminate 3,900 city jobs this year, according to published reports. With layoffs beginning immediately, the city could save $65 million annually, he said.

He also called for the Cultural Affairs Department to save $2.2 million by suspending all grants for art classes, concerts and festivals. He advised the cancellation of the next class of Fire Department recruits and a cut of 100 employees in the office of City Attorney Carmen Trutanich.

Santana recommended the city eliminate the three agencies making up the Department of Human Services -- the Human Relations Commission, Commission on the Status of Women, and the Children, Youth and Families Commission -- as well as the Departments of Disability and Environmental Affairs.

The City Council is set to meet Wednesday to discuss the layoffs, which also impact basic services such as public safety, parks and libraries. □