Proposed Ba11ot Measure to Update Community Plans Every Ten Years

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1 FORM GEN. 160 CITY OF LOS ANGELES INTER-DEPARTMENTAL CORRESPONDENCE CAO File No C.F Date: To: From: Subject: November 2, 2010 Honorable Members, Los Angeles City Council Gerry F. Miller, Chief Legislative Analy~ _ Miguel A. Santana, City Administrative Officer ~U ~ Proposed Ba11ot Measure to Update Community Plans Every Ten Years SUMMARY On October 27, 2010, the Rules and Elections Committee instmcted our offices to prepare a report relative to funding options to give the Plmming Department the resources it needs to update all of the City' s 35 Community Plans. This action was pursuant to a Motion (Garcetti-Reyes-K.rekorian), directing the Plmming Department and City Attorney staff to prepare a Charier amendment for the 2011 March ballot to require all of the City's Community Plans to be updated every ten years. The Council will consider this issue on Tuesday, November 2, 2010 (Item 28 of the agenda). We have included a brief discussion of potential funding options and considerations. Based on input from the Planning Department from January 2008, the estimates range from $3.2 million in the first year to update seven Community Plans to $5.6 million to update 12 Community Plans by the fifth year. The total cost to update all 35 Community Plans would range from $70 to $79 million. The proposed Charter amendment, if approved by the voters, will be a new legal requirement that the voters would impose on the City, inasmuch as this is not a State mandated requirement. While the Mayor and Council can implement the intent of this policy without amending the City Charier by annually appropriating th~ necessary funding to update all Commw1ity Plans on a ten year cycle, a Charter amendment would ensure that Community Plans be updated every ten years and mandate that funding be provided for this purpose. Given the City' s current financial constraints, a Charter amendment would signal that this effort is one of the City's highest priorities and would provide the City with less flexibility in allocating limited funds to the other high priority services. Your Committee asked us to report on the following issues : 1. Sources of funding and budgeting recommendations to implement the Charter amendment, including the use of title fees or the documentary transfer tax, and/or the property, tax, or other sources of funding? The Council adopted a fee in called the City Planning Long Range Planning Fund which imposes a three percent surcharge on building permits and planning cases. Its purpose is to generate funds to offset part of the cost for any long-range planning activities including General Plan and Community Plan updates. It is anticipated that the fee will generate approximate $1.5 million annually. At this time the amount of the revenues that would be applied to Community Plar1 updates is not known.

2 - 2- City Attorney staff informed us that the City cannot impose a development fee to cover the entire cost of the Community Plan updates without a fee study, which would include public hearings, and any fees levied would need to be consistent with the requirements of State law. Property Taxes The following three types of taxes are attached to mmual propetiy tax bills: General Tax Levy The General Tax Levy is one percent of the value of the property and is limited to one percent by Proposition 13. The City receives less than 30 percent of the one percent tax, which is regulated by the State, and all of it goes to the City General Fund. The Budget Revenue Book shows how much the City receives, which was approximately $1 billion in The City cannot change either the percentage of the General Tax Levy or the percent regulated by the State. However, since the funds are unrestricted, the City could use a portion of this revenue to pay for the Community Plan updates, which would mean that other expenditure reductions would need to be found to offset the increased appropriation for the Community Plans. Voted Indebtedness The annual property tax bills include assessments to pay for bonds or other obligations that were approved by voters dming an election, such as the City of Los Angeles General Obligation Bond. These assessments are based on a percentage of property values and have a restricted use. If the City were to choose this method to fund the Community Plan updates, then the City Attorney would prepare an Ordinance to be placed on a ballot which identifies the purpose of the assessment, the amount to be collected and the percentage to be assessed for each property. However, this type of assessment usually has a financial limit and would not be used to fund a program indefinitely. Direct Assessments Direct Assessments may be collected through the property tax bill, but rather than being based on the value of the property, the amount is based on a formula, such as the square feet of the parcel or the square feet of improvements to the property. These assessments are approved by voters and have a restricted use, such as the City 911 Fund. As with voter indebtedness, if the City were to choose this method to fund the Community Plan updates, an Ordinance would need to be written to be placed on a ballot which identifies the purpose of the assessment, the amount to be collected and the method of calculating the assessment for each property. Documentary Transfer Tax The documentary transfer tax is also referred to as a deed tax or a real estate tax. When a property is sold or refinanced, approximately 4.5 percent of the value of the property is collected by the City and deposited in the General Fund. This is a volatile source of revenue, since the amount collected depends on the volume and the value of sales and refinancing transactions. The Budget Revenue Outlook book includes graphs that show the changes in this revenue over the years.

3 - 3 - As with the General Tax Levy, the City could use a portion of the documentary transfer tax to pay for the Community Plan updates and then corresponding expenditure reductions would need to be identified to offset the Community Plan appropriation. To add a special tax to pay for the Community Plan updates to the general documentary transfer tax requires approval by two-thirds of voters. It would be an inconsistent source of revenue due to the volatility of the number of annual transactions. Title Fees The City does not receive title fees. 2. Can the process be phased in, and/or could it start in several years at a time when the City is not facing so many budget problems? The Community Plan updates may be phased in over time. Each Community Plan takes approximately three years to complete, which includes community outreach, preparation of the Environmental Impact Repmis (EIR) and the Transportation Improvement and Mitigation Project (TIMP) studies, and public hearings with the Plam1ing Commissions. The Planning Department could start fewer updates each year for the next few years, which would allow the Department to phase in or gear up to the l 0-year update cycle. More specifically, in a report dated January 2, 2008 the Plamling Department advised that adequate staffing and funding and a commitment from the Council was needed to provide adequate financial resources on a long term basis for updating the Community Plans. In 2008, Plmming and the CAO developed an annual cost for the first five years to update the Community Plm1s. The estimates, however, are nearly three years old, and these costs may have increased, taking into account changes in salaries and costs for contractual services. Planning staff is working on revised estimates. The 2008 estimates range from $3.2 million in the first year to update seven Community Plans to $5.6 million to update twelve Community Plans in the fifth year (Attaclm1ent A). 3. Is it possible that certain Community Plan updates in which there are few changes to be made would have lower costs? Certain Community Plans will not have very many changes even after ten years. Therefore, the costs to update those Plans would not be as high as other plans with more changes. However, at this time it is difficult to determine which Plans would necessitate minimal rather than significant updates. BACKGROUND Plmming Department Report On October 27, 2010 the Plmming Department issued a report relative to the concept of updating the Community Plans. The report indicated that it costs between $2 million to $2.25 million to update one

4 - 4- Community Plan. There are 35 Community Plans in the City, and if the proposed Charter amendment were passed by the voters 31 of those plans would immediately be out of compliance, since those plans have not been updated in more than ten years (Attachment B). Timetable to Update Community Plans In its report, the Planning Department proposes a seven year phased approach to update the City's 35 Community Plans, assuming voters approve the proposed Charter amendment in the spring of According to the proposal, all ofthe Community Plans would be updated by July 1, This phasing approach would enable the Council to adopt all 35 Community Plan updates at a completion rate of five Plans per year. After 201 8, the Plans would be updated every ten years. The total cost to update all 35 Commmlity Plans would be between $70 and $79 million. State Law As indicated in the Motion (Garcetti-Reyes-Krekorian), State law requires local govemment planning agencies to prepare a General Plan. However, State law is silent as to how often General Plans must be reviewed or revised, with the exception ofthe Housing Element which must be updated every five years. Section 65103(a) ofthe State Government Code states as follows: General Plans "Each planning agency shall... Prepare, periodically review, and revise, as necessary the General Plan." A General Plan is a plmming regulatory guide for cities or counties. In Los Angeles, the General Plan is recommended by the City Planning Commission and adopted by the City Council. General Plans consist of several elements consisting of the following: Framework Element Land Use Element. Air Quality Element Conservation Element Housing Element Noise Element Open Space Element Public Recreation Plan Safety Element Transportation Element Land Use Element The Land Use Element of the General Plan consists of 35 Community Plans, which are the official guides to the future development of the City. The Community Plans ensure that sufficient land is designated which provides for housing, commercial, employment, educational, cultural, social and aesthetic needs ofthe City' s residents.

5 - 5 - Community Plan Update Frequency The City's Municipal Code and Charter are silent as to the frequency of Community Plan updates; however, the Plam1ing Department in the past began to update them every ten years, but has not done so recently due to budgetary constraints. The Planning Department indicates in its report that the State's Office of Planning and Research (OPR) notifies cities or counties when their General Plans have not been revised within eights years. When the updates have not taken place in ten years, OPR notifies the State Attorney General. These notifications serve as reminders to the local government agencies to begin a comprehensive review of their General Plans. RECOMMENDATIONS This is an informational report. Note and file. FISCAL IMPACT STATEMENT There is a potential impact to the General Fund of approximately $5.6 million ammally if either the Council or voters determine that the Community Plans should be updated every ten years. The City Planning Long Range Planning Fund is expected to generate approximately $1.5 million annually to pay for direct and indirect costs associated with long-range planning, including the update of the General Plan and Conummity Plans. However, at this time the exact amount of the offset for Community Plan updates is not known. If additional fees or taxes are imposed to pay for updates to the Community Plans, then the impact to the General Fund would be decreased. Attachments GFM:MAS:rme:mmr: C

6 ATTACHMENT A Department of City Planning New Community Plan Development Cost (five years; estimates) Last Revision: December 24, 2007 Fiscal Year Number of Plans per year Number of NCPs in Year Number of NCPs in Year Number of NCPs in Year Plan-specific Costs: Plans in Year 3 ($305,323 each) $915,969 $305,323 $915,969 $1,221,292 Plans in Year 2 ($505,323 each) $505,323 $1,515,969 $2,021,292 $2,021,292 Plans in Year 1 ~$530,323 each) $1,590,969 $2,121,292 $2,121,292 $2,121,292 Sub-total: $3,012,261 $3,942,584. $5,058,553 $5,363, $1,221,292 $2,021,292 $2,1 21,292 $5,363,876 General Support for all plans: GIS Specialist (GIS data & mapping) $66,721 $66,721 $66,721 $66,721 Systems Analyst II (computer & modeling) $76,559 $76,559 $76,559 $76,559 Mangement Analyst II (ad min support) $75,095 $75,095 $75,095 $75,095 Graphics Designer II (2raphics & present.) $60,110 $60,110 $60,110 $60,110 Sub-total: $278,485 $278,485. $278,485 $278,485 Total Annual Cost: $3,290,746 $4,221,069 $5,337,038 $5,642,361 $66,721 $76,559 $75,095 $60,110 $278,485 $5,642,361 New Community Plan Cost- per Plan Year1 Year2 Year3 Full-time staff per plan: City Planning Associate $86,15.2 $86,1 52 $86,152 Planning Assistant $67,180 $67,180 $67,180 Supervision & support City Planner (1/2 time per plan) $50,324 $50,324 $50,324 Overtime (workshop, focus group, etc.) $25,000 $25,000 $25,000 Other Expenses (mailing, etc.) $10,000 $10,000 $10,000 Technical Work: Traffic Impact Mitigation Program (TJMP) $225,000 Environmental Impact Report (EIR) $200,000 Traffuc Impact Nexus (TIN) Fee Study $66,667 $66,667 $66,667 Total $530,323 $505,323 $305,323

7 ATTACHMENT B Last Updates to CitY of Los Angeles Community Plans December 6, Granada Hills-Knollwood 10, 1996 Arleta-Pacoima November View Terrace-Shadow Hills-East La Tuna Can West Adams-Baldwin Hills-Leimert 1998 Sherman Oaks-Studio C uca Lake-Cahue Pass 1998 Brentwood-Pacific Palisades 1998 orth Sherman Oaks 1998 ts November Encino-Tarzana December San Pedro March June June Westwood n November March March Venice Central North Wilshire Central