City Of Los Angeles Geographic Revenue Analysis For Fiscal Year 1998-1999

Note this file was converted to html from a word document provided through the Harbor Study Foundation from LA City 12-18-00 and Indexed

Preliminary data was released December 2000 and the final report in February 2001. The changes between the Draft and the final version as marked green strikeout for deletions and red for insertions. Grammatical and layout changes are ignored

Here is a file showing only the changes and here is the full final file in word format (532K)

TABLE OF CONTENTS

1 Introduction
Background
Limited Focus of this Study
Summary

2 Methodology

3 General Fund Revenues

4 Special Purpose Revenues

5 Additionally Budgeted Funds

6 References

Summary of City Revenues by Source Region, FY 1998-1999

LIST OF MAPS

Geographic Study Areas The report failed to include a map, we have linked the map from the petition.

SECTION 1

INTRODUCTION

On February 4, 2000, City Council approved a report from the Office of Administrative and Research Services (OARS, formerly the City Administrative Officer, CAO) that directed the OARS, Office of the Chief Legislative Analyst (CLA), City Clerk, and City Controller to prepare a report that evaluates City revenues and expenditures by zip code (CF# 99-1204).

This report provides an analysis of general fund, special purpose fund, and several additional budgeted revenues for fiscal year 1998-99, the last year for which actual revenue data are available. Revenue data contained in this report are correlated to FY 1998-99 actual data as reported in the City of Los Angeles Budget for the Fiscal Year 2000-2001 and additional budget documents, such as the Consolidated Plan for program year 1998-99 and the Community Redevelopment Agency’s Report on Agreed-Upon Procedures Related to Five Years Revenue Projection and Related Information.

This study looks at a very narrow question of how much revenue originated from various areas of the City of Los Angeles in FY 1998-99. It is a snapshot of a single year and only evaluates why those areas produced those revenues that year. It does not attempt to determine the potential future revenues and does not attempt to determine how pending decisions about the City would affect future revenues. Where issues concerning future revenues arise, note is made of these issues but no detailed analysis is provided.

BACKGROUND

No formal study of this nature has been previously prepared and presented to Council. Individual revenue funds have been analyzed at the geographic level, but no study has been prepared that includes every City revenue source with detailed, account level data. In 1996, the Daily News reported on an analysis that considered evaluated the San Fernando Valley portion of many City revenue sources. In that analysis, the valley was determined to generate 32% of the City’s revenues. The analysis did not evaluate revenues from the Harbor any other area of the City. This study, then, is the most current analysis of the regional source for City revenues.

No formal study of this nature has been previously prepared and presented to Council. Individual revenue funds have been analyzed at the geographic level, but no study has been prepared that includes every City revenue source with detailed, account level data. In 1996, the Daily News reported on an analysis that considered many City revenue sources. In that analysis, the valley was determined to generate 32% of the City’s revenues. The analysis did not evaluate revenues from the Harbor. This study, then, is the most current analysis of the regional source for City revenues.

The Council request relative to this report gained the attention of the Local Agency Formation Commission (LAFCO), which has expressed an interest in the results of the analysis. LAFCO is currently preparing an analysis of City revenues and expenditures as part of the secession efforts in the San Fernando Valley and Harbor areas. LAFCO has expressed an interest in evaluating and possibly using the results of the City’s analysis.

The Council action originally requested an analysis by zip code. This analysis, however, focuses on the geographic regions for the secession study areas, the San Fernando Valley, Harbor, and remaining City. Alternate geographies were selected for this study due to issues relating to geographic consistency and data consistency.confidentiality issues. Several revenue sources are generated from service districts that are designed to address specific service needs. Often, these service areas cross zip codes and most other geographic boundaries because the service needs differ from the reasons these other boundaries were created. To ensure that results can be compared among all revenue sources, careful selection of the study areas was necessary. The secession areas were selected as the study regions for this report because these areas produce the greatest degree of geographic consistency among areas available for study. They are large areas and many City programs are currently designed to serve these areas. This allows for geographic consistency and the most reliable comparison of these various data sources.

In addition, confidentiality issues require that data be aggregated in ways that will not divulge information about specific businesses. With regard to several revenue sources, such as the transient occupancy tax and the business tax, aggregating data by zip code would reveal information about specific businesses. Alternate geographies were evaluated to identify a geographic area that would ensure the confidentiality of data regarding specific businesses. The secession areas were the most effective geographic area for this purpose.

Two geographic areas are currently considering secession from the City of Los Angeles. If successful, this would reconstitute the City of Los Angeles into as many as three independent, incorporated cities: the City of Los Angeles, the San Fernando Valley, and the Harbor area. Figure 1 generally shows these geographic areas. As a result of the LAFCO study, these geographic boundaries could change, though no alternative boundaries are currently available or under consideration. If alternative areas are proposed, additional analysis should be conducted to incorporate those changes into this analysis. Since Hollywood has recently qualified for consideration as an additional secession area, future versions of this study should could be revised to account for this additional geographic change to the City, though the issue of geographic consistency will make this extremely difficult.

Assessing data based on the proposed secession areas satisfies two issues. First, the problem of geographic consistency is resolved, in that the secession areas are fairly large and few service area boundaries cross these boundaries. In addition, many City programs are designed to serve the Valley and the Harbor areas. The service areas, and revenues generated based on these services, naturally align to the proposed secession areas. Second, the LAFCO is currently evaluating revenues and expenditures for the proposed secession areas. Data from this evaluation of City revenues can be used by LAFCO in the preparation of their study if they so choose preservation of tax payer confidentiality is maintained at this geographic level of data aggregation.

This analysis evaluates revenues generated in Fiscal Year 1998-1999, the most recent year for which actual revenue data are available. This reference year matches the reference year to be used in the Comprehensive Fiscal Analysis under preparation for LAFCO to evaluate the economic impacts of San Fernando Valley and Harbor area secession. In some cases, FY 1998- 99 data are not used and explanations are provided if this is the case. For example, the County Tax Assessor used FY 1999-2000 data to prepare a report that distributes property tax geographically within the City. Rather than conduct an independent analysis for another fiscal year, the County’s report was incorporated here and evaluated for accuracy.

LIMITED FOCUS OF THIS STUDY

This analysis attempts to describe the geographic source of FY 1998-1999 revenues within the City of Los Angeles and to explain, where possible, why these areas generate these revenues. The intent of this study is to show the geographic character of FY 1998-1999 City revenues, not to provide a full analysis of the revenues each area would generate in the event of secession or resulting from other legislative or economic actions. Where issues that could affect future revenues arise, comments are provided that could be considered in a study of such revenue impacts.

Evaluation of future revenues involves a wide range of assumptions that are not appropriate for this report. Any changes in the tax, fee, and permit structures, in land use and zoning designations, in local, state and federal legislation or program implementation, or in economic conditions could alter the outcome of this analysis. In addition, the amount of revenues generated in many funds is dependent upon many factors, including the health of the economy, the real estate market, and tourism. Since this report only evaluates FY 1998-99, these data may not represent an average year for revenue receipts and may not be an accurate guide to future revenues.

Finally, many revenues are fee-for-service receipts. Such receipts are collected to cover the cost of service delivery for very specifically designated services. But fees collected may cover less than the full cost of service delivery under every circumstance. Economies of scale achieved across the entire City may not translate to an equivalent cost of delivery in discrete units of the City. Any analysis of these data must carefully consider the context under which the fees collected reflect the actual cost of service.

SUMMARY

Table 1 shows the estimated geographic source of revenues received by the City of Los Angeles in Fiscal Year 1998-99. This includes general fund revenues, special purpose fund revenues, and several additionally budgeted revenues. These revenues are based on Actual receipt figures available in the City of Los Angeles budget, the City’s Program Year Consolidated Plan, the Community Redevelopment Agency budget, and other budgets as appropriate. Additional off-budget revenues were not evaluated in this analysis, as described in Section 4 of this document. Additionally budgeted revenues are those receipts that are collected through a process independent of the City’s operating budget reported in the City of Los Angeles Budget for the Fiscal Year 2000-2001. These include the Consolidated Plan and the Community Redevelopment Agency revenues.

1 Each of these items consists of revenues that are not allocated geographically. These items are provided in this table to balance between this report and the FY 1998-99 actual revenue reported in the City of Los Angeles Budget for the Fiscal Year 2000-2001. See Tables 3, 27, and _____ for detailed explanations of these line items.

To Main Index