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 (937K)

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).

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.

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.

Taxes are collected for three types of utilities: electrical, telephone, and natural gas. Taxes are not collected for water usage. Electrical use tax is collected by the Department of Water and Power and the natural gas use tax is collected by the Southern California Gas Company. The various telephone companies operating in the City collect telephone taxes. Utility users tax accounts for 18% of the general fund and 13% of the total operating budget.

The Gas tax is an important component of the total utility users tax. The City, however, cannot release data on the gas tax. Provisions of Revenue and Taxation Code §7056 prohibit the City from providing data obtained from private utilities.

Franchise income is received from several sources, including gas pipelines, cable television, wastewater, official police garages, taxi cabs, and several others. Each individual source is analyzed below and methodologies for each are provided. In FY 1998-99, the City received $9,934,000 in franchise fees. Franchise Income accounts for less than 1% of the general fund and less than 1% of the total operating budget.

This revenue source is directly affected by the strength of the housing market and the types of housing built. In FY 1998-99, two housing projects in West Los Angeles, each consisting of nearly 200 units each, heavily weight the revenues from this source toward the Los Angeles area. Likewise, a single project containing 57units in the Harbor generated a large tax payment that produced a larger proportion of the total revenues in this fund compared to other funds. If single-family development predominates in the Valley and multi-family development in the City, more Residential Development Tax revenue will continue to be attributable to the City . Table 25 provides the results of this analysis.

Address level data were obtained from the Department of Water and Power billing system for sewer fees in FY 1998-99. Data extracted from the database were Sewer Service fee charges for each property and property address. Addresses were geocoded as described earlier using the Code 1 software. One study area was then assigned to each property with the GIS and sewer fees were summed by area. Proportions of the Citywide total were then calculated. Proportions would have been rounded, but this resulted in a sum less than the total revenues collected. As a result, percentages for this item were taken to two decimals.

Industrial Waste Quality Surcharge

A surcharge to treat industrial waste is charged against businesses that produce extra- strength quality sewage. The fee is based on the proportion of flow and strength placed in the waste treatment system. There are 271 accounts that pay the industrial waste quality surcharge and five of those accounts pay approximately 38% of total surcharge collected. One account, located in the San Fernando Valley, accounts for nearly 25% of the total surcharge collected. The Bureau of Sanitation provided geographic data for the source of surcharge revenues. The Bureau determined the number of surcharge accounts in each area. The actual revenues from the top five accounts paying the fee were determined geographically and subtracted from the total surcharge payment in FY 1998-99. The remaining surcharge revenues were then split geographically by the number of accounts per geographic area. Revenues from the top five accounts were then added to this value to determine the total revenues per study area.

The Department of Transportation collects parking meter revenues. Parking meters are assigned to one of 70 parking meter zones. Of these, 10 are located in the San Fernando Valley and 2 are located in the Harbor area. The remainder are located in Los Angeles. There are 41,185 parking meters in the City.

Revenues are collected by parking meter zone. Review of the geographic boundaries of all parking meter zones showed that all 70 zones are entirely located within one of the three study areas. As such, summary reports from the Department of Transportation indicating the year-to- date revenues for FY 1998-1999 were analyzed for parking meter revenues (Table 43). Data for off-street parking lots (Table 43) are available on a lot-by-lot basis. Each off-street parking lot was geocoded by lot address as described above. Geographic areas were then assigned to each lot and the sum of all lots in each area was determined.

Interest income was distributed to each geographic study area based on the same proportions as the percent of receipts.

Table 48 Supplemental Law Enforcement Services Fund, Estimated Revenues, FY 1998-99
Area	Percent of Revenues	Actual FY 1998-99 Revenues
San Fernando Valley	35%	$3,027,576
Los Angeles	61%	$5,276,632
Harbor	4%	$346,009
Subtotal	100%	$8,650,217
Cash Balance		$429,359
Total		$9,079,576

Coastal Transportation Corridor Trust Fund

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