CAO Recommends Eliminating Department of Cultural Affairs

In a document dated March 18, 2011, City Adminstraive Officer, Miguel A. Santana recommends eliminating the Department of Cultural Affairs to save the City $10,708,000.

Please attend the Budget and Finance Committe Meeting, Monday, March 21, 9:00 am, City Hall, Room 340, Agenda Item 9.

Here’s an excerpt from “Current and Future Opportunities to Strengthen City Government” pages 95-98 (I recommended reading the rest of the 219 page document so you can see what else he is proposing to elimnate.)


Objective: Support and generate cultural activities and experiences for the
residents of and visitors to the City of Los Angeles

Maximum Savings/Revenue(1) $10,708,000
Value of Proposal $10,708,000
(Savi ngs/Reven ue)
(1) Basis for Maximum Savings/Revenue: Estimated Value of an amount equivalent to a one percent Transient Occupancy
Tax for 2011·2012

Suspend the Special Appropriations l.ll and III in 2011-2012 or
Eliminate the Department of Cultural Affairs and transfer the Public Arts Program
to Public Works.

Central Questions:
• Is Cultural Affairs a core service for the City of Los Angeles?
• Should the City maintain both grants and Cultural Facilities?
• Should one percent of Transient Occupancy Tax revenues continue to serve as a
dedicated revenue stream to support cultural activities?
• Should the Public Art Program and the Arts Development Fee be continued?


A. Findings/Issues (including cost savings/revenue)

Option 1 Suspension of Special Appropriations l.ll and III

The 2010-11 adopted Budget includes $3,953,412 for Special Appropriations I, II
and III to fund grants and special events throughout the City. The Department of
Cultural Affairs Grant Program, has funded various public, private and non-profit
organizations through grant awards to provide free or low-cost local events such as
dance and music concerts and classes, film festivals, museum programs and
theatrical plays and workshop events for youths and adults.

It is recommended that the Cultural Affairs Grants Program be suspended for the
2011-12 fiscal year. This would result in potential savings of approximately $3.9
million. Cultural Affairs should also be instructed to notify all present and potential grant recipients of the planned elimination of the Cultural Affairs Grants Program in

The Cultural Affairs Grants Program is assigned four support staff: one Arts
Manager III, one Arts Manager II and two Arts Associate positions. Two of the
positions are currently unauthorized and unfunded. The Department has funded the
positions through salary savings from vacancies. Full year direct salary costs for the
four positions are: $302,000. If the grant program is eliminated, the Department’s
salary account should also be reduced by this amount.

Service Impacts

The elimination of the grant program will impact the ability of Arts organizations to
provide cultural programming for the residents of Los Angeles. It will also result in
the elimination of the Council Civic Funds, funding for partnered Cultural Facilities
and Watts Tower Conservation.

C. Program/Positions to be Transferred

D. Program/Positions to be Eliminated

One Arts Manager III, One Arts Manager II and two Arts Associates positions.
The Special Appropriations to the Department include Council discretionary funds
($270,000), Funding for the Public-Private Partnership facilities ($182,000), Watts
Tower Conservation ($150,000) and programming for festivals and Heritage month
celebrations ($175,000).

E. Implementation Plan

• Cultural Affairs shall immediately notify all grantees and potential grantees that the
Grant program is suspended.
• Cultural Affairs to identify any funds already obligated for expenditure and encumber
only those funds.

Option 2-Elimination of the Department and Transfer of Public Art Function

The Department of Cultural Affairs is funded through an amount equal to a one
percent Transient Occupancy Tax and a General Fund subsidy for related costs. If
the Department is eliminated in 2011-12, the General Fund savings will be $10.7
million. This would result in the elimination of the grants program, as well as the
elimination of Department supported operations.

The Department is also charged with administering the Public Art Program funded
from the Arts Development Fee. The purpose of the Arts Development Fee is to
provide cultural and artistic services for non-residential development projects over
$500,000. Use of the Arts Development Fee is highly restricted. If the program is
canceled, approximately $6 million will need to be refunded to developers who paid
the fee.

If the Public Art program is not eliminated, the program should be transferred to
Public Works. The direct cost for the three positions that support the Public Art
Division is $242,500.The Commission on Cultural Affairs would also be transferred
to the Public Works. There is currently one funded position (Architecture Associate)
that supports the Commission at a cost of $91,000 and an unfunded clerical support
position ($59,700) which is funded through salary savings. An appropriation would
need to be made to the Public Works to support these positions.

Proposition K has provided funding for seven cultural facilities within the
Department’s purview. Three of the projects are currently operated by the
Department (Watts, Canoga and Sun Valley Junior Art Centers), one project is
completed, but not operational (Lincoln Heights .Junior Art Center), one project is
under construction (Manchester Junior Arts Center) and two projects are in
development (Vera Bradley and Highland Park Junior Art Centers), If the
Department is eliminated, the City still has an obligation to the taxpayers to provide
services at these facilities. The facilities need not be operated by the City.
Programming can be provided by a contractor.

In addition, the Department has an operating agreement with a non-profit for the
Nate Holden Performing Arts Center and currently partners the operation of six art
centers. The contracts for the six partnered facilities have expired and the City
Attorney has previously advised the Department to release a Request for Proposals
(RFP) for these facilities. The process is expected to be completed by January 2012.
In the interim, the facilities are operating on a month-to-month basis.

If the City elects keep the facilities open, partnering the facilities is a viable option.
This Office is currently developing an RFP to continue and expand partnering at
Cultural Affairs facilities. The model that is being developed provides non-profits the
opportunity to provide cultural and art programming using City facilities. The
contractors would be required to pay certain expenses, such as custodial and
utilities, while the City would provide the facility and a stipend. The savings would
include the salary and related costs of the employees working in the art centers. In
2009-10, the City eliminated 15 positions at the 15 facilities proposed for partnering.
Positions that were eliminated through ERIP were also eliminated for a savings of
$1.1 million in direct salary costs. However, Council has authorized the removal of
five facilities from the RFP. Funding will need to be identified through the budget
process for these facilities. The City received the majority of savings from the
elimination of positions at Barnsdall Park. Funding in the amount of $750,000 is has been requested from the Department to continue operations at the five facilities that
were removed from the RFP.

B. Service Impacts

Closure of 20 cultural facilities, including art centers and theaters.

C. Program(s)/Positions to be Transferred

Transfer the Public Art program staff of One Arts Manager Ill, One Arts Manager II,
One Arts Manager I and an Architecture Associate to Board of Public Works or the
Bureau of Engineering. Positions are partially funded by the Arts Development Fee.

Transfer support for the Cultural Affairs Commission to the Board of Public Works.
Staffing to be provided by Public Art staff. There is currently one Architectural
Associate position and an unfunded Senior Clerk Typist supporting the Commission.

Transfer the Community Art Partners program to the Recreation and Parks
Department to coordinate the seven facilities currently partnered and the Proposition
K funded projects. The Program is currently overseen by an Art Manager III. The
position is currently not funded and paid for with salary savings.

D. Program(s)/Positions to be Eliminated

The elimination of the Department would result in:
– The deletion of 38 positions, 34 if the Public Art program is transferred.
• The elimination of the City’s Community Art Program

E. Implementation Plan

• Ordinance change to eliminate one percent of Transient Occupancy Tax funding
for the Arts and Cultural Facliities and Services Trust Fund
• Ordinance change to eliminate Arts Development Fee requirement or Ordinance
change to effectuate transfer to the Board of Public Works
• Approval of deletion of either 34 or 38 positions.
• Approval of closure of up to 20 cultural facilities
• Development of an operational plan for the seven Proposition K facilities and six
Art Centers which are currently partnered.

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