Building on this goodwill and momentum, we have made significant progress in our efforts to improve just about every aspect of FilmL.A.’s operations. We recently implemented new training programs, expanded our customer satisfaction surveys and began development of customized, state-of-the-art permitting software. We’re working on these and other initiatives as we continue to fulfill our core functions of providing expert, one-stop permit processing, neighborhood notification, data gathering/reporting, troubleshooting and dispute resolution for the world’s highest volume production region.

We want to thank everyone for supporting FilmL.A. and the work we do. We're proud of the steps we've taken to retain local production, and we're committed to continuing to improve our service to the industry, our government clients, and the communities that host on-location production.

Steve MacDonald
President

As illustrated below, our customers report significant year-to-year improvement by FilmL.A. in every category measured. The improved scores are the result of many important operational adjustments. Our staff has done a great job, but we recognize that there is more to be done.

Survey Question	2005	2006 YTD	Change
Key personnel are accessible	6.8	8.0	+ 1.2
Deliver prompt and accurate responses	6.3	7.7	+ 1.4
Meets agreed upon deadlines and commitments	6.6	8.2	+ 1.6
Understands my needs and priorities	6.7	8.6	+ 1.9
Timely resolution of issues	6.3	8.2	+ 1.9
Honest and forthright communication	6.9	8.6	+ 1.7
Follows through on agreed-upon requests	7.2	8.8	+ 1.6
Staff collaborates with me to solve problems	7.1	8.6	+ 1.5
Staff is courteous and cooperative	7.8	9.2	+ 1.4
Demonstrates appropriate level of flexibility	6.6	8.7	+ 2.1
Staff uses creative strategies	6.5	8.4	+ 1.9
FilmL.A. is an efficient organization	5.4	7.6	+ 2.2
AVERAGE RATING	6.7	8.4	+ 1.7

All scores based on a 1-10 scale.

We are committed to continual improvement and wish to identify and implement as many service enhancements as possible. We welcome your comments and suggestions as we explore new ways to improve the quality of our service.

When pilots are produced elsewhere, there is an immediate and measurable loss of jobs and revenue. It is estimated that the production shift away from Los Angeles this year cost the local economy thousands of jobs and as much as $70 million in production spending. This figure is based on industry average costs of $4 million to produce a one-hour pilot and $2 million to produce a half-hour pilot.

Over the long-term, such losses are a sign of the L.A. region’s diminishing competitive advantage. It is no coincidence that the regions that have had the most success luring production away from L.A. are the ones that have implemented significant tax incentives. These incentives, combined with a growing critical mass of production infrastructure and talent, enable other regions to attract a rapidly growing share of all types of production. While L.A. remains the world’s entertainment production capital, it is becoming clear that we can no longer take this status for granted.

BUSD Assistant Superintendent for Business Activities Steve Bradley pointed to FilmL.A.’s experience and expertise, along with the ongoing need to fund school programs, as key factors behind the Board’s decision. “Teaming up with FilmL.A. will help the District work more efficiently with the production community, and in turn generate more revenue for schools and student programs,” he said.

Since 2002, FilmL.A. has handled on-location film permits for the Los Angeles Unified School District’s 800-plus facilities. During that time, we have helped the District expand the number of campuses that host production twelve-fold (from 19 to 250 campuses).

Proper notification is essential to balancing the needs of the production community with the concerns and expectations of the neighborhoods that host on-location production. FilmL.A.’s recently expanded notification process enables us to resolve many neighborhood concerns even before production activity begins.

What is truly striking is the relatively low number of complaints and high number of positive comments we receive. In the first quarter of 2006, FilmL.A. coordinated 13,885 days of filming, receiving 545 complaints and 427 positive comments. That's 3.9 complaints, and 3.1 positive comments, per every 100 permitted production days.

Feature Films:

Television Programs:

Commercials (by Product/Brand):

We are also grateful to Los Angeles Mayor Antonio Villaraigosa and Councilmember Wendy Greuel for championing a measure to eliminate use fees for filming at most City-owned property. The measure was approved by the City Council on July 25, 2006. We commend our elected representatives for this gesture of support for Los Angeles' signature industry. We look forward to sharing more details about the fee waiver when they become available.

Tracy joins the FilmL.A. team with more than a decade of senior level management experience. He previously served as director of corporate business development & strategy for Warner Bros. Entertainment. During his five years at the studio, he spearheaded a range of initiatives to optimize business operations. He also served as vice president of public affairs for the Alliance of Motion Picture & Television Producers (AMPTP) and manager of local government relations/public policy for the California Association of Realtors.

About FilmL.A., Inc. Founded in 1995, FilmL.A., Inc. is a one-of-a-kind private, nonprofit corporation that works on behalf of film, television and commercial producers, Los Angeles-area residents and local government to sustain the Los Angeles region's status as the global leader in media production. FilmL.A. provides expert, one-stop permit processing and related services for the City of Los Angeles, unincorporated sections of Los Angeles County, Diamond Bar, South Gate, the 800+ facilities of the Los Angeles Unified School District and the Angeles National Forest.