For one thing, these bylaws reveal that, unlike every other BID that I know of, the property owners in the Fashion District elect their Board of Directors by direct weighted vote.1 Most BIDs seem to be run by self-perpetuating boards, in which the directors choose their successors without any input from anyone else. This is interesting, and may save the FDBID from the kind of stagnation and undue staff influence that one finds in so many of our local BIDs.2
Maybe you’re familiar with §54954.1 of the Brown Act, which requires BIDs1 to notify anyone in advance of their meetings and send them agendas and other materials at the same time this material is distributed to the BID’s board.2 Another crucial bit is found at §54954.2(a)(1), which requires posting of agendas on BIDs’ websites.3
Yesterday evening, BID-lawyer-to-the-stars Jeffrey Charles Briggs passed along almost 200 emails between Media District BID executive director Lisa Schechter and various people at the City of Los Angeles. These are available en masse at Archive.Org. As always, there’s a lot of chaff in there and a few super-interesting things.1 Perhaps today’s story is an example of the latter.
It began on February 28, when Rita Moreno, newly of the Neighborhood and Business Improvement Division of the City Clerk’s office, the unit that’s meant to oversee the operations of BIDs and make sure that they follow the law and stuff, emailed a bunch of BIDdies to introduce herself and note that only a few of them had their meeting times posted on their websites. Of course, the Brown Act explicitly requires BIDs to notice their meetings on their websites,2 but that’s actually not why Rita was on about this. She was just trying to find out when they met so that she could attend. In fact, it’s not even clear that Rita Moreno knew about the Brown Act requirement.
However, the very next day, our old friend Lisa Schechter of the Hollywood Media District BID, who is not generally known for her law-abiding behavior but who has by now been educated by years of our intense scrutiny to the point where, I hope, she’s beginning to realize that it’s just easier to follow the law,3wrote back to Rita Moreno, fishing for praise from this unlikely authority figure:
Just to reiterate, all of our meetings are posted in accordance with the Brown Act (Committee as well as Board) – Further you have been placed on our automatic distribution list which triggers and [sic] email directly to you for all of our meetings. If you should require any further information please do not hesitate to contact myself or our operations manager, Jim Omahen.
One requirement that the Property and Business Improvement District Law places on BIDs, found at §36650, is the submission of annual planning reports (“APRs”) to the City Council:
The owners’ association shall cause to be prepared a report for each fiscal year, except the first year, for which assessments are to be levied and collected to pay the costs of the improvements, maintenance, and activities described in the report. … The report shall be filed with the clerk … The city council may approve the report as filed by the owners’ association or may modify any particular contained in the report and approve it as modified.
And it seems that the BID isn’t allowed to spend money on stuff that’s not discussed in the APR, so it’s not a trivial matter.
The way this piece of code plays out in Los Angeles is that, first, a BID director submits the APR to the Clerk along with a formulaic cover letter. For instance, here is the one submitted by Nicole Shahenian on December 30, 2014 to accompany the East Hollywood BID’s APR for 2015. This is essentially the same letter submitted by all BIDs:
Dear Ms. Wolcott:
As required by the Property and Business Improvement District Law of 1994, California Streets and Highways Code Section 36650, the Board of Directors of the East Hollywood Business Improvement District has caused this East Hollywood Business Improvement District Annual Planning Report to be prepared at its meeting of December 29, 2014.
And don’t forget that state law requires the City Council to adopt the report either with or without modifications. In Los Angeles this part of the process is initiated by the Clerk sending another form letter to City Council, recommending that they adopt the BID’s APR. It’s my impression that the Clerk doesn’t recommend modifications to the report at this stage. These seem to be handled by Miranda Paster before the APR is submitted to Council, as in this example involving the Media District BID. Anyway, take a look at Holly Wolcott’s January 14, 2015 recommendation to City Council with respect to the East Hollywood BID’s APR. Like every such document, this states:
The attached Annual Planning Report, which was approved by the District’s Board at their meeting on December 29, 2014, complies with the requirements of the State Law and reports that programs will continue, as outlined in the Management District Plan adopted by the District property owners.
And it goes on from there to recommend:
That the City Council:
FIND that the attached Annual Planning Report for the East Hollywood Property Business Improvement District’s 2015 fiscal year complies with the requirements of the State Law.
ADOPT the attached Annual Planning Report for the East Hollywood Property Business Improvement District’s 2015 fiscal year, pursuant to the State Law.
This turns out to be a huge problem for a number of unrelated reasons. First and most simply, the CCEA is a nonprofit 501(c)(6) organization. Unlike the more famous 501(c)(3) organizations, 501(c)(6) groups are allowed to engage in lobbying, but it’s unclear whether they’re allowed to support candidates for office.1 However, irrespective of any restrictions on donations, there are very clear reporting requirements.
Take a look at the CCEA’s 2015 tax form. In particular, take a look at question 3 of part IV, found on page 3 of the form. It asks unambiguously:
Did the organization engage in direct or indirect political campaign activities on behalf of or in opposition to candidates for public office?
And, as you can see in the image that appears somewhere near this paragraph, the CCEA unambiguously stated that they did not. It’s hard to imagine a less ambiguous form of direct political campaign activities than giving actual money, amirite? Hence I turned them in to the IRS and also to the Franchise Tax Board for this lacuna. Stay tuned in case anything happens!
Here’s the short version of this post: Laurie Sale of the Palisades BID has been telling me for months that she is too busy to work on my CPRA requests. Yesterday she turns out to be too busy to send copies of emails in a reasonable format. She continues to be too busy to provide an estimated date of production even though CPRA requires it. She keeps telling me she only works half-time. BIDs sign a contract with the City which requires them to maintain staffing adequate for the completion of required work in a timely manner. CPRA compliance is required work. Being too busy to do it is not doing it in a timely manner. Too busy for CPRA, BIDs?? Breach of freaking contract!!
And here is a quick recap of how we got to this place. About 80% of the staff of this website grew up in Venice, so we all got really interested in the Venice Beach BID. Unfortunately, CD11 staffie Chad Molnar took offense at the use I made of the fruits of a couple CPRA requests and stopped complying with the law altogether, forcing me to turn him in to the City Ethics Commission. That’s going to take forever to resolve, though.
And finally, yesterday, she condescended to transmit a bunch of emails to me by forwarding them, with her own typed annotations prepended. I had asked for them in native format,2 and providing them in native format is required by CPRA.3 It’s important to get emails this way because it preserves the integrity of the headers and also it ensures that attachments arrive in precisely their native formats as well.4 I habitually request emails in native formats and most BIDs have figured out how to comply with this requirement. So I told Laurie Sale that her forwarded emails weren’t acceptable and could she please figure out how to send them in the right format. I can tell from her headers that she uses Outlook, so I sent her a link to Microsoft Support which explains how to export emails to a PST file. It’s not hard.
OK, where to start? Well, how about with the contract that the East Hollywood BID signed with the City of Los Angeles?1 Right there on pages two and three, in section 2.6(B), it says:
Corporation shall maintain an ongoing liaison relationship with the community. Corporation’s responsibilities encompass the following areas:
B. Newsletters. Corporation shall prepare a District newsletter to be produced on a quarterly basis, at a minimum, and shall distribute this newsletter to all assessed property owners in the District. Corporation may, at Corporation’s option, provide the newsletter by standard mail or electronic transmission. The newsletter will be designed to facilitate and maximize the exchange of information between Corporation, City, and the members ofthe District. Each issue of the newsletter shall be submitted in duplicate to the City Clerk for reference.
So this explains why BID Analyst and City Clerk staffer Eugene Van Cise wrote to Nicole Shahenian, executive director of the East Hollywood BID, one fine day in May 2016:
I have invoices for $387.30, $72,291.74 and 146,852.71. Miranda has rejected payment because of our records indicate that we have not received the following newsletters:
2012: All 4 quarters.
2013: All 4 quarters.
2014: 1st & 2nd quarters.
2015: All 4 quarters.
2016: 1st quarter.
If you have these available, you may email them to me.
Please contact me if you should have any questions.
Add it up, friend! That’s almost $220,000 that Miranda Paster was holding back from the BID because they had failed to perform a clause in their contract for four years straight. This is quite a contrast to what Holly Wolcott told me in March of that year to the effect that the City had no power to make BIDs comply with CPRA even though compliance with CPRA is also a requirement in their contract.