When business improvement districts in California are created, it’s required by the Property and Business Improvement District Act of 1994 at §36622 to file a so-called management district plan (MDP) with the City. This is meant to describe exactly what the BID is going to spend its money on, and it’s incorporated into the City’s Ordinance of Establishment, by which means the BID is created. It must be approved by the City Council, and the City has the power to revise it at will. The law makes it pretty clear that BIDs are actually forbidden from spending money on activities that aren’t in the MDP, although this facet of the law is generally ignored by the City.
And I’m presently working on a project that requires a close reading of invoices submitted by Tara Devine1 to the South Park BID over the years, which I obtained last month as the fruit of a CPRA request.2 Although 2012 is outside the timeline I’m working on, I was fascinated to note that Tara Devine seems to have been engaged by the South Park BID to actually write that year’s annual planning report3 for them. One of the things that she billed for in the course of performing her contract to do so Tara Devine billed for was a conversation with accounting firm RBZ, since merged with Armanino, and the subject of that conversation was wholly new to me:
Closeout conversation on 2012 Annual Report and discussion of City Atty opinion that budgets can no longer vary from management district plans without amendment (elimination of 10% variation).
In one sense, the opinion is not surprising. After all, the Property and Business Improvement District Law is quite clear on this matter. At §36625(a)(6) the law says:
The revenue from the levy of assessments within a district shall not be used to provide improvements, maintenance, or activities outside the district or for any purpose other than the purposes specified in the resolution of intention, as modified by the city council at the hearing concerning establishment of the district.
At first glance this doesn’t say anything about the MDP, but actual resolutions of intention include the MDP as part of the ordinance. For instance, here’s a recent example,4 which states, as they all do:
Sec. 5. IMPROVEMENTS AND ACTIVITIES. The City Council hereby declares that the proposed activities and improvements to be funded by the levy of assessments on property within the District are detailed in the Management District Plan. They include, but are not limited to, Clean & Safe Programs, Administration & Management and, Marketing & District Identity
The law, then, is clear that the BID can’t spend money on anything that’s not in the MDP. So the fact that the City Attorney told this to BIDs is consistent with the law. But of course, if you follow this blog you’ll know that what the law requires the City to require of its BIDs is often far removed from what is actually required. So given that the City currently refuses to hold BIDs to their legal obligations, in this case the California Public Records Act, compliance with which by BIDs is mandated by the Property and BID law §36612, it’s quite surprising that the City Attorney opined sometime in 2012 or earlier that BIDs actually had to stick to spending money on activities present in their MDPs.
It’s also surprising that, prior to this 2012-or-earlier decision, the City evidently let the City get away with a 10% deviation. It’s my impression that City oversight of BIDs gets progressively weaker over the years rather than stronger. So then, the next questions to be answered given this new information are, then, why has the City not cut off funding to the Historic Core BID given executive directrix Blair Besten’s well-known propensity for lobbying the City for all kinds of nefarious things even though no such thing is listed in their MDP? Why has the City not cut off funding for the San Pedro BID given executive directrix Lorena Parker’s well-known propensity for interceding on behalf of criminals with the City in order to get the charges to go away? Get to it, City Clerk!
The image of shadowy BID consultant Tara Devine at the beginning of this post is Ä2017 MichaelKohlhaas.Org. It was made from this picture of Tara Devine, taken from this website advertising an apparent Tara Devine side project. The words in her mouth also came from that website, but we’re interepreting them slightly differently than, perhaps, she intended.
- You can get the whole spool of invoices from Archive.Org, but be careful as it’s a 15MB PDF.
- You’ll read about the project here when it’s finished, probably about the middle of this week. If you’ve been following my posts on the matter you can probably figure out what it is.
- The annual planning report is another requirement of state law, here found in the Property and Business Improvement District Act of 1994 at §36650. It’s like an annual update of the MDP, listing what the BID plans to spend the next year’s money on. It’s also legally a mandate in the sense that the law prohibits BID money to be spent on activities that aren’t described in the APR.
- Having to do with the recently renewed South Park BID; be careful as it’s a heavyweight PDF.