Regular readers of this blog are well aware that business improvement districts in California are subject to the California Public Records Act and to the Brown Act by virtue of the Property and Business Improvement District Law at §36612, which states explicitly that BIDS … shall comply with the Ralph M. Brown Act … at all times when matters within the subject matter of the district are heard, discussed, or deliberated, and with the California Public Records Act … for all records relating to activities of the district.¹

Also, maybe you recall that the standard contract that BIDs sign with the City of Los Angeles contains² a clause basically repeating this requirement. There’s a transcription of this section after the break. So in March 2016, faced with blatant disregard of the CPRA by the Downtown Center BID, I wrote to the City Clerk, Holly Wolcott, asking her to enforce the terms of the City’s contract with this obstructionist BID.

And on March 14, 2016, she wrote back to me, stating pretty clearly that she wasn’t going to make sure that BIDs complied with the Public Records Act. Again, there’s a transcription of her response after the break, but her main argument was that the City wasn’t obligated by the contract to consider whether a given BID was complying with the CPRA.

And I thought that was the end of it, but I just recently discovered that actually, it’s likely that the City took my argument much more seriously than anyone was letting on. So seriously, in fact, that in April 2016 the City Attorney completely rewrote the standard contract between BIDs and the City to eliminate all language about CPRA and the Brown Act!

The other day I got a bunch of emails between Sherri Franklin³ and various people in the Clerk’s office. You can find the whole release here on Archive.Org. Of particular interest today is this email chain, which begins with an April 21, 2016 missive from Clerk BID honcho Miranda Paster to Sherri Franklin stating that “[o]ur City Atty has recently removed a section of the contract relative to the Brown Act and the California Public Records Act”!

Not only that, but Miranda Paster says pretty explicitly that removing this language “… will be beneficial for you and us.” And look! Here’s the contract (careful! It’s a 145 MB PDF) that Miranda Paster was talking about! And it does not contain the section from the old contract about the Brown Act and CPRA!

First of all, it’s crucial to note that this change in the contract doesn’t affect the applicability of CPRA and the Brown Act to BIDs at all. They are subject as a matter of state law, and that can’t be changed by random changes that the City of LA makes in its contracts. Second, it probably doesn’t even change the fact that if a BID violates one or the other⁴ that it’s in violation of its contract. The new contract, as well as the old, contains the following section:

SECTION 18. APPLICABLE LAW, INTERPRETATION AND ENFORCEMENT
Each party’s performance hereunder shall comply with all applicable laws of the United States of America, the State of California, and the City including but not limited to laws regarding health and safety, labor and employment, wage and hours and licensing laws which affect employees.

This certainly binds BIDs to comply with the Brown Act and the CPRA, as they are certainly “applicable laws of … the State of California” But what the change probably does, and I can’t be sure,⁵ is relieve the City of responsibility for making sure that BIDs comply with these laws prior to some indisputable finding, like by a court, that they’ve violated them.

So this newly discovered development suggests to me that the argument that the City had a duty to enforce compliance with the CPRA due to this contractual clause was a good one, anyway, or else why would the City bother to revise their contracts in precisely this manner? Maybe they risked some kind of liability by refusing to enforce it in the one case I asked about but then they turned around and eliminated the liability for the future.

That’s probably enough to explain why, in Miranda Paster’s words, the change “… will be beneficial for … us.” But why is it beneficial for the BIDs? Well, pretty clearly, it’s beneficial in the short term, as it prevents irritating little people like me from getting the City to investigate BIDs for violating the CPRA and/or the Brown Act.

Both the City and the BIDs are very reluctant to have the City act essentially as my personal enforcement mechanism for these laws, especially given that BIDs break them so very regularly. If I’m going to send violation after violation to the City, which I certainly would do if there was any chance they weren’t just going to ignore me, then naturally both the BIDs and the City would prefer that the City not be required to respond to me.

However, this is certainly short term thinking only. In fact, the only remedy under law for violations of the CPRA is to file a petition in superior court.⁶ If the BIDs actually are violating the law, such petitions are going to end up costing them a vast amount of money. If BIDs think they’d rather have petitions filed against them rather than having CPRA cases mediated by the City at no cost, they must be counting on me being unable or unwilling to file such petitions.

Well, obviously, I’m reluctant to file, as no sane person wants to go to court if it can be avoided, but, as it turns out with the City refusing to require its BIDs to follow the law, it cannot be avoided. In fact, I’m much more reluctant to allow BIDs to get away with ignoring their duties under the law. As you probably know if you follow this blog, I’ve filed four petitions to date, all still pending, with pretty many more on the way in the next few months.⁷

BIDs are ending up paying tens of thousands of dollars each, and possibly more than that, even, all because they won’t follow the law and the City won’t step in and ask them to stop fooling around and follow the damn law. And it’s not actually beneficial for the City in the long term to ignore its responsibility to oversee BIDs. In fact, as we know, if a court finds that a BID violated a law, any law, even the CPRA, it is required, not optional, that the City notice and hold a hearing on the BID’s disestablishment.

Even if the BID ends up not being disestablished, this is going to cost money, time, and tsuris. Furthermore, if BIDs actually do get disestablished by this method, and some might,⁸ the City will have lost something that it obviously considers valuable. This will have been avoidable if only the City had been willing to step in and mediate the BID’s compliance. So this refusal of the City’s to oversee is also short term thinking.

But it’s certainly not surprising that both the BIDs and the City are thinking this way. First of all, it was a reasonably good bet that I wouldn’t have turned out to be so tenacious. If they’d put me off for a few years and I’d faded away their bet would have been a good one. Secondly, this change is consistent with the City’s absolute unwillingness to oversee BIDs and BIDs’ absolute unwillingness to be overseen. They’ve been colluding on this for decades.

The first known instance was in 2001, just five years after the City of LA started having BIDs at all. The Clerk proposed to revise the standard contract to allow the City to “[c]onduct program reviews of BID operations and investigate claims of irregularities by stakeholders.” This possibility caused the BIDdies to absolutely flip out and the City to back off. Since then the City has essentially refused to oversee BIDs at all.

In 2004, e.g., then-Clerk Michael Carey told the L.A. Times that he wouldn’t manage BIDs at all. And my investigations have turned up example after example of laws, of rules, of standards of all kinds, that BIDs violate and the City ignores. The City as a matter of policy tells BIDs to do whatever they want without fear of oversight. This instance is no different, but it’s going to end up costing everyone involved⁹ a lot of money and time.

Language from the former standard contract regarding BIDs, CPRA, and the Brown Act:

SECTION 16. BROWN ACT AND PUBLIC RECORDS ACT

16.1. The Board of Directors of Corporation is a private entity and may not be considered a public entity for any purpose, nor may its board members or staff be considered to be public officials for any purpose.

16.2. Notwithstanding Section 16.1 above, the Board of Directors of Corporation, when hearing, discussing, deliberating, and taking actions on matters within the subject matter of the District or that are covered under this Agreement, will comply with the provisions of the Ralph M. Brown Act (Chapter 9, commencing with Section 54950 of Part 1 of Division 2 of Title 5 of the Government Code).

16.3. Notwithstanding Section 16.1 above, Corporation and the Board of Directors are also subject to and must comply with the California Public Records Act (Chapter 3.5, commencing with Section 6250 of Division 7 of Title 1 of the Government Code).

Transcription of Holly Wolcott’s statement on why she will not force BIDs to comply with CPRA:

Thank you for your communication. In your report, you include several emails as appendices to and from the Downtown Center Business Improvement District relative to the Brown Act It appears, by the exchange of emails, that the Business Improvement Districts in question are aware that they are subject to the Brown Act and the Public Records Act and that they are responding to your requests. If I am reading your report correctly, you do not seem to think that they,have provided all the requested documents and that you do not think that information has been redacted correctly. That is something for you to address with the BIDS. The City Clerk’s office unable to determine which specific documents you do not believe were provided to you, nor does the Clerk’s office have the authority to control/direct the records management practices of the various BIDS which are entities wholly separate from the City.

There does not appear to be any evidence that the Downtown Center Business Improvement District is in anyway in breach of their contract with the City of Los Angeles. If you believe they are in violation of the CPFtA, you should contact the BID or their independent attorneys. If you have any further questions about the application of the City’s codes to the BIDs, please direct those communications to the Bureau of Contract Administration within the Department of Public Works.

Thank you again for your correspondence.

Holly

Image of Holly Wolcott is ©2018 MichaelKohlhaas.Org. The pseudosatanic symbol featured is this thing, which is called a unicursal hexagram, invented, it would seem, or at least studied, by French mathematician and theological hobbyist Blaise Pascal and later popularized by spiritual Angeleno¹⁰ Aleister Crowley with whose philosophy of Thelema it seems to be associated. The quote appearing on Holly Wolcott’s imaginary placard is a fundamental principle of that philosophy. Got it? It WILL be on the final!

1. The alert reader will note that the law actually requires that property owners’ associations rather than BIDs comply with these laws. Of course, the BID is the geographical area containing the properties to be assessed. The POA is the non-profit corporation which contracts with the City to administer the BID, where “administer” means spend the money that’s collected. For our purposes this is a distinction without a difference. The only context, in my experience, in which it’s absolutely essential to distinguish between a BID and its POA is when one is filing yet another damn petition for writ of mandate against them for yet another damn failure to comply with the public records act. Word to the wise: You have to sue the POA, not the BID.
2. Actually “contained” is more accurate, as this language no longer appears in the contracts used, which is the point of today’s post.
3. Sherri Franklin is a BID consultant registered with the City Clerk’s office, which means she’s at least 15% likeable! She founded and runs an outfit called Urban Design Center which does BID consultancy and other stuff I can’t quite understand. She is also on the staff of the Central Avenue Historic BID in some capacity.
4. Or both, certainly, which seems to be the norm amongst the BIDs I’ve studied.
5. Because I’m not a lawyer, remember that!
6. This is almost true for the Brown Act as well. It’s always allowed to file one’s own petitions for violations of the Brown Act, but at least in theory the LA County District Attorney will also investigate them. I have had pretty poor luck with the DA, and I’ve heard from others that under Jackie Lacey enforcement has dropped pretty nearly down to zero. Hence I’m investigating the possibility of filing my own petitions. As always, stay tuned!
7. Stay tuned!
8. Venice, I’m looking at you!
9. Except me, of course!
10. By which I mean that he was an Angeleno in spirit, not that he was an Angeleno and a spiritual one at that.