I’ve written many times about the monumental case Epstein v. Hollywood Entertainment District BID and will, I have no doubt, write about it many more times to come. The issue in 1998 was that Hollywood property owner Aaron Epstein thought that he ought to be able to attend BID meetings whereas executive director Kerry Morrison, then at the very dawn of her BIDdological career but as characteristically secretive as ever, refused to let him in to watch his money being spent.
He sued in 1999, claiming that the BID1 was required to comply with the Brown Act by virtue of §54952(c)(1)(A), which makes an entity of the following type subject to its transparency requirements:
A board, commission, committee, or other multimember body that governs a private corporation, limited liability company, or other entity that … [i]s created by the elected legislative body in order to exercise authority that may lawfully be delegated by the elected governing body to a private corporation, limited liability company, or other entity.
The case yielded a monumental opinion from the Court of Appeal, dripping with sarcasm and barely disguised contempt for the weak arguments of the defendants. It’s worth reading in its entirety, or take a look here for selections. But for our purposes here it’s enough to know that both the BID, driven by Ms. Kerry Morrison and her absolute disgust at the possibility of public oversight of her publicly funded activities, and the City of Los Angeles in the person of then-deputy-City-Attorney Patricia Tubert, argued vehemently that the BID was not in any way subject to the Brown Act.
So what a surprise it was, the other day, to obtain a copy of this 1995 report from the Los Angeles City Attorney, authored by none other than Patricia Tubert, which explicitly stated that in the opinion of the City Attorney BIDs were in fact subject to the Brown Act, exactly as the Court of Appeal ruled in 2001 over the City’s objections. And attached to this report was a 1994 opinion issued by the Fair Political Practices Commission in response to an explicit request from none other than the Los Angeles City Attorney which reached precisely the same conclusion.
And not only that but both agencies agreed that BID board members are in fact public officials with respect to these laws and also subject to state prohibitions on conflicts of interest.2 So it’s really a mystery now why in 1998 when Aaron Epstein wanted to attend BID meetings the City of Los Angeles didn’t just tell Kerry Morrison and her infernal board of directors that they had to let him in. Why they spent three long and undoubtedly expensive years defending a position that they already knew to be wrong.
At this late date and because the attorney client privilege between the City and the City Attorney is doubtlessly implicated, we are probably never going to know for sure why they made the obviously wrong decision to defend an indefensible position. But if they were thinking about Kerry Morrison and her weirdo schemes back then like they are now, and why wouldn’t they have been, they wouldn’t have needed any more of a reason beyond Kerry Morrison’s request. Shameful. And harmful. But not a surprise. Turn the page for selected transcriptions.
From the 1995 City Attorney’s report:
In order to allow the Advisory Boards3 to administer the funds with minimal supervision, the procedures currently utilized by the City Clerk to administer the General City Purposes Fund, which include reporting requirements and desk audits, with the ability to do a complete audit, will be used for these business improvement district contracts. However, the Board will be subject to rules relating to government entities. Since the Board would be spending money collected by the City through an involuntary assessment, the City Attorney’s Office and the Fair Political Practices Commission has [sic] opined that the Board would be a governmental agency for conflict of interest, Brown Act and public records purposes.
…
A contract with the Advisory Board shall be subject to the following … The Ethics Commission will be responsible for any monitoring of the conflicts provisions of the contract.
From the 1994 FPPC opinion:
Dear Mr. Alperin:
This letter is in response to your request for advice concerning the status of an Advisory Board of the Broadway Business Improvement District under the Political Reform Act (the “Act”).1 You have indicated that the contract detailing the operating procedures and administrative responsibilities of the Advisory Board is currently being negotiated; we are, therefore, providing you with informal assistance pursuant to Regulation 18329.
Please note that nothing in this letter should be construed to evaluate any conduct which may have already taken place. In addition, this letter is based on the facts presented to us. The Commission does not act as the finder of fact in providing advice. (In re Ogelsby (1975) l FPPC Ops. 71.) Further, the Commission’s advice is limited to the provisions of the Act.
QUESTION
Is the Advisory Board of the Broadway Business Improvement District, formed pursuant to Parking and Business Improvement Area Law of 1989 (Streets & Highways Code Section 36500, et seq.) (the “BID Act”) a “local government agency” and are members of the Board “public officials” within the meaning of the Act?
CONCLUSION
The Advisory Board is a “local government agency” and the persons serving on the Board are “public officials” within the meaning of the Act.
FACTS
The California Legislature enacted the BID Act to promote the economic revitalization and physical maintenance of the business districts of California cities. It accomplishes this by allowing those cities to fund property related improvements and activities through the levy of assessments upon businesses which benefit from those improvements and activities. If a local government chooses to establish a Business Improvement District, all businesses located within the district become subject to the assessment levied by the city.
The BID Act provides that the city council of a city establishing a BID shall appoint an Advisory Board. The statutory duties of such an Advisory Board include the preparation of a report for each fiscal year for which assessments are to be levied and collected to pay the costs of the improvements and activities described in the report. Such a report may propose changes in the boundaries of the district, improvements and activities to be provided during the year, the basis and method for levying assessments and changes in the classification of businesses within the district. After reviewing and approving the report, the city council is required to adopt a “resolution of intention to levy an annual assessment for that fiscal year” and to take other actions as it deems appropriate, based on the recommendations of the Advisory Board. The city council may designate existing advisory boards or commissions to serve as the Advisory Board for that purpose.
The Los Angeles City Council (hereafter “city council”) has established the Broadway Business Improvement District (BBID) for an area within the city’s downtown business district. In accordance with Streets & Highways Code Section 36530, the ordinance establishing the BBID provides that the city council shall appoint an Advisory Board for the BBID. In addition to adopting the ordinance, the city council has instructed the city attorney and the city clerk to negotiate a contract between the city and a private, nonprofit organization, Miracle on Broadway Corporation, for the operation of the BBID and the administration of funds paid pursuant to the assessment authorized by the ordinance and the BID Act. You have indicated that although the contract terms have not yet been finalized, it is expected that the contract will authorize Miracle on Broadway, through the Advisory Board that is expected to serve as the board of directors of Miracle on Broadway, to negotiate and enter into contracts to perform the improvements and activities previously approved by the city council as part of the BBID annual budget. The contract with Miracle on Broadway will also set forth detailed operating procedures and administrative responsibilities of the Advisory Board.
…
You have indicated that the city council has instructed the city attorney and the city clerk to negotiate a contract between the city and Miracle on Broadway for the operation of the Broadway Business Improvement District and the administration of the funds paid pursuant to the assessment authorized by the ordinance and the BID Act. You believe that the contract will authorize Miracle on Broadway, through the Advisory Board that you expect will serve as its board of directors, to negotiate and enter into contracts to perform the improvements and activities previously approved by the council as part of the Broadway Business Improvement District annual budget. Since it appears that the Advisory Board will be responsible for negotiating and entering into contracts to perform the improvements and activities previously approved, the Advisory Board is making final governmental decisions. Under these circumstances, the persons who serve on the Advisory Board are deemed to be “members”, and, therefore, “public officials,” within the meaning of Regulation 18700(a)(1). (Section 82048.)
Accordingly, we conclude that the Advisory Board of the Broadway Business Improvement District is a “local government agency” and the persons serving on the Board are “public officials” within the meaning of the Act.
Image of former deputy City Attorney Patricia V. Tubert is ©MichaelKohlhaas.Org. It was lightly boofed around from this PVT right here.
- Really the property owners’ association, don’t forget, but it’s too muddly to keep insisting on the distinction.
- This finding will have important consequences for my future work. The City Attorney’s report says that the Ethics Commission is responsible for enforcing these conflict of interest rules against BID boards and possibly staff. So far to my knowledge the Commission has declined to do so, although this complaint against Fashion District zeck dreck Rena Leddy is probably still pending. The fact that the City Attorney thought that they were responsible might help convince them. And note that these state COI rules are really broad and almost certainly BID board members violate them constantly, so there are many possibilities there!
- This seems to be what they were calling the BID Boards of Directors back in 1995.
