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JACKSON BUSINESS IMPROVEMENT DISTRICT (BID)

Authority for Review

Grand Jury jurisdiction authorized by Penal Code Section 933.5.

Background

Complaint received by Grand Jury requesting "investigation . . . to determine the legality of the formation of this specific BID and the collection and expenditure of the revenue generated."

Method of Review

Interview with President of BID
Interview with Vice President of BID
Interview with Executive Director of BID
Interview with former and current Treasurers of BID
Interview with Jackson City Manager
Review of documents including Jackson City Council resolutions, City Ordinance No. 579, letters and memos regarding BID, financial records, and newspaper articles
Attendance at public hearings

Findings

At the request of local businesses, the City of Jackson sought the assistance of the California Main Street Program for improving the downtown area. The Main Street Program provides five cities in the State with three years of technical assistance in economic revitalization.

The State requires a secure funding source in order for a city to be accepted into the Main Street Program. The Business Improvement District (BID) was adopted to provide the secure funding source for Jackson's participation in the program.

To establish the BID, the City was required to distribute notice to all affected parties. The City was also required to present affected businesses with a proposed budget including estimated costs to the businesses.

At least one public hearing is required to discuss the intention to form a district. If the district is adopted, notice must again be given to all affected parties.

After complying with these prerequisites, the Jackson BID was implemented through the adoption of Ordinance No. 579 by the City Council. Protest letters were received from 11 out of the approximately 125 affected businesses.

The BID covered businesses located on Main Street as well as some on Highway 88 and the other streets adjacent to downtown Main Street. Affected businesses were required to pay an annual fee, called a benefit assessment, to the District. The benefit assessment was to be used for items such as benches, trash receptacles, decorations, landscaping and other activities.

The BID established long range goals for participation in the California Main Street Program.

The City sends out the assessment fee bills. Funds collected are held in a trust account. The Profit and Loss Statement for January through December 1996 indicates an income of $38,997.43 ($25,000 from the City of Jackson, $12,775 in BID Assessments, and $1,222.43 miscellaneous) and expenses of $38,149.11. No grants were requested or received to pay assessment fees.

A review of the checks written showed the major expenses were salaries and payroll taxes for the part-time Executive Directors. Other expenses included special events, office expenses, publicity, insurance, legal fees, consultant fees, bank charges, and rent.

The City will not collect delinquent assessment fees. The method of collecting the delinquent fees is to be determined by the BID Board of Directors.

During the first year of operation the BID had three consecutive Executive Directors and multiple changes of officers. There have been no regularly scheduled meetings including one three month period with no general meetings held at all. No BID newsletters were printed prior to December 1996.

During 1996, less than half of the $33,075 in assessment fees were collected. An advisory committee was formed in January 1997 to reconsider assessments. The committee recommended that the boundary lines of the BID be revised to include downtown only. The committee also recommended that delinquent assessments be collected and that no changes be made to the assessment amounts.

Conclusions

The BID was legally formed after the required notices were distributed and hearings conducted.

The operation of the BID was hindered by the lack of participation by about 60% of the businesses and the failure to establish short term goals for the organization.

Communication between the businesses and the BID has been sporadic.

Recommendations

Establish a collection procedure for delinquent assessments.

Provide revenue and expenditure reports to business owners.

Hold regularly scheduled general membership meetings.

Establish and implement short term, highly visible goals.

The City of Jackson take a more active role when City funds are involved.

Response required

The Amador County Grand Jury requests the City of Jackson to respond within 90 days as required by Penal Code 933(c).
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