HomeMy WebLinkAboutOrdinance No. 1790 (as amended)Downtown Business Improvement DistrictCommission Memorandum: Final Adoption of Ordinance 1790 Recreating the DBID
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Commission Memorandum
REPORT TO: Honorable Mayor and City Commission
FROM: Greg Sullivan, City Attorney
APPROVED BY: Chris Kukulski, City Manager
SUBJECT: Final Adoption of Ordinance 1790 (as amended): An Ordinance for the
Recreation/Extension of the Downtown Business Improvement District.
MEETING DATE: July 12, 2010.
AGENDA ITEM TYPE: Consent.
RECOMMENDATION: Finally adopt Ordinance 1790 with amendments regarding amending
the audit requirement as proposed by staff.
BACKGROUND: On June 21, 2010, you provisionally adopted Ordinance 1790 recreating
the Downtown Bozeman Business Improvement District (DBID). Pursuant to law, you must
finally adopt this ordinance before it can become effective. Other than appointing members to
the Board of Trustees for the DBID, this is the last step in the process to recreate the DBID.
As discussed below, the City Attorney and Finance Director recommend the Commission
adopt two changes to the ordinance at final adoption. If the Commission adopts the
ordinance as presented here on the consent agenda the effect will be to accept the
amendments proposed by the City Attorney and Finance Director. If the Commission
desires to adopt the ordinance as provisionally adopted or if the Commission desires other
or additional amendments the Commission must pull this item from the consent agenda.
The adoption of an ordinance for the creation of a business improvement district is required by
state law. Sect. 7-12-1121(1), MCA. In addition, the codification of the powers and duties of the
Board of Trustees and of specific provision controlling the operations of the District benefits
property owners and city administrators by having the operating procedures for the District
clearly specified in the municipal code.
Ordinance 1790 contains two primary components: (i) creation of the District’s Board of
Trustees and enumeration of the powers and of the Board in Title 2 of the BMC; and (ii) specific
provisions related to the administration of the DBID including establishment of boundaries and
the method of levying the assessments. Each of these components was discussed in the
memorandum for provisional adoption of this ordinance.
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Commission Memorandum: Final Adoption of Ordinance 1790 Recreating the DBID
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UNRESOLVED ISSUES: During the hearing on provisional adoption, Chris Naumann, the
Executive Director of the Downtown Bozeman Partnership, requested the Commission
reconsider the requirement for the DBID to conduct an annual audit of the district’s
finances. Mr. Naumann’s is concerned the cost of a formal audit could amount to as much as 4-
5% of the DBID yearly budget thus taking away money that is spent on core DBID programs. At
that time, the city staff then committed to reviewing this requirement in relation to the law.
Please recall the audit requirement was included in the staff proposed ordinance for provisional
adoption because of the staff’s desire to maintain consistency among the business improvement
districts as the recently adopted municipal code provisions establishing the Tourism Business
Improvement District (TBID) included the requirement for the TBID to conduct an “audit.”
However, the City Attorney and Finance Director again reviewed the statutory financial
reporting requirements for local governmental entities under the Montana Single Audit
Act (Title 2, Chpt. 7, Part 5, MCA) and now recommend the Commission amend the
ordinance as discussed herein. We believe doing so will maintain consistency with the TBID
audit requirement.
As a starting point, the City Attorney and Finance Director recommend the Commission require
all governmental entities receiving city tax revenue to comply with the requirements of the Act.
The Act requires all governmental entities, including the BIDs, to annually file a “financial
report” with the Montana Department of Administration. Sect. 2-7-503(1), MCA. In addition to
this general requirement to file a “financial report,” the Act requires a local governmental entity
which receives revenue or financial assistance in any year in an amount in excess of $300,000 to
conduct a formal “audit” at least every two years. Sect. 2-7-503(3)(a), MCA (incorporating the
financial limit of $300,000 as established by the Director of the federal Office of Management
and Budget in 31 U.S.C. 7502(a)(3)before an audit is required). Because the assessments for the
DBID are capped in the ordinance at no more than $126,000, to comply with the Act, the DBID
only need perform a “financial report” in compliance with 2-7-501, MCA – thus, our
recommendation to amend the ordinance.
It needs to be noted that because the Tourism BID brings in excess of $300,000 in revenue per
year the Tourism BID must, under the Act, complete an audit. Sect. 2-7-503(3)(a), MCA.
A “financial report” under the Act contains valuable information property owners and the
Commission can review. A “financial report” is defined as “a means a presentation of financial
statements, including applicable supplemental notes and supplemental schedules, that are
prepared in a format published by the department using the Budgetary Accounting and Reporting
System for Montana Cities, Towns, and Counties Manual and that reflect a current financial
position and the operating results for the 1-year reporting period.” Sect. 2-7-501(5), MCA. In
addition, the expenditures of the DBID and all records related to those expenditures, unless
protected by law, are considered public records and available for inspection by the public.
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Commission Memorandum: Final Adoption of Ordinance 1790 Recreating the DBID
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Given the above, the City Attorney and Finance Director recommend the Commission
amend two sections of the ordinance at this time to reflect these changes.
As stated above, these amendments are reflected in the ordinance attached to this staff
report for final adoption. If the Commission adopts the ordinance on the consent agenda
the effect will be to adopt these proposed amendments. IF THE COMMISSION WISHES
TO FINALLY ADOPT THE ORDINANCE AS PROVISIONALLY ADOPTED OR WITH
AMENDMENTS OTHER THAN WHAT IS PRESENTED IN THE ATTACHED
ORDINANCE THE COMMISSION MUST REMOVE THIS ITEM FROM THE
CONSENT AGENDA.
The proposed new text is highlighted in red and text to be deleted is struck through:
Section 1 of the ordinance which creates 2.90.030.D. is now proposed to read as follows:
D. Annual Budget, Work Plan /Recommendation on Assessment/Financial Report.
1. The Board of Trustees shall annually complete a financial report in
compliance with the requirements of Title 2, Chpt. 7, Part 5, MCA and
provide a copy to the City Commission.
2. Each year, at a date and in a format established by the Bozeman Finance
Director, the Board of Trustees shall submit to the Bozeman City Commission
a report of its activities for the preceding year. The report shall contain an
audit of the district’s finances. In addition, the board shall, at the same time,
submit to the Bozeman City Commission, a work plan and budget for the
ensuing fiscal year pursuant to the requirements of Title 7, Chpt. 12, Part 11,
MCA. The Bozeman City Commission shall have final authority to approve
the work plan and budget.
3. At the time the Board of Trustees submits an report, annual budget, and work
plan, the board shall also submit a recommendation to the Bozeman City
Commission on a method of levying an assessment on the property within the
BTBID pursuant to the requirements of Title 7, Chpt. 12, Part 11, MCA. If the
method of assessment is to be different than that described in Sect.
3.22.020.E, the Commission must adopt an ordinance amending said section.
4. The work plan and budget shall comply with the provisions and procedures of
Sect. 3.22.020.F.
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Section 2 of the ordinance which creates 3.22.030.F is now proposed to read as follows:
F. Work Plan, Budget and Financial Report.
1. The Board of Trustees shall prepare a financial report in compliance with Title
2, Chpt. 7, Part 5, MCA.
2. The Board of Trustees for the BDBID shall annually prepare a work plan,
audit, and budget and submit the same to the Bozeman City Commission. The
Commission shall provide notice work plan and budget have been submitted
and shall hold a public hearing on objections to the work plan and budget and
may modify the work plan and budget as it considers necessary and
appropriate. Upon approval of the work plan and budget the Commission shall
levy the assessments as described in Sect. 3.22.030.E.
According to the City Attorney, the changes presented here do not rise to the point of requiring
this ordinance to be heard at an additional hearing. The Commission, however, may wish to do
so.
ALTERNATIVES: The Commission may wish to keep the ordinance as provisionally
adopted. Again, as stated above, to do so, the Commission must remove this item from the
consent agenda and make a motion to “adopt Ordinance 1790 as provisionally adopted.”
FISCAL EFFECTS: The following was included in the Commission Memorandum from
Resolution 4263, with provisional adoption of this ordinance and is repeated here. The fiscal
effects to the city of Bozeman government are nominal. The effects include staff time in the
Finance Department administering the finances of the district and conducting tasks associated
with including the assessments on the yearly city assessments mailed out to each property owner.
Each summer, prior to final approval of the overall budget, the DBID is required to present a
work plan and district budget to the City Commission for approval. The Commission will, based
on the approved work plan and budget, levy an assessment against each property within the
District to raise the approved budgeted amount.
The total assessments for the District for 2009 totaled $114,000 and the Resolution calls for a
limit on the total assessments for the District, if re-created, for 2010 to not exceed $114,000. This
amount represents the entire budget for the District. The Resolution also caps the total
assessments during the life of the District.
Attachment: Ordinance 1790 for Final Adoption
Report compiled on: July 8th, 2010
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ORDINANCE NO. 1790: Recreation/Extension of the Bozeman Downtown Business Improvement District
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ORDINANCE NO. 1790
AN ORDINANCE OF THE CITY COMMISSION OF THE CITY OF
BOZEMAN, MONTANA, AMENDING CHAPTERS 2.90 AND 3.22 OF
THE BOZEMAN MUNICIPAL CODE TO RECREATE/EXTEND THE
DOWNTOWN BUSINESS IMPROVEMENT DISTRICT
WHEREAS, on June 21, 2010, the City Commission of the City of Bozeman adopted
Resolution 4263, creating the Bozeman Downtown Business Improvement District; and
WHEREAS, pursuant to Sect. 7-12-1121(1), MCA, the City Commission, in addition to a
resolution as describe above, must adopt an ordinance to implement the Bozeman Downtown
Business Improvement District; and
WHEREAS, the recitals and findings made during adoption of Resolution 4263,
including those made in the adoption of Resolution 4256, a Resolution of Intent to
recreate/extend the Bozeman Downtown Business Improvement District, are hereby incorporated
as legislative findings for the adoption of this Ordinance.
NOW THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE
CITY OF BOZEMAN, MONTANA:
Section 1
That the Chapter 2.90, Bozeman Municipal Code, shall be amended as follows and any
section within not amended herein shall remain in effect:
Chapter 2.90
BUSINESS IMPROVEMENT DISTRICTS BOARDS OF TRUSTEES
Sections:
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2.90.010 Purpose and Intent
2.90.020 Bozeman Tourism Business Improvement District Board of Trustees
2.90.030 Bozeman Downtown Business Improvement District Board of Trustees
2.90.030 Bozeman Downtown Business Improvement District Board
A. Creation – Powers and Duties.
The Bozeman City Commission creates the Bozeman Downtown Business
Improvement District (BDBID) Board of Trustees and authorizes the BDBID
Board of Trustees to exercise any of the following business improvement district
powers, in conjunction with administration of the BDBID created pursuant to
Chpt. 3.22 of this code:
1. Sue and be sued;
2. Enter into contracts to carry out the function of the BDBID;
3. Hire and terminate personnel needed for its purposes;
4. Provide adequate liability insurance for the affairs of the BDBID;
5. Promote private investment and business expansion in the BDBID;
6. Provide for the management and administration of the affairs of the BDBID;
7. Promote business activity by advertising, decorating, marketing, and
promoting and managing events and other actions designed for the general
promotion of business activities in the BDBID;
8. Perform such other functions as are necessary to carry out the purposes of this
chapter and to further the objectives of the BDBID;
9. Adopt bylaws, subject to the approval of the Bozeman City Commission, for
the operation of the board and develop procedures for the collection and
maintenance of BDBID records and the protection of district members’
privacy and trade secrets to the extent allowable by Montana law; and
10. Authorize the acquisition and disposal of real property upon the consent of the
City Commission.
B. Members – Appointments and Terms.
1. All appointments to the BDBID shall be made by the Bozeman City
Commission.
2. Upon creation, there shall be seven (7) members of the Board of Trustees and
there shall always be at least five (5) but not more than seven (7) members of
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the Board of Trustees for the BDBID, amendable from time to time by duly
adopted resolution of the Bozeman City Commission. The terms of the initial
seven members shall be as follows:
three members to serve for terms of 1, 2, and 3 years, respectively,
from the date of their appointments, two must be designated to
serve for terms of 4 years from the date of their appointments. For
a seven-member board of trustees, there must be two additional
appointments for terms of 2 years and 3 years, respectively.
3. Notwithstanding 2.90.030.B.2 the existing terms of all current Board of
Trustee positions shall continue uninterrupted.
4. Each board member shall hold office until his or her successor has been
appointed and has qualified.
5. A board member shall receive no compensation for his or her service. Board
members shall be entitled to previously authorized expenses, including
travelling expenses, incurred in the discharge of his or her duties.
6. Any persons may be appointed as board members but only if they are owners
of real property subject to the jurisdiction of the BDBID or a formally
appointed representative of a real property owner.
7. A board member may be removed by the City Commission for inefficiency,
neglect of duty, or misconduct, in office.
C. Meeting – Election of Officers.
1. The BDBID Board of Trustees shall hold meetings as it deems necessary to
execute its powers and duties provided for in Section 2.90.030.A and Chapter
3.22 of this code.
2. The BDBID Board of Trustees shall adopt bylaws enabling it to elect officers,
set officer terms, and establish regular meeting times.
D. Annual Budget, Work Plan /Recommendation on Assessment/Financial
Report.
1. The Board of Trustees shall annually complete a financial report in
compliance with the requirements of Title 2, Chpt. 7, Part 5, MCA and
provide a copy to the City Commission.
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2. Each year, at a date and in a format established by the Bozeman Finance
Director, the Board of Trustees shall submit to the Bozeman City Commission
a work plan and budget for the ensuing fiscal year pursuant to the
requirements of Title 7, Chpt. 12, Part 11, MCA. The Bozeman City
Commission shall have final authority to approve the work plan and budget.
3. At the time the Board of Trustees submits an annual budget and work plan,
the board shall also submit a recommendation to the Bozeman City
Commission on a method of levying an assessment on the property within the
BTBID pursuant to the requirements of Title 7, Chpt. 12, Part 11, MCA. If the
method of assessment is to be different than that described in Sect.
3.22.020.E, the Commission must adopt an ordinance amending said section.
4. The work plan and budget shall comply with the provisions and procedures of
Sect. 3.22.020.F.
E. Duration.
The Board of Trustees for the BDBID shall remain in effect as long as the BDBID
remains in effect.
F. Ethics Ordinance.
All board activities and members are subject to all other provisions of this code,
including Chpt. 2.01, Code of Ethics.
G. Liability/Property Insurance Required.
The Board of Trustees shall obtain liability insurance coverage, at the sole
expense of the BDBID, insuring the BDBID, the Board of Trustees, and the City
of Bozeman against legal liability for personal injury and property damage in an
amount not less than the liability and property exposure limits established for
governmental entities in Title 2, Chpt. 9, Part 1, MCA.
Section 2
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That Chapter 3.22 of the Bozeman Municipal Code shall be amended by adding a new
Section 3.22.030:
Chapter 3.22
Business Improvement District Programs
Sections:
3.22.010 Purpose and Intent
3.22.020 Bozeman Tourism Business Improvement District Program
3.22.030 Bozeman Downtown Business Improvement District Program
3.22.030 Bozeman Downtown Business Improvement District Program.
A. Creation of District.
The Bozeman City Commission creates and establishes the Bozeman Downtown
Business Improvement District (BDBID).
B. District to be Administered by Board of Trustees.
Pursuant to Sect. 2.90.030, the affairs of the BDBID are to be administered by the
BDBID Board of Trustees.
C. Limits and Boundaries of District.
The properties of the BDBID shall include those within the boundaries as described
in Section 3 of Resolution 4263, adopted June 21, 2010.
D. General Character of the Services to Be Performed.
The services to be performed by the BDBID shall include the funding of all uses and
projects within the BDBID as specified in the annual work plan and budget, as
required by Sect. 2.90.030.D, and as approved by the Bozeman City Commission. .
E. Assessments.
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Each lot or parcel of land, including the improvements on the lot or parcel, shall be
assessed for that part of the whole cost of the district that its taxable valuation bears to
the total taxable valuation of the property of the BDBID and shall be as follows:
1. For the first three fiscal years (2011-2013) of the BDBID the total property
owner assessment shall not exceed $114,000.00;
2. For the fourth through seventh fiscal years (2014-2017) the assessment shall
not exceed $120,000.00; and
3. For the eighth through tenth years (2018-2020) the assessment shall not
exceed $126,000.00.
These assessment limitations may be exceeded with a favorable vote or petition
by the owners of more than 60% of the area of the property in the BDBID.
F. Work Plan, Budget and Financial Report.
1. The Board of Trustees shall prepare a financial report in compliance with Title
2, Chpt. 7, Part 5, MCA.
2. The Board of Trustees for the BDBID shall annually prepare a work plan, ,
and budget and submit the same to the Bozeman City Commission. The
Commission shall provide notice work plan and budget have been submitted
and shall hold a public hearing on objections to the work plan and budget and
may modify the work plan and budget as it considers necessary and
appropriate. Upon approval of the work plan and budget the Commission shall
levy the assessments as described in Sect. 3.22.030.E.
G. Records/Trade Secrets/Privacy
Pursuant to Montana law, the public shall have reasonable access to the records of the
BDBID. To ensure there is sufficient protection of the trade secrets or privacy of any
property owner subject to this chapter the Board of Trustees shall adopt procedures
for creation and maintenance of records of the BDBID and procedures for balancing
the right of the public to access to said records with the interest of the property
owner’s right to privacy or to maintain the confidentiality of any valid trade secrets.
These procedures shall be approved by the Bozeman City Attorney and incorporated
into the bylaws.
H. Duration of District
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The BDBID shall remain in effect for 10 years from the effective date of Ordinance
1790 unless otherwise extended or modified by the Bozeman City Commission.
Section 3
Repealer.
All provisions of the ordinances of the City of Bozeman in conflict with the provisions of
this ordinance are, and the same are hereby, repealed and all other provisions of the ordinances
of the City of Bozeman not in conflict with the provisions of this ordinance shall remain in full
force and effect.
Section 4
Savings Provision.
This ordinance does not affect the rights and duties that matured, penalties that were
incurred or proceedings that were begun before the effective date of this ordinance.
Section 5
Severability.
That should any sentence, paragraph, subdivision, clause, phrase or section of this
ordinance be adjudged or held to be unconstitutional, illegal, or invalid, the same shall not affect
the validity of this ordinance as a whole, or any part or provision thereof, other than the part so
decided to be invalid, illegal or unconstitutional, and shall not affect the validity of the Bozeman
Municipal Code as a whole.
Section 6
Codification Instruction.
The provisions of Sections 1 and 2 shall be codified as appropriate in Titles 2 and 3 of the
Bozeman Municipal Code.
Section 7
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Effective Date.
This ordinance shall be in full force and effect thirty (30) days after final adoption.
PROVISIONALLY PASSED by the City Commission of the City of Bozeman,
Montana, on first reading at a regular session held on the 21st of June, 2010.
______________________________
JEFFREY K. KRAUSS
Mayor
ATTEST:
_____________________________________
STACY ULMEN, CMC
City Clerk
APPROVED AS TO FORM:
______________________________
GREG SULLIVAN
City Attorney
FINALLY PASSED by the City Commission of the City of Bozeman, Montana, on first reading
at a regular session held on the 12th of July, 2010.
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______________________________
JEFFREY K. KRAUSS
Mayor
ATTEST:
_____________________________________
STACY ULMEN, CMC
City Clerk
APPROVED AS TO FORM:
______________________________
GREG SULLIVAN
City Attorney
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