SR-213-008 (6)
City Council Meeting: September 13, 2005 Santa Monica, CA
To: Mayor and City Council
From: City Staff
Subject: Termination of Contracts with the Valley Economic Development Center
(VEDC) for Fiscal Services for the Main Street Business Improvement
Association and the Pico Improvement Organization business improvement
districts (BIDs), and Approval of a Contract with the Main Street Business
Improvement Association and a contract with Weil & Company for Fiscal
Services for the Pico Improvement Organization.
Introduction
This report recommends that the City Council authorize the City Manager to cancel the
contracts with the Valley Economic Development Center (VEDC) for the administration
of funds for the Main Street Business Improvement Association, and the Pico
Improvement Organization (BIDs). To replace the services provided by VEDC, staff
recommends that the City Council approve an agreement with the Main Street Business
Improvement Association for administration of its funds, and approve a contract with
Weil & Company for the administration of the Pico Improvement Organization BID
funds.
Background and Discussion
The City created the Main Street Business Improvement District (“BID”) in 1984, the
Montana BID in 1974 and the Pico BID in 2000. The City collects a special assessment
from the businesses within each BID based on a formula created for the specific BID.
The City retains 5% of the amount collected for its administrative expenses, and passes
through the remainder to a fiscal agent to be used by the BID Board of Directors for
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programs and projects that benefit their members. In 2004-2005, the City collected
approximately $81,000 from businesses within the Main Street BID, $96,000 from
businesses within the Montana BID and $80,000 from businesses within the Pico BID.
In 2001, the City Council entered into three agreements with the VEDC to administer
the funds collected on behalf of the Main Street, Pico and Montana BIDs. In addition,
VEDC provided insurance for each BID’s Board of Directors and offered other
administrative services, such as assisting each BID with mail-outs and preparation of
minutes. VEDC’s compensation was set at 10% of the amount received from the City.
In April 2005, VEDC agreed to reduce the amount of compensation to 6% for the Main
Street BID because the Main Street BID had incorporated and its Executive Director
had begun to provide many of the administrative services that VEDC had been
contracted to do.
Since 2001, the needs of the three BIDs have changed. Both the Main Street and Pico
BIDs have incorporated, obtained their own insurance and are in a position to take on
more responsibility. The Montana BID is not in a position to change until it
incorporates, which is a process it has begun.
In response to the BIDs’ requests for a new fiscal administrator, City staff sought
proposals from firms who could provide the required services and received two
responses. Staff recommends that the City enter into an Agreement with Weil &
Company for fiscal services for the Pico Improvement Organization BID, and that the
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Council enter into an Agreement with the Main Street Business Improvement
Association BID for management of its assessments.
The organizational capacity of the Main Street Business Improvement Association BID
has grown over the last several years. With assistance from its Executive Director, the
Board of Directors sponsors regular events (e.g. Summer Soulstice) and marketing
activities for its members. Therefore, staff recommends that the City contract directly
with the Main Street Business Improvement Association to manage its funds. A
condition of the Agreement would be that the Main Street Business Improvement
Association provide to the City monthly and annual accounting reports and a certified
annual audit.
Although the Pico Improvement Organization BID has incorporated, it does not yet have
an Executive Director and continues to require administrative support. Staff
recommends that the City enter into an agreement with Weil & Company to administer
the BID funds received by the City on behalf of the Pico Improvement Organization BID.
Weil & Company is a Santa Monica based certified public accounting firm that has been
in existence since 1953. It is a full service public accounting firm with a business
management practice. Its offices have been in Santa Monica for 30 years. It has the
staff and the experience to fully serve the financial and administrative needs of the Pico
Improvement Organization BID. As fiscal agent for the Pico Improvement Organization
BID, Weil & Company will receive the assessments from the City, pay the BID’s
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invoices, provide monthly bank reconciliation statements, provide monthly budget
reports, and prepare the tax returns. Weil & Company agreed to bill at an hourly rate
ranging from $85 to $130 per hour, not to exceed $5,000 per year.
City staff has had discussions with the VEDC Chief Administrative & Finance Officer for
the past few months regarding this transition to a new fiscal agent. While the contracts
that the City has with the VEDC allow for termination upon ninety (90) days written
notice, the VEDC is interested in making this a quick and smooth transition.
Budget/Financial Impact
There are no financial/budgetary impacts to the City as a result of action on this
recommendation. The costs to the Main Street Business Improvement Association and
Pico Improvement Organization BIDs for fiscal services will be reduced by nearly half.
Recommendation
Staff recommends that the City Council authorize the City Manager to:
1. Terminate the City’s Agreements with the VEDC for the Main Street Business
Improvement Association and Pico Improvement Organization BIDs;
2. Negotiate and execute an Agreement with the Main Street Business
Improvement Association that would authorize the City to transmit to the Main
Street Business Improvement Association its net BID assessments, provided the
Main Street Business Improvement Association submits to the City monthly and
annual financial reports and an annual financial audit; and
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3. Negotiate and execute an Agreement with Weil & Company for the administration
of funds on behalf of the Pico Improvement Organization, at hourly rates set forth
in its proposal, with a not-to-exceed amount of $5,000 per year.
Prepared by: Jeff Mathieu, Director, Resource Management Department
Steve Stark, Director of Finance Department
Miriam Mack, Economic Development Division Manager
Erika Cavicante, Sr. Administrative Analyst
Reference Contract No. 8509 (CCS) (Main St. Bus. Improv. Assoc.)
Reference Contract No. 8510 (CCS) (Weil & Co.)
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