SR 06-12-2018 3I
City Council
Report
City Council Meeting: June 12, 2018
Agenda Item: 3.I
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To: Mayor and City Council
From: Andy Agle, Director, Housing and Economic Development, Economic
Development Division
Subject: Fiscal Agent Services for Pico Improvement Organization
Recommended Action
Staff recommends that the City Council authorize the City Manager to negotiate and
execute an agreement with the Pico Improvement Organization, Inc., for fiscal
management of the Pico Boulevard business improvement district assessment funds for
five years with five additional one-year renewal options.
Executive Summary
Fiscal agents provide financial services to business improvement districts such as
reconciling bank accounts, processing payments, and preparing monthly financial
reports. Staff recommends that the City Council approve an agreement with the Pico
Improvement Organization, Inc., to self-administer the Pico Boulevard business
improvement district assessment proceeds, similar to the City’s agreement with the
Main Street Business Improvement Association.
Background
Established in 2000, the Pico Boulevard business improvement district (Pico BID) was
created by the Pico Boulevard merchants and established by a City Ordinance. The
Pico BID is comprised of properties bordering the entire length of Pico Boulevard from
the Pacific Ocean to the eastern City limits at Centinela Boulevard. Incorporated in
2005, the Pico Improvement Organization, Inc. (PIO) is a 501(c) (6) nonprofit
organization which oversees the use of the Pico BID funds, promotes business and
commerce within the commercial corridor, and fosters goodwill with the residential areas
immediately adjacent to Pico Boulevard.
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The district has an annual budget of approximately $90,000 and is made up of
approximately 385 business members. Businesses within the designated area pay a
special assessment based on their business license classification. The City retains five
percent of the collected assessments to pay for administrative expenses and remits the
remainder to a City-approved fiscal agent to be used by the Pico BID for programs and
projects that benefit their members. Assessment funds have been used for streetscape
beautification (murals and landscaped medians), marketing and promotion of Pico
Boulevard and its businesses, and special events including the Pico Fitness Crawl and
Holiday Walk.
Initially, the Santa Monica Chamber of Commerce was approved as the fiscal agent
responsible for administering funds collected through three business improvement
districts (BIDs): Montana Avenue, Main Street, and Pico Boulevard. In 2001, the
Chamber of Commerce requested that the City seek an alternative fiscal agent. At that
time, staff recommended contracting with an incorporated entity with experience in
small business support services. On April 10, 2001, Council authorized an agreement
with Valley Economic Development Corporation for fiscal agent services, small business
support, and administrative services such as mailings and minutes for the three BIDs.
On September 13, 2005 (Attachment A), Council authorized an agreement with Weil &
Company (Weil) to provide fiscal agent services for the Pico BID (and a year later for
the Montana BID) and authorized an agreement with Main Street Business
Improvement Association (MSBIA) to self -manage Main Street BID funds since the
MSBIA’s capacity had grown over the years.
Discussion
The PIO has evolved over the years to become more active in the organization’s fiscal
management, and currently employs a part-time secretary responsible for administrative
services and business support. Annual expenses for Weil are approximately $10,000,
more than 10 percent of PIO’s budget. After researching alternatives, the PIO
determined that the organization’s needs would be better served and expenses would
be reduced if they self-administered the Pico BID assessment funds and contracted with
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a local accounting firm to provide annual tax services. On May 2, 2018, the PIO Board
of Directors voted to discontinue its services with Weil.
Staff recommends that the City Manager negotiate and execute an Agreement with the
PIO that would authorize the City to transmit to the PIO its net BID assessment funds,
provided that the PIO submits to the City monthly and annual financial reports and a
financial audit, if requested. Similar to MSBIA, PIO plans to reduce costs by contracting
with a local accountant familiar with non-profit organizations, rather than a full-service
accounting firm.
As a fiscal agent, PIO would be responsible for the administration of their BID’s
accounting needs, which include the following:
Receive the assessments from the City, as well as other revenues collected by PIO,
and deposit the funds in a checking account established in PIO’s name with a local
financial institution.
Ensure that all funds disbursed are in accordance with Board authorization to p ay for
services associated with PIO’s activities and programs. The disbursement includes
issuing and mailing checks on an as-needed basis.
Provide monthly financial reports to the City. Create and maintain an Actual vs.
Budget report that compares budgeted revenue and expenses to actual revenue and
expenses.
Within 90 days following the close of the fiscal year, submit a reviewed financial
statement for PIO prepared by an independent certified public accountant.
Submit a copy of PIO’s annual tax return to the City in a timely manner. An
independent certified public accountant shall prepare the tax return.
Provide the City with copies of all financial reports that are submitted to the Board of
Directors.
Financial Impacts and Budget Actions
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There is no immediate financial impact or budget action necessary as a result of the
recommended action.
Prepared By: Kriss Casanova, Senior Development Analyst
Approved
Forwarded to Council
Attachments:
A. September 13, 2005 Staff Report (Web Link)
B. Oaks Initiative PIO
(Attachment A)
City of Santa Monica
Oaks Initiative Disclosure Form
All persons or entities receiving public benefits defined below from the City of Santa Monica
shall provide the names of trustees, directors, partners and officers and names of those with
more than a 10% equity, participation or revenue interest. This information is required by City
Charter Article XXII—Taxpayer Protection.
Name of Entity: ____________________________________________
NAME(S) OF PERSONS OR ENTITIES RECEIVING PUBLIC BENEFIT:
NAME(S) OF TRUSTEES, DIRECTORS, PARTNERS, AND OFFICERS:
NAME(S) OF THOSE WITH MORE THAN A 10% EQUITY, PARTICIPATION OR
REVENUE INTEREST:
Public benefits include:
1. Personal services contracts in excess of $25,000 over any 12-month period;
2. Sale of material, equipment or supplies to the City in excess of $25,000 over a 12-month period;
3. Purchase, sale or lease of real property to or from the City in excess of $25,000 over a 12-month period;
4. Non-competitive franchise awards with gross revenue of $50,000 or more in any 12-month period;
5. Land use variance, special use permit, or other exception to an established land use plan, where the decision has a value
in excess of $25,000;
6. Tax “abatement, exception, or benefit” of a value in excess of $5,000 in any 12-month period; or
7. Payment of “cash or specie” of a net value to the recipient of $10,000 in any 12-month period.
Prepared by: __________________________ Signature: ________________________
Date: __________________________ Title: ________________________
FOR CITY USE ONLY:
B i d / P O / C o n t r a c t # _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ P e r m i t # _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
(1/06)
REFERENCE:
Contract No. 10695
(CCS)