Business Improvement District Policy

October 2013

Business Improvement District Policy     3

Contents

Definitions	4

Overview	4

Purpose of this policy	4

Framework for partnership between Wellington City Council and
Business Improvement Districts	5
Council responsibilities
BID Association responsibilities

BID objectives	7
What Business Improvement Districts can do
Accountability

Alignment with city strategies	8

Establishing a Business Improvement District	8
Considering a Business Improvement District
Initial consultation
BID boundaries
Setting the targeted rate
Constitution of a legal entity
Developing a list of owners and occupiers
Creating the voter register – eligible voters

Polling in a Business Improvement District	14
Types of polls
Informing voters
Sending out the ballots
The goals of the poll
Proxy and absentee voting
Non-registered eligible voters
Confirming the result
Final decision on BID changes to be made by the Council

Accountability processes of the BID Association	16

The relationship with the Council	16
Applying for the targeted rate
Council – Executive Committee relationship
Council review
BID Performance Survey

Dispute resolution	18
Resolution between the Council and the BID Association
Resolution between owners and BID Associations

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Definitions

Overview

4. Framework for partnership between Wellington City Council and BIDs

BID
Business Improvement District

BID Association
A legal entity constituted to administer the BID

Council
Wellington City Council

Executive Committee
The body elected by businesses in the BID area to govern the operations of the BID

BID Manager
A person recruited or contracted to manage the BID programme

A Business Improvement District (BID) is a partnership between a local authority and a defined local business community to develop projects and services that benefit the trading environment and which align with the local authority’s objectives. A BID is supported by a targeted rate, levied on and collected from non-residential properties within the defined boundary.

A BID provides a vehicle for local business-led initiatives that support key city objectives of vibrant centres, business creation and development and increased employment.

There is no minimum size for a BID; however any proposed BID must demonstrate that it is viable and fit for purpose.

Purpose of this policy

This policy provides guidance for prospective BIDs, and describes the role of Wellington City Council (Council) which is required to approve any BID and collect the associated targeted rates.

The policy addresses:

the responsibilities of the Council and BID Associations
the objectives that a BID must meet

the process to establish a BID

the operation of a BID

managing the performance of a BID.

Council responsibilities

The Council will:

provide information and advice as appropriate

consider whether to set a targeted rate for the purpose of BID programmes
set a targeted rate, providing the Association has complied with the terms of this policy
monitor and review the performance of BIDs.

BID Association responsibilities

The BID Association will:

comply with its constitution and the BID policy

comply with all other relevant laws and regulations

maintain proper meeting and accounting records demonstrating how the targeted rate and grant money is used, and make such records available to the Council on request.

BID objectives

What Business Improvement Districts can do

All BID programmes should develop an in-depth understanding of the particular needs of their business community. The BID policy allows for a wide range of activities that could be undertaken with the provisos that the activities:

align with the Wellington City Council’s strategic objectives and priorities
are relevant for their business community

are not already being undertaken as part of the Council’s responsibilities under the general rating provision. There is no prohibition of BIDs within the Downtown Levy area where a particular business group wishes to provide services additional to those provided by the Council through general rates or through the Downtown Levy.

Accountability

The BID Association is accountable to its eligible voters. It is also accountable to the Council for the use of the BID targeted rate and alignment with the Council BID Policy.

This accountability is supported by the development of a business plan, the measurement of key performance indicators, production of an annual report and financial accounts for its members, and annual reporting to the Council. Audited accounts to be provided: annually where the targeted rate income is equal to or over $100,000; and every second year where the targeted rate income is less than $100,000, or on request by the Council.

The Council is accountable for the collection and payment of the BID targeted rate amount to individual BID Associations, and ensuring the targeted rate collected is spent as intended.
The BID targeted rate may only be applied to the agreed activities of the BID Association and for no other purpose.

Where the Council has serious concerns with performance of a specific BID Association, the BID targeted rate may be withheld until specific improvements or alterations have been made by the BID Association.

In accordance with the provisions of the Local Government Act 2002 and the Local Government (Rating) Act 2002, the Council will make the final decisions on what BID targeted rates, if any, to set in any particular year (in terms of the amount and the geographic area to be rated).

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Alignment with city strategies

Establishing a BID

BIDs have been identified as important elements that can contribute towards delivering Wellington City Council’s strategic objectives, including those identified in the Economic Development and Urban Development strategies and the Centres Policy. They can also play an important part in the Wellington Towards 2040: Smart Capital strategy.

The strategic goals underpinning these strategies include:

attracting, retaining and growing investment, creating jobs, and supporting sustainable economic growth in Wellington City
strengthening the vibrancy and multi-functional nature of centres, including their role as social and community focal points, public transport hubs, places where people live and work, and centres for entertainment, recreation and local services.

The business plan of each BID will clearly set out how it supports the priorities underpinning these strategies. The planning of the BID programme should take account of key Wellington City Council planning and policy documents.

The following steps must be taken by any group proposing to establish a BID:

Undertake initial consultation with the business community on the potential range of services
a BID could undertake to determine its level of support for forming a BID. If there is sufficient interest (indicatively >25 percent support) then the following steps would be undertaken:

Confirm the district boundaries where the targeted rate would apply.

Develop a business plan outlining the proposed activities that will be funded by the targeted rate and which comply with BID policy.

Agree the level of targeted rate required to support the BID budget and the basis for its collection.

Agree a constitution and establish a legal entity to administer the BID. The Council should be consulted on the constitution.

Develop a voting register of eligible businesses within the district.

Undertake full consultation on the targeted  rate and the planned activities and complete an
establishment vote with a majority vote supporting the BID.

Undertake an initial AGM, adopting the constitution, appointing board members and officers and approving the business plan.

Apply to the Council for a targeted rate, with the following supporting documents:

evidence of a mandate from voters
a business plan which is aligned with Council priorities
an approved constitution for the entity.

Gain approval of the targeted rate for the BID in the Council Annual Plan process. Note that the previous steps need to be completed in sufficient time so that steps 9 and 10 can be completed to meet the Annual Plan timelines. This would be expected to be submitted to the Council before November of any year to be included in the following year’s Annual Plan process.

Considering a BID

Discussions to explore the establishment of a BID may be initiated at any time by any interested party. A key factor to support these discussions will be evidence that there is sufficient support from the community to sustain the challenge of establishing and operating a BID.

Initial consultation

One of the first steps is to undertake initial consultation with key stakeholders within (and potentially outside) the proposed area. These stakeholders might include, for example, owners of businesses, land owners and ratepayers, local or central government agencies within the proposed BID, or interested community groups.

This consultation could include a public meeting to communicate the proposal to establish a BID, the area that it is proposed to cover, and its potential objectives and activities.

Following this initial consultation, the group proposing the BID will give feedback to the Council on the response received, and whether they wish to proceed with the establishment of a BID.

BID boundaries

In the first instance, the Council will allow those proposing a BID to determine the boundaries within which the targeted rate will be collected. However, should the Council disagree on the proposed boundaries; the Council’s decision is final, as it
is the Council which takes responsibility for the targeted rate.

Setting the targeted rate

The Local Government (Rating) Act 2002 gives the Council authority to set a targeted rate for an activity such as a BID. The level of the rate needs to be sufficient to support the BID programme of activities. The BID must agree the total budget required for the programme with its members (at an AGM), and advise the Council that the BID targeted rate be included in the Annual Plan of the Council.

Rating options
There are three options for calculating the targeted rate collection. Targeted rates can be established by the:

proportional value method

flat rate method

hybrid method (which is a combination of both the proportional value and flat rate methods).

Council staff will work through the different options with BIDs on a case-by-case basis.

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Proportional value method
Under the proportional value method, the total amount of the targeted rate to be collected is divided by the capital value of the properties within the collection area. As a result, larger capital value properties pay a greater proportion of the targeted rate. Every property will therefore be paying a different BID targeted rate amount.

This method is preferable where owners owning or renting more valuable areas of land or businesses will gain significantly more from the BID programme than owners with less valuable areas of land or businesses.

Flat rate method
Under the flat rate method, the Council applies a flat rate for every rateable business within the BID
programme area. This method is used where there is little difference between the size of the businesses within the boundary or the likely benefits from the BID programme.

Hybrid rate method
The hybrid method involves setting a flat
rate per business and a proportional rate based on capital value.

This method is most appropriate where there are a large number of small businesses balanced by a
smaller number of large businesses operating within the BID area. The advantage of this approach is that it evens out the impact of the targeted rate across all businesses and ensures the larger businesses pay a higher amount proportional to their value.

The hybrid rating method is often the preferred approach for a BID targeted rate.

Constitution of a legal entity

Before a BID can be set up, a legal entity to administer the BID must be established and registered. In many cases an incorporated society structure is used. The Council will not set a rate without evidence that the BID Association has been legally constituted and a constitution has been developed in consultation with the community. The Council should be consulted on the BID Association’s constitution before registration.

Developing a list of owners and occupiers

A list must be compiled of owners and occupiers within the agreed boundaries of the BID. Businesses occupying, but not owning property, will need
to be identified. The Council will compile property owner details. The list will form the basis of the voter register.

The following are not covered under this policy, will not be on the voter register and will not become liable for the targeted rate:

private (non-business) residents

properties owned by either local or central government (wholly or proportionally) including educational facilities, government offices and any property not attracting a commercial rate
business owners who operate their businesses from residentially rated property within the BID
business owners who give a business address which is a commercial property within the BID, but who

do not physically run their businesses from that address (for example, businesses who use their accountant’s address, or businesses who have mail delivered to a relative or friend running a business within the BID).

Those proposing the BID have the final decision over eligibility, in consultation with the Council.

New properties or redeveloped properties liable to pay the BID targeted rate and appearing in the BID area during any financial year will not be rated until the following financial year. These properties have the impact of redistributing the existing total BID targeted rate collected.

Creating the voter register – eligible voters

Every owner and occupier within the proposed district must be contacted to determine who will be registered as a voter on the final voter register.

This policy is based on the principle of ‘one person, one vote’.

If the owner and/or occupier is an individual, that person should be registered as the voter unless they nominate someone else to act on their behalf. All future communication from those proposing the BID or the eventual BID Association must be addressed to that nominated individual, unless the owner
or occupier subsequently communicates a desire to nominate a different representative to the
BID Association.

If the owner and/or occupier is not an individual, those proposing a BID must communicate with the owner’s management and request the name of a nominated representative to register as a voter.

All registered voters automatically qualify to become members of the BID.

Once established, it is the responsibility of the BID to maintain and update the membership register.

Polling in a BID

Types of polls

Those proposing a BID should consult with Council on the timing of BID voting. Polls must be completed in sufficient time so that they can be ratified by the Council and any changes included in the Annual Plan process (refer to section 7 of this policy).

BID polls must be run in the following circumstances.

Establishing a BID
A poll is held when the BID is being established to ensure that the rateable businesses within the district boundaries support the proposal.

Increasing or decreasing the boundary
A BID may be expanded to include adjoining areas not included in the original proposal.

Where the BID is to be expanded, the BID Association must arrange for a poll to be conducted in the expansion area only. In the event of a BID boundary being reduced, a poll is conducted for the whole
BID area because this change implies a reduction in budget for the whole programme.

Dissolving a BID programme
This may be called by the BID Association at any time, however the Council does not need a
disestablishment poll to stop setting a targeted rate.

Informing voters

The BID Association must inform all registered voters of any poll and ensure voters are aware of the key issues to be decided. Such issues include, but are not limited to:

the boundaries of the proposed BID

the total budget and approximate targeted rate to be assessed
the objectives of the BID strategic and business plans
the contacts for those proposing the BID.

To achieve these aims, those proposing a BID must:
advise and hold at least one information meeting, open to all interested parties, no less than 10 days before the poll closes
place at least two advertisements about the poll in local newspapers, at least seven days apart, with the last advertisement a minimum of three days before the poll closes.

Additional methods may be used to inform eligible voters of the vote, such as face-to-face meetings, email, fax or newsletters.

Sending out the ballots

The Council will provide the services of its returning officer or recommend one for the group to use. The group will contact the returning officer as soon as the voter register has been finalised to enable the election service to begin preparing for the poll. Material prepared for the poll will include:

a copy of the register of voters

a copy of an easy-to-understand information sheet outlining the BID proposal
a copy of a ballot form approved by the independent election service
a copy of a contact update form which includes the name of the nominated representative of the business
boundary information if the poll includes an increase or decrease of the BID boundary area.

The Council’s returning officer will send out an envelope including the information sheet, the ballot form, the contact update form and a prepaid return envelope.

The goals of the poll

It is a goal of the BID poll to achieve a 25% voting return from the eligible voters for that poll; and with the majority of those votes to be in favour of the proposition. (This majority must be by number of eligible voters voting in the poll, and those voting
in favour must also represent the majority of rating valuation of those voting). This ensures that the vote has a high level of participation and has majority support by both larger and smaller entities within the district.

The higher the level of the voting return achieved by the poll, the greater the level of assurance for the Council in any decision to support, or not support, a targeted rate.

Proxy & absentee voting

Proxy voting is not permitted for BID polls. Registered voters who will be absent from their registered addresses during the period of
the poll, but who wish to vote, should provide a forwarding address to the BID.

Non-registered eligible voters

Those proposing a BID should attempt to ensure all eligible voters in a BID area are registered. In the event that an individual believes he or she is entitled to vote, but does not appear on the register of voters, the returning officer shall determine the status of the individual and whether a ballot should be issued to that individual.

Confirming the result

The independent election service will receive, count and verify all returned ballot papers. It will then report the result of the poll to those proposing the BID or BID Association and the Council.

Final decision on BID changes to be made by the Council

The final decision about whether to establish, extend, reduce or disestablish a BID shall be made by the Council because, under the Local Government (Rating) Act 2002, it is the Council alone which can set the targeted rate. In making that decision, the Council will take into account, but will not be bound by, the poll result.

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Accountability processes of the BID Association

The relationship with the Wellington City Council

The BID Association will be required to have processes in place to ensure that it can demonstrate accountability to the levy payers.

This will include having:

an appropriate constitution including membership rights for any eligible voting business within the boundary area (and any associate membership types) and entitlements of the individual member
meeting processes including for the initial annual general meeting following a successful
establishment poll and subsequent annual general meetings
processes for the appointment of any officers and Executive Committee and their rights and responsibilities
processes for the development, approval and updating of the BID Association budget, strategic and business plans, and performance measures.

The Council must be advised of any changes to the constitution and the contact details of elected officers and committee members.

Applying for
the targeted rate

Once confirmation of legal incorporation has been received, the BID Association can apply to the Council for a targeted rate. The BID Association must present the following information to the Council:

evidence of a mandate

evidence of incorporation

the agreed BID boundaries

the budget that has been ratified at the AGM

the business plan that has been ratified at the AGM.

Any payment to the BID Association from the targeted rate will be by a conditional BID Funding Grant under the Local Government Act 2002. Consistent with
the Local Government Act 2002, the grant must be separately accounted for in the BID Association’s financial records.  The funding generated from any BID targeted rate will be paid to the BID Association after the end of each financial quarter.

Council – Executive Committee  relationship

The BID Association and the Council will at all times communicate with each other in such a way as to most effectively further the strategic objectives of the stakeholders and to protect and enhance the
partnership relationship between the BID Association and the Council.

The Council’s Annual Plan and budget process provides a mechanism for reviewing BID budgets and existing programme boundaries. In order for the Council to change the targeted rate, the Executive

Committee must submit a detailed programme, budget and performance reports.

By the end of November each year, the Executive Committee must provide the Council with the following information:

a copy of the financial audited accounts/financial accounts (refer Section 5.2) and annual report for the previous financial year (including statements that the association has acted in compliance with its constitution and all other relevant laws and regulations)
any proposed changes to the boundaries.

In January each year, the Executive Committee must provide the Council with a detailed programme
and budget for the period 1 July to 30 June (the next financial year).

Council review

In the Council’s planning processes, it will review the performance of the BID against the stated strategic and business plans, KPIs, financial audited accounts/ financial accounts (refer Section 5.2) and any reporting.

Where the Council has concerns with the progress or success of a BID, the targeted rate may be withheld until specific improvements or alterations have been made to the business, communication or strategic plans, or implementation processes.

In accordance with the provisions of the Local Government Act 2002 and the Local Government (Rating) Act 2002, the Council will make the final decisions on what targeted rate, if any, to set in any particular year (in terms of the amount and the geographic area to be rated).

The Council may initiate a review of all or any particular BID programme outside the annual and three-yearly reviews. Such a review will be funded through general rates.

BID Performance Survey

The Council may commission a BID performance survey. The results of the survey will be used to analyse the performance of individual BIDs as well as the success of the BID programme on a citywide basis.

The survey process and delivery will be formulated  in collaboration with all of the BID programmes to ensure a high rate of return and clarity of objectives. An approach of continuous improvement will be used for the survey to ensure that latest technology and best-practice methods are considered and used where possible.

The cost of the survey will be funded proportionally (based on BID programme budgets) by the city’s BIDs through the targeted rate.

The primary focus of the survey will be on the business community’s perception of the effectiveness of the BID programme in each district. The survey will cover such aspects of the BID programme as: overall satisfaction; the ability of eligible voters
to influence the programme; the results achieved; the communication processes used; and other such matters agreed between the Council and the associations administering BID programmes.

Dispute resolution

Resolution between the Council and
the BID Association

Any decisions about whether or not to set a targeted rate, the amount of that rate, to provide for an additional rate or alter the boundaries of the area subject to the rate, and whether or not to establish, disestablish, reduce or extend the BID, are within the discretion of the Council to make as part of its annual funding and rating decision-making process.

Any other disputes between the BID Association and the Council will be settled in accordance with the following procedure:

Having exhausted normal means of resolving a dispute or difference (by engaging in a process of good faith negotiation and information exchange), either party may give written notice specifying the nature of the dispute and its intention to refer such dispute or difference to mediation.
If a request to mediate is made then the party making the request will invite the chairperson of the Arbitrators and Mediators of the Institute of New Zealand Inc (AMINZ) to appoint a mediator to enable the parties to settle the dispute.
All discussions in the mediation will be without prejudice and will not be referred to in any later proceedings. The parties will bear their own costs in the mediation and will equally share the mediator’s costs.
If the dispute is not resolved within 30 days after appointment of a mediator by AMINZ, any party may then invoke the following provisions:
The dispute will be referred to arbitration by a sole arbitrator in accordance with the Arbitration Act 1996.
The award in the arbitration will be final and binding on the parties.

Resolution between owners and
BID Associations

Disputes between owners or their nominated representatives (ONR) and the BID Associations will be settled in accordance with the following procedure:

Unless matters can be resolved quickly and informally, ONR are obliged to bring their concerns to the attention of the BID Association’s Executive Committee in writing. An initial written response is required within seven working days, outlining the manner and the timeframe in which the concerns will be addressed. The Council as the major fund provider should be made aware of any such issues.
Having exhausted reasonable means of resolving the dispute, the BID Association may approach the chairperson of the Arbitrators and Mediators of the Institute of New Zealand Inc (AMINZ) to appoint a mediator to enable the parties to settle the dispute. All discussions in the mediation will be without prejudice and will not be referred to in any later proceedings. The parties will bear their own
costs in the mediation and will equally share the mediator’s costs.
If the dispute is not resolved within a further 30 days after appointment of a mediator by AMINZ, any party may then invoke the following provisions:
The dispute will be referred to arbitration by
a sole arbitrator in accordance with the Arbitration Act 1996.
The award in the arbitration will be final and binding on the parties.

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