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Quarterly: Spring 2020 - Jane Dunkel

Auditing Business Improvement Areas


By Jane Dunkel

If you live in a major city in the United States, chances are there is a Business Improvement Area (BIA) nearby. This article explains how BIAs are used, shares our audit of Seattle’s downtown BIA, and provides suggestions for future audits.

What is a Business Improvement Area?

BIAs are funding mechanisms for business and property owners to address various needs in their districts. They are designed by the business and property owners in the district, and everyone within the BIA pays their fair share. It is a community-driven way to address the varying service needs throughout a city. These can be things like extra security, cleaning, special events, and parking programs. Business Improvement Areas, which are sometimes called Business, Special, or Local Improvement Districts (BIDs, SIDs, LIDs), vary in scope and budget, and exist throughout the United States and around the world.

Many large cities in the U.S. have more than one BIA. For example, Seattle has 10 BIAs; New York City has 76, and Cleveland has 3. A quick internet search of your state or local jurisdiction should let you know if your jurisdiction has BIAs, and if so, how many, and the areas they cover. If you find any of interest, you can then search using the name of the BIA, as most have their own websites that describe how they are organized and the services they provide.

In Washington State, counties, cities, and towns may establish BIAs if they receive a petition from at least 60 percent of the ratepayers within the proposed area and the proposal describes the purposes for which funds will be used. Each BIA is governed by a ratepayer's advisory board that is responsible for creating bylaws and making key decisions on programs and services, budgets, goals, policies, and staffing. Because the City of Seattle collects the assessments on behalf of the BIA and reimburses its monthly expenses, the BIAs fall within the purview of our audit office.

Our Audit of the Downtown Seattle Business Improvement Area

The Metropolitan Improvement District (MID), founded in 1999, is a business-improvement area spanning 285 square blocks in downtown Seattle. The MID was reauthorized in 2013 and expanded to cover the Belltown neighborhood. The MID’s mission is to create a healthy, vibrant downtown Seattle.


When the Seattle City Council approved the reauthorization of the MID, and its expansion into Belltown in May 2013, they included a performance audit requirement in the authorizing legislation. This was important to Belltown businesses and stakeholders as the MID was a large and established BIA, and Belltown ratepayers wanted to ensure that the funds they contributed would be used to the benefit of their neighborhood. Accordingly, the ordinance asked us to assess whether, three years after implementation, the Belltown area has received the general types and levels of services described in the MID Business Plan.

What Did We Do?

We evaluated whether the Belltown neighborhood was receiving services in the six priority areas outlined in the MID’s 2013 Business Plan:

  1. cleanliness
  2. safety, outreach, and hospitality
  3. marketing and communications
  4. business development and market research
  5. transit, bike, and parking
  6. management

To make this determination, we used typical auditing tools, such as interviewing agency managers and reviewing agency documents and data, to test if the services described in the plan were being provided. Additionally, this audit required observing the work of the MID’s Clean and Outreach Ambassador teams as they completed their daily tasks that are described below, and interviewing community stakeholders in the Belltown neighborhood to obtain their feedback on the services the MID provided in their neighborhood.

What Did We Find?

We found that the MID provided 33 of the 34 services we tested, and it had plans to provide the remaining service. Below, we provide more detailed information on two of the required services the MID provided: 1) cleanliness and 2) safety, outreach, and hospitality.

Cleanliness

The MID has a crew of Clean Ambassadors out on Seattle streets seven days a week. Their job is to sweep sidewalks and curbs, remove trash and other debris, empty trashcans, and remove graffiti tags on public property. We observed a morning weekday Clean Ambassador perform his duties and documented that he completed all the tasks described above. We noted that he focused cleaning in areas of high transit and pedestrian activity. We also observed another Clean Ambassador using a Green Clean Machine to sweep and vacuum the sidewalk. Clean Ambassadors report hazardous waste (human or animal waste or hypodermic needles) to the MID dispatcher who sends Clean Team Supervisors to remove it. All the Belltown stakeholders with whom we spoke said that, in their opinion, the streets were much cleaner since the advent of the MID’s clean services.

Safety, Outreach, and Hospitality

The MID also has daily Safety Ambassadors and Outreach Ambassadors. The Safety Ambassadors work in teams that patrol different areas of the district. Their job is to conduct daily wakeups of persons sleeping in doorways and in the public right-of-way, do welfare checks, and provide service referrals for people living on the streets. They address illegal behavior such as illegal vending, trespass, or aggressive panhandling. Safety Ambassadors also provide hospitality services (directions, transit information) to visitors. All Safety Ambassadors receive mental health training and follow strict protocols to ensure their own safety.


The Outreach Ambassadors work to connect people experiencing homelessness and people with mental health conditions with services such as housing, treatment, employment, and other basic needs. The MID also contracts with the Seattle Police Department (SPD) for additional police bicycle patrols within the MID’s boundaries. The MID Safety Ambassadors we observed told us that these SPD patrols are very helpful to them because the patrols respond immediately to their calls for assistance.

We were impressed with the range and depth of the services the MID provides to its stakeholders, and the fact that their workers are often the ones “on the front lines” of the efforts to address some of the most intractable problems facing our city.

Business Improvement Area Audit Ideas

Here are some ideas for auditing your local Business Improvement Area:

  • Financial accountability – is the City accurately and appropriately assessing, collecting and disbursing BIA funds?
  • Compliance – are the BIAs providing the programs and services they committed to in their authorizing legislation and business plans?
  • Effectiveness – are the BIAs using evidence-based practices in the programs and services they implement?
  • Program accountability – do the BIAs have performance measures in place for the programs they run, and do they report these to their stakeholders on a regular basis?
  • Equity – Is there parity between the BIAs in your jurisdiction— i.e., between the ones that serve more affluent areas compared to those that serve less affluent areas?

One criticism of BIAs is that while large, wealthy BIAs have been found to have a significant impact on commercial property values and quality of life, smaller BIAs have only a negligible impact on these things. To try and prevent this disparity in outcomes, the Newark, New Jersey Community Economic Development Corporation is working on establishing parity and shared standards of excellence across all its BIAs and Special Improvement Districts. It might be interesting to compare the BIAs in your jurisdiction in terms of budget, scope of work, impact and the communities they serve.

Conclusion

Our audit of Seattle’s downtown BIA revealed positive results, as the district board was providing the benefits promised in their business plan. Still, given that some BIAs have multi-million dollar budgets and that there may be equity concerns related to service delivery, BIAs can be a useful topic to audit.

About the Author

Jane Dunkel has worked for the City of Seattle's Office of City Auditor for over 18 years. During that time, she has witnessed tremendous change in the city, which means the work is never dull! Jane was a long-time member of the Knighton Award Committee, and has enjoyed going to ALGA conferences and getting to know colleagues from all over the United States, Canada and the world.