BID getting low on funds while wrangling with city over new budget

After a City Council meeting where City Manager Jason Molino outlined his recommendations for city oversight of the Business Improvement District, the BID's Executive Director Laurie Oltramari told reporters that the BID is almost out of money because the city hasn't turned over the funds it is contractually obligated to release by May 1.

"Even though we're trying to be friendly, we feel like our funds are being held hostage," Oltramari said.

Reached later in the night, Molino said the only hold up with releasing the funds is a lack of a properly amended budget from BID that complies with the state's General Municipal Law.

"The city fully understands they need those funds to operate and will release those funds once the BID budget can be amended," Molino said. "Once compliance is achieved with the law and the budget is properly amended, then we will release those funds."

Oltramari said the BID can operate for about one more month with current reserves. If funds from the city aren't received by then, it would need to suspend operations until the money is released.

Earlier this year, Molino notified the BID that over the past several years the city's assessment of downtown properties to provide funding to the BID has not been in compliance with the law. Molino said he had previously brought this issue to the attention of the BID before Oltramari became director, and it was never addressed. This year, he's holding up the funds until the budget reflects the law's restrictions.

The law limits the BID assessment from exceeding 20 percent of the total levy for the properties in the district, plus an additional amount for repayment of bonds secured to pay for public improvements in the BID zone.  

There was a bond issued in 1999 for public improvements, such as new street lighting, and as those bonds have been paid off, the annual debt expense for the BID has decreased, but through all that time, the assessment hasn't been reduced to reflect the lower debt payments.

As a result, the BID has a capital improvement account with $216,000.

It would be logistically difficult to return those funds to downtown property owners since the amounts vary annually and many properties have changed hands over the years.

Molino is proposing that the $216,000 be held until the BID's next capital improvement project, which raises another point of contention for Oltramari.

Molino is proposing such a plan be developed with consultants and city officials. Oltramari said the BID should lead any effort to identify and plan for capital improvements using those funds since they were raised on behalf of the BID.

Since 2005, the BID has been receiving a flat $120,000 from the city for debt repayment and operational costs, which Oltramari admits she always found strange because it was always the same without any variance for a cost of living adjustments.

"We have gone above it (the GML limit) in order to continue operations because property values are so low in Batavia," Oltramari said.

Under the terms of the GML, the BID's budget for this year is being reduced to $55,000 for operations and $15,000 for debt service, which is the last debt payment from the 1999 bonds. 

That's a severe cut in operational expenses, Oltramari said. In addition to canceling Summer in the City, Oltramari doubts she will be able to keep her assistant on payroll and the BID is looking for new, lower-cost office space downtown.

The current office is on the second floor of the Masonic Temple building at Main and Center streets.

Molino's recommendations provided to the City Council last night include:

• Ensuring the BID amends its budget to comply with the General Municipal Law;
• Identify commingled funds that need to be separated from the BID account, which includes capital improvement funds, operational funds and money generated by BID events;
• Ensure the City Council adopts the proper local laws each year for governance of the BID;
• As part of the local law amendments, require that the BID's board of directors comply with the state's open meetings law and freedom of information law;
• Require the BID to update its district plan in cooperation with residents, businesses within the BID and the city to ensure future budgets and excess capital funds are used in a manner that best represent the business and property owners needs to achieve the organizational mission.

Oltramari thinks there is some overreach by the city in these recommendations.

First, BID board meetings are open to the public, though they're not announced on the BID's Web site, Oltramari said, and approved budgets are available to the public.

The district plan is essentially a business plan and Oltramari contends that's entirely the purview of the BID's board.

"The role of the city is to figure out the assessment and what the BID gets and to assign people to our board, that's about it," Oltramari said. "From there, it is our money to spend, and if we spend it wrong, then it's up to the state comptroller say, 'slap on the hand to you.' "