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Home My WebLink AboutRS02-Redevelopment Agency ____.1 ,. 41"., ... -..' - -.. B C 0 BOCC DBVBLOPMBBT AG;:::)CY OF TIlE CITY OF SAB BBRllARDIBO REQUEST FOR COMMISSIOB/COlJlllCIL ACTIOB From: TIMOTHY C. STEINHAUS Administrator Subject: MAlB STREET BUDGET Date: August 12, 1992 SvnoDsis of Previous Commission/Council/Committee Action(s): On July 20, 1992 the Community Development Commission considered approval of the FY 1992/1993 Economic Development Agency budget and continued the matter until August 3, 1992. On August 3, 1992, the Community Development Commission considered approval of the FY 1992/1993 Economic Development Agency budget and approved the portions of Administrative Services, Development Department and the Convention and Visitors Bureau, and continued the matter of Main Street until August 20, 1992. Recommended Motion(s): (Communitv Develooment Commission) MCTIOB That the Community Development Commission ratify its prior action maintaining Main Street program expenditures at the FY 90/91 budget levels, formally incorporate the Main Street program into the Economic Development Agency, approve items 1-7 set forth in detail in the attached staff report and instruct staff and agency counsel to take any and all steps necessa 0 expediti usly accomplish the intent of this ~ TBIBHAUS. Administrator Bconomic Development Agency Contact Person(s): Timothv C. Steinhaus Phone: 5081 Project Area(s): Central Citv (CC) Ward(s): One (1) Supporting Data Attached: Staff Reoort FUNDING REQUIREMENTS: Amount: $_N/A_ Source: Bond Proceeds Private Funds Budget Authority: Previouslv Established Commission/Council Botes: TCS:lag:0967E COMMISSIOB MBETIBG AGDDA Meeting Date: 8/17/1992 Agenda Item l'IuIIIber: R6 - 2. --.1.' , , ....' " ,,-,.i , , ....J o ,j BCOBOMIC DBVBLOPMBBT ACl""BCY OF TIlE CITY OF SAB BBRllARDIBO STAFF REPORT Main Street BudRet On September 5, 1990, the Mayor and Common Council and the Community Development Commission established an Economic Development Agency comprised of the consolidated Community Development/Redevelopment Agency entity, the Main Street Program, the Convention and Visitors Bureau and the San Bernardino Economic Development Council. On August 3, 1992, the Community Development Commission approved the portion of the FY 92-93 Economic Development Agency budget relating to Agency Administration, Development Department and Convention and Visitors Bureau, and continued to August 17, 1992 that portion of the FY 92-93 proposed budget relative to Main Street. At the request of several Councilmembers, staff reviewed Main Street's proposed budget with Ann Harris, Executive Director, and determined that certain administrative changes could result in substantial cost savings in the amount of $128,433 without any negative impact to Main Street programs. It is staff's opinion that authorizing the administrative changes listed below would enhance and focus the objectives of both Main Street and the Economic Development Agency, thereby creating an efficient and cooperative network between the downtown businesses and the City. The following is a list of recommended changes to the Main Street program: 1. Incorporate the Main Street program into the Economic Development Agency organization and under the authority of the Community Development Commission. 2. Grant the authority of the Board of Directors to the Members of the Common Council, and create an advisory board consisting of the existing Board of Directors. It has been determined by Agency Special Counsel that these changes are possible and that the appropriate modifications can be made to both the Articles of Incorporation and the Bylaws of Main Street (see attached letter marked Exhibit A). 3. Retain Main Street's tax-exempt status. Agency Special Counsel states that so long as Main Street does not undertake any activities that would have an adverse effect upon its tax-exempt status, and so long as it continued to file the necessary forms with the appropriate State and Federal offices, the tax-exempt status of Main Street would be preserved. ------------------------------------------------------------------------------- TCS:lag:0967E COMMISSIOB MBETIBG AGDDA Meeting Date: 8/17/1992 Agenda Item Bumber: R5- tz. --, ... ' 'liooi ,. , ,,; ,.., -...' DEVELOPMBl'lT DBPARTPuur.r Main Street Budget August 12. 1992 Page l'IuIIIber -2- Sg,. REFORT \. .,./ ~ 4. Relocate Main Street into vacant office space within the EDA office building, located at 201 North "E" Street. Said relocation would greatly reduce the operating expenses of the Main Street program in the areas of rent, utilities, and other operational overhead, besides providing greater accessability to the general public. S. Authorize and direct the Administrator of the Economic Development Agency to work with the Main Street Board of Directors in developing and submitting to the Community Development Commission for approval a Main Street budget for fiscal year 1992/1993. (See Exhibit "B") 6. Incorporate the employees of the Main Street organization into the Economic Development Agency/Community Development Commission organization, Offering full employee benefit incentive packages. Main Street's salaries and expenses would fall within the parameters of the overall Economic Development Agency administrative budget, thereby requiring Main Street to follow standard Community Development Commission procurement policies and procedures. 7. Authorize staff to contact an outside organization, such as the National Main Street Center to review and analyze the future direction of the Main Street program. Based on the aforementioned, staff recommends adoption of the form motion. ----'2 ft ~ TIMOTHY C. STBIBHAUS. Administrator Bconomic Develo~ent Agency TCS:lag:0967E COMMISSIOIr MBETIBG AGDDA Meeting Date: 8/17/1992 Agenda Its Bumber: ~S-;L __I" " 'i (: - (: ,,- """ If f, fi<Ar'J/..f- J1 \. ..I SABO & GREEN A PRO.--JONAL CORPORATION ATTORNEYS AT LAW SUITE 400 8380 CANOGA A VENUE W<K>DLAND HILLS. CALIFORNIA 91387 (818) 704-0195 TELECOPIER c8181 70+4789 August 11, 1992 Mr. Timothy C. Steinhaus Agency Administrator Economic Development Agency of the City of San Bernardino 201 North "E" Street, Third Floor San Bernardino, California 92401-1507 Re: Main Street, Inc. Dear Mr. steinhaus: You have requested our opinion with regard to the proposed restructuring of Main Street, Inc. ("Main Street"), by the inclusion of Main Street within the organizational structure of the Economic Development Commission of the City of San Bernardino. You have specifically asked us to determine the following: 1. Whether the Members of the City Council of the City of San Bernardino could become the Board of Directors of Main Street; 2. Whether the existing Community-based Board of Directors of Main Street could become an advisory board to the City Council Members sitting as the Board of Directors of Main Street; and 3. Whether the appointment of the City Council Members as the Board of Directors of Main Street would jeopardize the 50l(c) (3) Federal tax-exempt status of Main Street or the exempt status of Main Street for State of California tax purposes. It is our opinion that it is possible for the necessary changes to be made to both the Articles of Incorporation and the Bylaws of Main Street to enable the City Council Members to become the Board of Directors of Main Street. In taking action as the Board of Directors of Main Street, the city Council Members would be required to comply with all California laws with regard to the f5-~ __.lo. . ,-.. \....; ,....... ,-"' August 11, 1992 f" ' Page 2 \., conduct of meetings, conflicts of interest and similar provisions as if sitting as the governing body of a California governmental agency. IfI'"', ....,' The appropriate modifications could also be made to the organizational documents of Main street to provide for an appointed advisory board, which could have as broad a review and advisory role as the City Council Members sitting as the Board of Directors might designate. The individuals serving on the advisory board would be required to comply with the applicable financial reporting requirements, and advisory board meetings would have to be - conducted as public meetings under the applicable provisions of the Brown Act (California Government Code Section 54950, ~ ~.). We have researched the matter with regard to the maintaining of the tax-exempt status of Main Street and have additionally discussed this item with representatives of the Internal Revenue Service and the Franchise Tax Board. Our conclusion is that so long as Main Street did not undertake any activities that would have an adverse effect upon its tax-exempt status, and so long as it continued to file the necessary forms with the appropriate State and Federal offices, the tax-exempt status of Main Street would be preserved. The mere substitution of elected officials such as the City Council Members as the Board of Directors in and of itself will not cause Main Street to lose its Federal or State tax-exempt status. Should you have any other specific questions with regard to this matter, please do not hesitate to contact us. Very truly yours, SABO & GREEN, A Professional Corporation 0', ! I I ( J ./'v J ,JJ .->--__________ - Charles R. Green CRG:df SBEOIOOOIILTR\65 - ''-0 ' 0<_, t"-- -./ ex -~ . -, '. . Exll/(],lT'[S '....., i " Main Street - '-, San Bernardino Downtown Main Street, Inc. 290 North "0" Street. Suite 602 San Bemardino. CA 92401 (714) 381-5037 u '3" August 13, 1992 Mr. Timothy C. Steinhaus Agency Administrator Economic Development Agency 201 N. "E" Street, Third Floor San Bernardino, CA 92401-1507 RE: MAIN STREET BOARD OF DIRECTORS OPINION REGARDING ESTABLISHING OF MAIN STREET, INC. AS A DIVISION OF THE ECONOMIC DEVELOPMENT AGENCY ,. , .-... j Dear Tim: A meeting of the Board of Directors of Main Street, Inc. was held Monday, August 10, 1992. All members except Dee Feldmeir and Father Lo Pinto were in attendance. It is the opinion of this Board that the motion entered by Councilman Ralph Hernandez was done in total disregard of the Main Street, Inc. 's Board of Directors, the downtown business community, and the facts. In an effort to address the issues raised at the August 3, 1992 Community Development Commission meeting, it was decided that Main Street Board Members would schedule meetings with individual Council members and Mayor Bob Holcomb. Continued ... ,. 1(5-c2 _L~I . ~ v --- J ,., " , '", Mr. Timothy Steinhaus August 13, 1992 Page Two Ann Harris has been advised by the Main Street Board of Directors to cease all negotiations or discussions with the Executive Director of EDA or EDA staff pertaining to the 92-93 budget. All negotiations/discussions/or agreements upon any portion of the 92- 93 budget will be completed between EDA and the Executive Board of Main Street, Inc. Please call me at (714) 889-6026 to arrange a time when the Executive Board can discuss this matter with you. Board ~ JC/jc '-', "-.1 -, ....' U~. ., I C.J -,/ _;.1' o 0 Main Street - San Bernardino Downtown Main Street, Inc. 290 North "0" Street, Su~e 602 San Bernardino, CA 92401 (714) 381-5037 August 17, 1992 Honorable Mayor and Council: Several issues were raised at the August 3, 1992, Council Meeting. As the Main Street Board, we feel the facts regarding these issues need to be stated to the Mayor and Council and the Public and become a matter of record. "Accountability" 1. Main Street has. in fact, been audited as part of RDA' s Annual Audit. An independent audit has just been completed by Don Lucia, CPA firm. 2. Agency Administrator attends Main Street Board Meetings; also minutes of meetings are provided to Mayor and Council. 3. Quarterly and Year-End Financial Reports are provided to the Agency Administrator, and Mayor and Council. 4. All Main Street accounting is done by a professional certified public accounting office (Rogers, Anderson, Malody & Scott). "Main Street Has a $600,000 Administrative Budget" 1. Main Street's total proposed budget (as approved by the Board) is $617,019. 2. $124,000 or 25\ of the budget is from private sources. 3. 52\ of total budget is for programs. 4. 10% is administrative. 5. 38% of total budget is for salaries, benefits, and payroll taxes. ('OC t.-.J[(.<.t A')-~ -,j. -- I' . .......... - \..J Honorable Mayor and Council August 17, 1992 Page 2 "Main Street's Goals Are Different Than The City's Goals" 1. Main Street's goals and objectives are approved yearly by the Mayor and Council as part of the budget process. 2. Main Street's mission is the revitalization of downtown San Bernardino. "Main Street Would Be More Efficient Under EDA" 1. Main Street's autonomy from the bureaucracy makes us more efficient. The Main Street program is run like a private business; being results-oriented and very productive. 2. The best way to improve the efficiency of Main Street is to have more cooperation from the City and EDA. "Duplication of Efforts" 1. The EDA, Main Street, CVB, and the Development Department meet every two weeks to coordinate our efforts to prevent duplication. 2. No other agency is doing what Main Street is doing. Street's efforts are on downtown, freeing the EDA and staff to concentrate on other areas of the city. Main City "Oversight" 1. The Main Street's Executive Director is in contact with the Chairman of the Board or other Board Members. EDA Agency Administrator and Main Street's Executive Director meet weekly and are in constant contact. 2. Minutes of all Board meetings are provided to the Agency Administrator, Mayor and Council. Quarterly activity and financial reports are also provided to the Agency Administrator, Mayor and Council. 3. In essence, the Executive Director of Main Street reports to nine Board Members, the Agency Administrator, the Mayor, and seven Council Members. -,. . o --.. : J - Honorable Mayor and Council August 17, 1992 Page 3 "The Tourist Industry Taxed Themselves" 1. Downtown businesses have been paying a Special Business Area Tax since 1967, in addition to a Special Parking Assessment Tax. The success of the Program can be measured by the visual evidence such as Street Scape and Special Events, but more important is the 1,084 Jobs that have been created or retained, 251.081 sa. ft. of space that has been filled or retained, and over $1.072.620 in kind donations from the Private Sector to the Program. We are dedicated to the continued revitalization of downtown San Bernardino and will cooperate with EDA in those efforts. We urge this Council to keep the organization under the direction of a Board of Directors made up of business leaders whose lives are being effected. sincerey {?C/ Vd' . c: JERRY CASILLAS Chairman of the Board