Business Improvement District programmes enable businesses within a defined area to work with their local community board, the Council and other key organisations to improve the local business environment.
1. Background and context
1.1 Purpose of the Christchurch City Council Business Improvement District programme
Business Improvement District (BID) programmes enable businesses within a defined geographic area to work with their local community board, the Council and other key stakeholder organisations to improve the local business environment.
Working together can create stronger town centres and business districts that are better positioned to take advantage of economic opportunities and are resilient to economic shocks.
Town centres are about people and people's needs, they are places with a history and a community story. They provide convenience, choice, value, comfort, leisure, entertainment and a sense of place. Centres are about place-making, and place-making is about communities having ownership, a sense of belonging and pride.
This policy provides direction on how to establish a BID programme and the Council's expectations of how a BID programme should function.
The Council can assist with the establishment of a BID programme and support the implementation of the programme to leverage the contribution local communities make to the economic wellbeing of the district as a whole.
The BID programme also provides a mechanism to advocate to the Council for appropriate infrastructure, facilities and services to support business activity and to have a business perspective inform Council policies and initiatives.
1.2 The Business Improvement District programme - a collaborative approach
A BID programme is a public/private partnership. It can develop projects that attract assistance and may be in partnership with Central Government and/or the Christchurch City Council or other agencies and organisations.
A key feature of the BID programme is the ability to secure sustainable funding through non-residential properties within a defined BID programme area paying a targeted rate. The rate is collected by the Council, and passed on to the organisation running the BID programme to fund its work programme.
A BID programme should, however, be more than a purely financial relationship between the parties – it should provide opportunities to develop collaborative approaches to achieve development goals.
Establishing a BID programme takes time (often a one to two year period) and requires considerable effort and resources. A successful BID programme is characterised by the willingness of members to get involved in the development of their area. They will have a thorough understanding of their local business area and believe in the philosophy of self-help.
While it is expected a BID programme will be operated by a business association the Council will consider alternative organisations to be the BID programme operator. An example is where a new entity may be established with representatives from the business association and other local key business interests.
2. Purpose and value of BID programmes
A BID programme creates a partnership enabling Christchurch City Council, the relevant community board and a BID programme operator to develop, formalise, and enhance relationships between local businesses and the Council.
This relationship is a key element for successful local economic development and enhancing business prosperity.
The value of a BID programme can accrue to the partners involved in different ways:
- Increases business prosperity for members, through the provision of services, support, advocacy and initiatives that enhance the local business environment.
- Provides the BID operator with regular and sustainable funding. This enables delivery of initiatives identified in its strategic and business plans and provides value to members over a longer period than is usually possible when operating on a voluntary basis.
- Is aimed at growing business returns – leading to increased business turnover, increased profit, increased property values, ability to reinvest to further grow business.
- Community boards and local businesses have a common interest in a particular place and share similar goals. Working collaboratively is likely to promote better local outcomes for businesses and for the local community.
- Enables a community board to engage with the local business sector in a coordinated way. It encourages local business investment, promotion and local economic development.
- Enables the Council to engage with local business sector in a coordinated way. It encourages business investment, promotion and economic development.
- The BID programme promotes outcomes the Council is seeking in strategies and plans outlined below.
3. Links with key strategies and plans
A BID programme is intended to support and be consistent with the aims of the wider framework of Christchurch City Council strategies and plans and with plans prepared by the Canterbury Earthquake Recovery Authority (CERA) and its successors.
BID - Business Improvement District.
BID programme - is a formal and structured agreement between a business association and the Council to provide economic development initiatives within a particular area.
BID manager - is a person contracted or employed by the business association to manage the BID programme.
BID proponent group - means those persons proposing a BID programme for an area and that work together in the early stages to steer the proposal through to a decision on whether to proceed.
BID operator – means a formally constituted organisation that is operating a BID programme.
Business association – means a formally constituted organisation of business interests within a community. Is likely to be the organisation operating a BID programme.
Council - Christchurch City Council.
Executive committee - means the body elected by the members of the BID operator to govern the operations of the BID programme.
Governing board - has the same definition as executive committee above.
This policy provides guidance for prospective and established BID programmes, and explains the requirements and responsibilities of the Christchurch City Council BID programme.
This policy is "enabling" rather than "requiring". Any initiation of a BID programme will come from a business community rather than the Council.
This policy is intended to provide clear guidance but also to be flexible enough to enable innovative solutions to local requirements to be explored and implemented.
The policy addresses:
- Roles and responsibilities of relevant parties.
- Objectives that a BID programme must meet.
- Processes required to establish a BID programme.
- General operation requirements of a BID programme.
- Monitoring and reporting of performance of a BID programme.
This Policy will be reviewed at least every five years to ensure it continues to meet the needs of the business community and the Council.
6. Roles and responsibilities
6.1 Christchurch City Council
The Council will:
- provide information and advice to a BID proponent group or BID operator as appropriate
- decide whether to set a targeted rate to fund a BID programme
- if it has agreed to set a targeted rate for a BID programme, set the rate on annual basis providing the BID operator has complied with the terms of this policy, and provide the funding generated to the BID operator
- ensure monitoring and reporting requirements are complied with by the BID operator
The Strategy and Transformation group of Christchurch City Council, working with relevant community boards, will lead the provision of advice and support for BID programmes.
6.2 Community Board
Christchurch City Council community boards are likely to have a close and productive relationship with an organisation operating a BID programme in their area.
Community boards will:
- Provide information and advice to a BID proponent group or operator as appropriate.
- Advocate to the Council and CCOs on behalf any BID proponent group or operator in their area, where appropriate.
- Provide a link between the Council, a BID proponent group or operator in their area and the local community.
- Recommend to the Council that a BID proponent group be supported in progressing to a BID programme if the community board believes this to be appropriate.
- Recommend to the Council that a new BID programme is established and a targeted rate be introduced following a successful ballot return and the community board being satisfied the BID programme has appropriate support in the community and is considered capable of operating a BID programme successfully.
- Recommend to the Council whether monitoring and reporting requirements are complied with by the business association or other organisation operating the BID programme.
6.3 BID proponent group or operator
The BID proponent group or operator will:
- Be a legally constituted incorporated society that is operating a BID programme.
- 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 any grant money is used, and make these records available to the Council on request.
- Implement the agreed programme for its BID area.
- Provide all required planning and accountability documentation to the Council by the required date, in the required format and to the required standard.
7. BID programme scope
The BID programme allows for a range of activities to be undertaken with the provisos that:
- The activities are relevant and beneficial for BID programme members, and
- The activities are not already provided as part of the Council's normal service provision and funded from the general rate.
BID operators must prepare a Strategic Plan (three to five year) and Annual Business Plan that detail the priorities, work programme and projected budget. A BID operator can choose to focus their initiatives in any direction that best supports the aims and objectives of the BID programme members.
Activities that a BID programme operator may choose to undertake within their local area could include, but are not limited to:
- Advocating to local and central government and agencies.
- Promoting their area to prospective new businesses.
- Collective marketing and promotion.
- Enhancing the street environment (for example, providing additional cleaning services, beautification projects, promoting safety and security).
- Business development, mentoring, networking and training.
- Sustainability and resilience planning.
- Enhancing the urban form (for example, heritage projects or improving the accessibility of businesses).
- Collective purchasing agreements.
- Running or hosting events.
- Providing services to members or wider - cutting costs for members and/ or generating revenue.
The Council will provide details of the capital projects and levels of service it has committed to deliver through its existing work programme and funded from rates.
There may be opportunities for the business association and the Council to negotiate changes to the existing service delivery approach. This could include:
- the Council providing a lower level of service with a reduction in rate requirement
- the Council ceasing to provide a service with a reduction in rate requirement
- the business association delivering a service instead of the Council with either a reduction in rate requirement or the Council contracting the business association to provide the service.
There may be opportunities for the Council to advise the business association or other organisation of enhancements to planned capital projects or increased levels of service that are prioritised by the community but not budgeted in the Council’s existing work programme that the business association or other organisation may wish to consider as a BID project.
While the Council will always negotiate in good faith, any change to the levels of service or service delivery approach will be at the Council’s discretion as it must always consider the interests of the wider community and maintain its ability to deliver cost-effective services.
7.1 Consultation with affected parties
Where a project proposed by a BID programme operator impacts the public realm, the BID operator will conduct consultation with the affected community on the proposed project. Following consultation, the relevant Community Board will consider whether to approve the proposed project.
8. BID programme success factors
The Christchurch City Council and its council controlled organisations (CCOs) will help support BID programmes to successfully meet their goals and objectives.
The Council sets the policy framework for the programme but it is the responsibility of the BID operator to ensure their BID programme is a success.
BID programme success is dependent on three key factors.
8.1 Effective governance
Providing vision, strategy and decision making is critical and the responsibility of the BID programme executive committee. The committee is responsible for setting the strategic direction of the BID programme, accountability and for ensuring that the management of the BID programme is effective and setting key performance indicators which are realistic and measurable.
8.2 Good management
This is usually carried out by a BID manager, business management consultancy or other agency. The BID manager is responsible for developing strategic relationships, advocacy, and ensuring delivery of the goals identified in the BID strategic and annual plans. They are also responsible for the accountability and reporting requirements for the BID programme activities.
8.3 Sufficient resources
The BID programme must have adequate resources to enable its vision and strategies to be implemented, achieve the BID programme goals and make a real difference to the local business environment.
9. Formal agreements
9.1 Memorandum of Understanding - Council and BID proponent group relationship
A Memorandum of Understanding (MOU) between the Council and the BID proponent group defines the relationship between the parties as they work towards the establishment of a BID programme. The MOU is a precursor to an eventual partnering agreement and when the BID is established may remain in parallel with the Partnering Agreement. The MOU may have an agreed timeframe and can be varied by agreement between the parties.
9.2 Partnering Agreement
A Partnering Agreement between the Council and the BID operator is required. It formalises the agreement to work together within the Christchurch City Council BID policy framework and details the fixed aspects of the relationship.
The Partnering Agreement has a defined lifespan and is signed by both the Council and BID operator.
10.1 Targeted rate
The Local Government (Rating) Act 2002 gives the Council the authority to set a targeted rate for a defined area and activities (Sections 16, 17 and Schedule 2). Schedule 3 of the Act allows for targeted rates to be set and assessed on a number of different bases.
The targeted rate funding mechanism enables the Council to set a rate on non-residential properties within a BID Programme area. The Council will then pass the funds collected to the organisation managing the BID programme to fund its activities.
Certain property types are exempt from paying a targeted rate to fund a BID Programme. These include:
a) Residential properties.
b) Some properties owned by central government (either wholly or proportionally). This includes educational facilities and district health board land.
c) Council owned properties, other than those properties or parts of properties operating as a commercial business.
d) Other properties as provided for under the Council's Rate Remission Policy to have a partial or full remission of the targeted rate.
e) Utilities - other than any commercial business component of a utility property.
10.2 Purposes for which the targeted rate funding can be used
Targeted rates collected by the Council are passed on to the BID operator to fund its operation. This funding can be applied to provide activities identified in the BID strategic and/ or annual plan, and that are outside those provided by the Council or that are over and above levels of service already provided by the Council and funded from rates.
10.3 Setting a targeted rate
There are three options for how a targeted rate can be set and assessed.
Capital value rate - the total amount of targeted rate funding to be collected is divided by the capital value of the properties within the collection area and apportioned based on the relative capital value of each property. Properties with a higher capital value pay a proportionately higher targeted rate.
This method is appropriate if owners or tenants of more valuable properties will benefit more than those with less valuable properties or where a "progressive" tax approach is considered appropriate based on significant community benefit.
Fixed rate - a uniform fixed rate is charged to every property required to pay the rate within the area - every property pays the same amount.
This method is appropriate when the benefit received by each rateable property within the collection area is the same.
Combination of a capital value rate and a fixed rate - a combination of a fixed rate charge for every property within the collection area, plus a proportional rate based on capital value.
This method is appropriate where there are a large number of small businesses balanced by a smaller number of large businesses operating within the collection area. This approach flattens out the differences in rate requirement between higher and lower value properties while still reflecting the relativity in benefit received based on the value of property.
The Council will work with a BID proponent group to identify the most appropriate targeted rate approach for the particular BID programme. While a consensus approach will be sought, the final decision-making on all matters relating to the targeted rate must rest with the Council as the rating authority.
10.4 Minimum targeted rate revenue
This policy is intended to apply district-wide and therefore needs to be flexible enough to accommodate the aspirations of all business districts to enter into a BID Programme.
To encourage the participation of business districts, regardless of size, this policy does not include a minimum rate revenue requirement. The Council will consider all proposals to establish a BID on the basis of the benefits to be delivered to business and property owners who will pay the targeted rate being sufficient for them to agree to a BID programme being established and a ballot being held that delivers the required mandate.
10.5 Limit to BID targeted rate increase
Once a BID is established, the maximum increase or decrease in the total targeted rate requirement compared to the previous year is generally 10 per cent of the existing targeted rate amount.
The Council may agree to a change outside these parameters and in so doing may also require a ballot as part of the decision-making process.
10.6 Additional revenue
BID programme operators are encouraged to generate additional income to supplement targeted rate funding. Examples of additional revenue streams include grants, sponsorships, business ventures and providing services to paying customers.
11. Balloting of affected parties
Before agreeing to impose a BID programme targeted rate the Council requires evidence of an appropriate level of support for the BID programme and the targeted rate from those affected. This is sought through a formal ballot for key BID programme decisions, outside the Local Electoral Act 2001.
11.1 Types of polls
A ballot must be held in the following circumstances.
1. Establishing a BID
Affected property owners and businesses are balloted when a BID programme is proposed to be established to ensure there is appropriate support for the proposal and in particular for the levying of a targeted rate. This is known as the Establishment Ballot.
2. Change to the BID boundary
When a BID area is proposed to be expanded, the BID operator can apply to the Council for a list of property owners in the additional area, and arrange for a ballot to be conducted in the expansion area only.
In the event of a BID area being reduced, a ballot is conducted over the whole BID area because this change will result in a reduction in targeted rate revenue and/ or an increase in targeted rate per remaining property.
When BID areas are proposing to amalgamate a poll is conducted over the whole proposed BID area.
3. Dissolving a BID
This may be called by the BID programme operator or its members according