Executive Committee Meeting Friday, February 10th, 2017

MA Conference Room – 919 20th Street, Sacramento, CA 95811 – 12:00pm – 1:30pm

AGENDA I. Public Comment: Public Comment is limited to 3 minutes on items not on the agenda.

II. Board Development (12:10 pm) Thomas a) Discussion: Board Updatesb) Discussion: Discuss request from State of California Department of General

Services to provide permanent seat on board and impact on State of CaliforniaState Parks, City of Sacramento and County of Sacramento.

III. Budget / Reports (12:30pm)a) Action: Approve January Financial Report Baime Michaels b) Action: Adopt MDP for Central Midtown Restaurant BID and authorize Executive

Director to pay $7,500 in formation fees to City of Sacramento Baime Michaels

c) Discussion: Remove Board Designated Temporarily Baime MichaelsRestricted Net Assets of $35k per direction from the City of Sacramentoregarding use of BID funds to address business owner tax liability.

d) Discussion: Final balance for past PBID District

IV. Policy (12:35 pm)a) Discussion: Policy Updates

I. 28/J Lot Baime Michaels

V. Strategic Plan (12:40 pm) Turton a) Discussion: Office Relocation Update

I. Build Out Updates

VI. Action: Consent Calendar (12:45pm) Thomas a) Action: Approve January 2017 Executive Committee Minutesb) Action: Approve updated Financial Procedures

VII. Closed Session: (12:45pm)a) Contract Negotiations, Handle Business Improvement District Baime Michaels

Adjournment - Next Meeting: Friday, March 10th, 2017 - 12:00pm – 1:30pm

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Item II. Board Development:

A) DISCUSSION: General Board Updates.

B) DISCUSSION: This item is continued from November and was scheduled to be resolved by theJanuary EC, however DGS has not pursued the issue further. No action needed at this time.

Discuss request from State of California Department of General Services to provide permanentseat on board and impact on State of California State Parks, City of Sacramento and County ofSacramento.

a. DGS has requested that their seat be made permanent. Their seat was permanent inprior years, during the remerge of the MBA and PBID, the update to the bylaws neglectedto carry over this change.

b. If DGS receives this seat, the same opportunity should be offered to the City ofSacramento (already a top five owner), County of Sacramento, and California State Parks.

c. The impact of this decision is as follows. The board is comprised of up to 26 members.i. Members 1-5: Top Five Ownersii. Members 6-8: DGS, State Parks, Countyiii. Members 9-26: Available for electioniv. While DGS is in the top ten payee list, they are not payer number 6, they are

number 8. Payers 6 and 7 need to be considered (Friedman and Pappas).d. At the October EC, the Executive Director was directed to research their seat structure on

the DSP Board.i. DSP determines Board Membership based on various representation categories,

not based on amount of holdings.ii. DGS is not within DSP’s top owners list but do have a permanent seat.

e. At the November EC, the Executive Director was directed to discuss this with DGS, to beresolved by January.

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Item III. Budget / Reports:

A) ACTION: Approve January Financial Report: This report covers the statement of activities, budgetversus actual for 2017. This includes the PBID Corporation dba MBA, CMRBID and SBIA. Thebudget projects income/expenditures at 8%; actual income is 6% and actual expense is 6%.

YTD, Budget vs Actual January 2017 – 8% of budget

Income YTD Actual 2017 Budget Membership $ 975.00 $ 6,000.00 16% Admin Fees $ 3,177.00 $ 84,387.00 4% Events $ 8,000.00 $ 80,000.00 10% Contracts $ 90,501.00 $ 1,642,836.00 6% Grants/Interest $ 23.00 $ 2,500.00 0% Misc $ 0.00 $ -

Total Income $ 102,676.00 $ 1,815,723.00 6% Expense

BID Programs* - - PBID Programs

Cat 1: Main, Safety & Street Midtown - -

Alhambra - - Cat 1: Main, Safety & Street $ 47,705.00 $ 685,053.00 7% Cat 2: Placemaking & Cap Imp

Midtown - - Alhambra - -

Cat 2: Placemaking & Cap Imp $ 7,015.00 $ 157,776.00 4% Cat 3: Advocacy, Comm & Admin* $ 45,225.00 $ 750,284.00 6%

Total Expense $ 99,945.00 $ 1,593,114.00 6% Net Income $ 2,730.00 $ 215,910.00 Detail: Admin fees appear behind budget due income from the Central Midtown Restaurant District not expected to be earned until collections begin in July. Contract income is behind schedule due to PBID spending normally being at a lower rate in the first quarter of the year. Cat 1: Maintenance Safety and Streetscape Expenses are on track. Cat 2: Placemaking & Capital Improvements expenditures will increase seasonally. Cat 3: Advocacy, Communications & Administration are on track. * Note that 172k of the expenses that currently display in PBID Cat 3 are related to BID programs (Sutter and Central Districts). In future months, these expenses will be presented in the BID Programs section. – Note that in future months, expenses will be broken down into the Midtown and Alhambra zones.

Audit: The 2015 Audit on-site work has been completed and we received an excellent review. The 2016 Audit is scheduled for presentation at the July Board Meeting.

Statement of Financial Position: The organization has 493k in cash/cash equivalents (358k PBID and 135k SBIA). Accounts payable are at 38k. Accounts receivable are at 28k. Operating costs will average 115k per month in 2017. Cash is in place for 4 months of operations (Feb 17-May 17). We will receive our next disbursement in late February. No fixed assets were purchased.

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B) ACTION: Adopt Management District Plan (MDP) for the Central Midtown Restaurant BID(CMRBID) and authorize the Executive Director to allocate $7,500 for formation fees by the Cityof Sacramento to finalize the MDP and begin the formal hearing process.

Map & Outreach Timeline

Restaurants and Support: To succeed, the District must earn 51% support weighted by sales. Current support is at 80% weighted by sales and 65% by number of businesses. If Old Spaghetti Factory

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determines they are unsupportive, the district boundaries will be adjusted at the support is estimated to increase to 85-90% by sales and 70% by number of businesses. The same will be true if they determine they are supportive.

Restaurant Address Contact Person Occupancy ABC Type Support

Old Spaghetti Factory 1910 J George Dariotis 407 47 TBD

Chicago Fire 2416 J Sam Schnetz 277 47 TBD

Low Brau 1050 20th Michael Hargis 260 47, 58 Support

Golden Bear 2326 K Kimio Bazett 135 47,58,77 Support

Garden to Grill 2315 K Thomas Roth 126 47 No longer in Business

Pete’s Rest & Brew 2001 J Steve Presson 109 47 TBD

Tank House 1925 J Melissa Williams 104 47 Support

Rick's Dessert Diner 2401 J Ahmed Eita 96 41 TBD

Biergarten 2332 K Sean Derfield 91 41 Support

Tres Hermanas 2416 K Sonia Saenz 90 47, 58 Support

Tapa the World 2115 J Conni Levis 85 47

TBD

Kasbah Lounge 2115 J Tanya 83 47 Support

Pizzaria Urbano 1050 20th Carlos 80 41 Support

Thai Basil 2431 J Sig 76 47 Support

Jungle Bird 2516 J Melissa Williams 65 47 Support

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Skool 2319 K Andy Mirabell, Olia 59 41 Support

Azul 1050 20th Carlos Ulloa 59 47, 58, 77 Support

Cantina Alley 2320 Jazz Alley

Art Aguilar, Max Archuleta 75 Support

Mangos 1930 K Joe Gomez 47 Support

Sakamoto 2131 J Michelle TBD

Cornerstone 2326 J Danny A-2 47, 58 TBD

Management District Plan Overview

• 5 year Business Improvement District under the PBID ‘94 Law.• Collections beginning July 1, 2017.• 20 restaurants within the boundaries of the BID.• Boundaries are 19th Street to 26th Street and Improv Alley to Kayak Alley.• Generate an estimated $300,000 per year and $1,500,000 over the 5 year span of the district• The budget is broken down into four service areas:

o Lighting & Safety (30%) – Services and programs in the Lighting & Safety area couldinclude police services for Second Saturdays and on street events adjacent to assessedbusinesses, security patrols, and ambient lighting on trees and ornamental poles,including holiday lighting

o Placemaking, Arts, & Events (50%) – Services and programs in the Placemaking, Arts, andEvents section could include on arts and annual signature events such as a pig roast,Second Saturdays, THIS is Midtown Concert Series, Oktoberfest, park valet programs andmore. Additionally this category will help cover special event costs for insurance, streetclosures, entertainment, and advertising.

o Advocacy & Administration (15%) – Services in the Advocacy & Administration programinclude administrative costs to run the other program areas, as well as advocacy forpolicies and regulations directly impacting businesses within the boundaries of thedistrict

o Collections, Contingency & Reserve (5%)

Requested Action: Adopt Management District Plan (MDP) for the Central Midtown Restaurant BID (CMRBID) and authorize the Executive Director to allocate $7,500 for formation fees by the City of Sacramento to finalize the MDP and begin the formal hearing process.

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C) DISCUSSION: Remove Board Designated Temporarily Restricted Net Assets of $35k per directionfrom the City of Sacramento regarding use of BID funds to address business owner tax liability.

a. At the November EC, the group took action to create a TRNA account to reserve funds forany potential liability for the SBIA restaurants regarding the BOE’s determination on howto collect BID funds. The HBID has taken similar steps.

b. Following this action, the City of Sacramento issued a memo indicating that these fundsshould not be used in this manner as this is not a use outlined in the SBIA MDP.

c. Per further conversation with CM Hansen’s office, the City Attorney is looking into thisissue further.

D) DISCUSSION: Discuss final balance for past PBID District.a. The remaining balance on the deferred income for 2016 is approximately 7k after

accruing depreciation at year-end. The final year-end financials will be available beforethe end of the first quarter.

b. Per Civitas, the Management Plan, and PBID law, these funds must only be used withinthe District in which they were generated. Initial recommendations are to use these forenhanced street lighting within the boundaries of the “old” District so the funds are spenton something very specific and measurable that is outside the scope of what could beoffered without the funds.

c. The EC could apply these funds to the streetlight request near the Fort Sutter hotel andretain the 2017 lighting funds for additional projects.

Item IV. Policy

A) DISCUSSION: Update on 28/J.

Item V. Strategic Plan

A) DISCUSSION: Strategic Plano Office Relocation Update

Item VI. Consent Calendar

A) ACTION: Approve January 2017 Executive Committee MinutesB) ACTION: Approve updated Financial Procedures

Item VII. Closed Session: (12:45pm)

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Executive Committee Meeting Minutes Friday, January 13th, 2017

MA Conference Room – 919 20th Street, Sacramento, CA 95811

In attendance: Thomas, Watson, Hodgson, Saunders, Baime Michaels, Hassett, Sales, Rasmussen, Brooks, Mikacich, Hoskins, Gugino, Parker, Adair, Sawyer

Absent: Turton, Bazett, Testa, Paragary

Meeting called to order: 12:13 PM Quorum established: 12:13 PM

AGENDA I. Public Comment: N/A

II. Board Developmenta) Discussion: Board Updates

• Welcome new Board Members• District Dashboard – How we measure success

b) Discussion: Discuss request from State of California Department of GeneralServices to provide permanent seat on board and impact on State of CaliforniaState Parks, City of Sacramento and County of Sacramento. Continued atFebruary Executive Committee Meeting.

III. Budget / Reportsa) ACTION TAKEN: Approve December Financial Report

Moved by Hassett/ Seconded by Hodgson/ Unanimous Vote – Motion Carriesb) Discussion: Remove Board Designated Temporarily

Restricted Net Assets of $35k per direction from the City of Sacramentoregarding use of BID funds to address business owner tax liability. Continue toFebruary Meeting.

c) Discussion: Final balance for past PBID District – Discuss how funds will beexhausted Midyear – Continue to February Meeting

d) Discussion: Service to residential EXEMPT Parcels

IV. Policya) Discussion: Policy Updates

• Streetcar

V. Strategic Plana) Discussion: Office Relocation Update

• Build Out Updates – Continue to February Meeting

VI. Action: Consent Calendara) ACTION TAKEN: Approve December 2016 Executive Committee Minutes.

Moved by Watson/ Seconded by Hassett/ Unanimous Vote – Motion Carries

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VII. Closed Session: Began 1:08 PMa) ACTION TAKEN: Conference with Legal Counsel, Anticipated Litigation

Moved by Watson/ Seconded by Hassett/ Unanimous Vote – Motion Carriesb) Contract Negotiations, Handle Business Improvement District – Continue to

February Meeting

Adjournment – 1:22 PM

Respectfully submitted, Darling Sawyer

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MA FINANCIAL PROCEDURES Overview The Midtown PBID Corporation dba Midtown Business Association (MA) and dba Midtown Business Association (MA) is a not-for profit 501c(6) organization, which operates on a Calendar Year budget and utilizes accrual-based accounting in line with Generally Accepted Accounting Principles (GAAP). MA’s monthly financial statements are prepared by an External Bookkeeping Firm. MA’s annual tax and audit documents are prepared by an External CPA.

Revenue: Revenue is generated through the PBID assessments, BID assessments, membership dues, fee for service, and earned revenue generated at events and cooperative programming.

Expense: The expense budget is broken into two categories: operating expenses and programming expenses. Programming expenses should follow requirements outlined in by-laws, contracts and PBID Management Plan.

Roles and Responsibilities The City of Sacramento is responsible for providing revenue projections for assessment districts in the early Fall each year. PBID funds are disbursed in February and April with delinquencies paid in September.

The Board is responsible for approving the annual budget and work plan in the fourth quarter of each year. The Executive Committee is responsible for regular review of financials, ensuring the completion of an annual audit, and oversight of the Executive Director. The officers of the board have specific roles; the President is responsible for signature on the annual audit contract, the President and Treasurer are responsible for providing a first signature on all outgoing checks, the Treasurer is responsible for reviewing the Executive Director’s expenses, and are listed on the company bank accounts, and the CFO is responsible for compliance with the PBID Management Plan.

The Executive Director is responsible for the creation of the annual budget and work plan, for approval of all transactions, for the second signature on all outgoing checks, for the first signature on all contracts with the exception of the annual audit, and compliance with contracts and PBID Management Plan.

The Bookkeeper is responsible for processing all transactions in QuickBooks including invoice creation and distribution, inputting payroll, reviewing cash flow and generating monthly reports for the Executive Director including: – Statement of Activities, YTD Budget vs Actual– Statement of Financial Position / PTO Accrual Report– Statement of Activities by Class (PBID Compliance Report)– Monthly Transaction Detail

- Transfer requests

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- Program transactions as requested

- – Accounts Receivable / Accounts Payable– Time by Program Summary (PBID Compliance Report)– Quarterly Cash Flow Report

- Membership Report

The Staff is responsible for completing timesheets with supervisor approval to allocate their time to programs, ensuring signed agreements are on file, fulfilling contract obligations, managing their program budgets to perform on or ahead of budget, coding all transactions within that budget for the bookkeeper, and reviewing monthly reports to confirm accuracy.

MA Procedures for Day-to-Day Operations - How we spend money

1. The authority to sign, fulfill, pay for and if needed terminate a contract isgiven to the Executive Director by the Executive Committee for amounts $5,000 andover. The authority to spend funds that do not require a contract within the spirit ofachieving the work plan, or funds that do require a contract for $4,499 or less isgiven the Executive Director by the Board with the approval of the annual budget.2. Contracts for the MA to deliver services or receive services from anindependent contractor will use the board approved contract template.3. Any PBID funds used for specific projects which require an independentcontractor or consultant over $5,000 will be put out to bid. Whenever possible,three bids will be required and the bidding period will be a minimum of 10 workingdays. Bids are issued using the RFP template.4. The Executive Director will grant spending authority to staff at the followinglevels without the need to seek written approval from the Executive Director.Directors may spend up to $2,499. Managers may spend up to $1,000, Coordinatorsmay spend up to $300. These expenditures may only be on a transaction to fulfilltheir approved work plan and budget and require the Executive Director’s approvalof contracts or agreements prior to spending. Receipts are required for eachtransaction to ensure a clean audit.5. Capital purchases over $1,500 will be depreciated.

Cash is utilized on rare occasion for purchases. Up to $200 of petty cash may be kept on hand in the office for regular use. Staff must submit a petty cash request form to the Petty Cash Manager. The expense is then logged by the Petty Cash Manager. Post purchase, the employee must submit any change with the original receipt. Documentation for the Petty Cash account is provided by Petty Cash Manager to Bookkeeper for monthly reconciliation.

Credit Cards are distributed only to select employees who are not involved in the daily management of Petty Cash, opening the mail and/or check deposit. Staff must

Formatted: Font:

Formatted: List Paragraph, Bulleted + Level:1 + Aligned at: 0.25" + Indent at: 0.5"

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submit coded receipts with their monthly credit card statement to the Administrative Coordinator who enters them into QuickBooks for review by the Bookkeeper.

The Executive Director’s credit card statement must be reviewed and signed by the Treasurer. Additional review procedures may be employed based on purchase. For example, gas purchase will be accompanied by mileage log.

Checks are run on a bi-weekly basis by the Bookkeeper. As invoices are received, they are entered into QuickBooks by the Administrative Coordinator and then distributed to staff for approval and coding in their folders. After coding, the Administrative Coordinator enters the coding into QuickBooks and ensures they are signed by the Executive Director. Upon approval, the Bookkeeper prints the checks for signature by first the President or Treasurer, then the Executive Director. Copies of all checks are filed by the Bookkeeper.

Reimbursements for out of pocket expenses incurred by employees doing business on behalf of MA are eligible on the next reasonable check run. This includes items such as parking, mileage and program purchases. Mileage is paid at the current rate determined by the IRS. Employees must submit receipts along with the standardized reimbursement log. Date, function and mileage should be notated on the log for processing. All staff reimbursements must be approved by the Executive Director. Reimbursements submitted by the Executive Director must be approved by the President or Treasurer.

MA Procedures for Day-to-Day Operations – How we process payroll

Staff shall submit timesheets to their supervisor/Administrative Coordinator the Monday following the pay period. The Administrative Coordinator shall confirm the hour allocation, transfer the hour allocation to the coversheet, and request signatures from the applicable supervisors to approve. The Executive Director will sign the coversheet and then the Administrative Coordinator will email this to PayChex. PayChex shall send the Executive Director the payroll to approve and process.

MA Procedures for Day-to-Day Operations - How we take in money

Cash payments made to the MA are received by the Petty Cash Manager. The Petty Cash Manager is responsible for processing the payment and providing proper documentation to the Bookkeeper.

Credit Card payments are processed online via Brown Paper Tickets or in person via Square by the Petty Cash Manager or Staff. The Bookkeeper reconciles receipts and posts payments accordingly.

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Checks are the most common form of payment and received by the Petty Cash Manager. Upon receipt, the receiver stamps the back of the check with ‘for deposit only…MA account information’ and photocopies it. The checks are then deposited weekly by the Petty Cash Manager.

Invoices are generated to request payment for all transactions with the exception of transactions that occur via Brown Paper Tickets and Square. They are requested by staff, then generated by the Bookkeeper and emailed to the client for payment. Invoices over 30 days are then mailed to the client.

MA Procedures for Day-to-Day Operations - Bank Accounts

Online Access: The Executive Director shall act as online administrator for MA bank accounts. In this role the Executive Director may transfer funds between checking and savings, and will designate viewing privileges to the Bookkeeper, the President, and the Treasurer for monitoring purposes. The President and the Treasurer shall be noted on the account as authorized signers in addition to the Executive Director. Online access to individual credit cards is allowed for each employee who is the credit card holder and their supervisor.

Check Authorization: MA currently maintains three bank accounts. The PBID Corp Checking Account (Wells Fargo): This account processes all of this organization’s accounts payables and receivables. The PBID Corp Savings Account (Wells Fargo) for reserve funds. The SBIA Checking Account (Wells Fargo) to hold all income and expense funds for SBIA. Check signers include the Board President, Treasurer, and Executive Director.

Line of Credit: MA shall maintain a line of credit with Wells Fargo equal to no less than two payrolls. The opening line will be $40,000 which secures nearly three payrolls or unexpected legal/capital improvement fees. The Executive Director shall be the only authorized user of the line of credit but may not access the line of credit without formal authorization. Authorization comes by motion of the Executive Committee. In the rare case of an emergency in which the line of credit must be accessed prior to the next available Executive Committee, the President and Treasurer may jointly authorize the Executive Director to authorize the line of credit.

Reserve Policy: MA shall maintain a reserve in compliance with the PBID Management Plan of 0-25% of PBID budget year over year, not compounding. The

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purpose of these funds are to prepare for unexpected expenses each year and renewal. Beginning in 2017, MA shall create three reserve accounts.

Account 1: MA shall set aside an amount each year of no more than 20% of the PBID budget that will equal approximately $250,000 by year ten of the PBID term. The purpose of this reserve is to prepare for renewal and unexpected expenses. These funds can only be used per the PBID Management Plan and will be placed into a “Reserve” saving account.

Account 2: MA shall maintain a balance in its “Operating” savings account of approximately three months operations expenses that shall be cycled into operations the first quarter of every year to maintain cash flow against the City’s disbursement schedule.

Account 3: MA shall create a “capital improvement” savings account in which non PBID funds will be placed to invest in capital items for the MA such as a building purchase.

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