Establishing A BIA

Process For Starting a BIA

Starting a BIA requires a group of like-minded property owners and businesses coming together with the common goal of improving a particular commercial area. It can be a lengthy process and requires significant outreach to the area businesses and property owners to garner their support and feedback. Below is a simplified step by step process:

Step 1:        Establish the need and Steering Committee
Step 2:        Indentify initial BIA boundary
Step 3:        Obtain support from area businesses and owners
Step 4:        Form a non-profit society (BC Corporate Registry)
Step 5:        Contact your municipality to inform them of your intentions
Step 6:        Canvas area to gather input on priorities & adjust bia boundaries as needed
Step 7:        Develop preliminary budget
Step 8:        Communicate BIA proposal to business tenants & owners
Step 9:        Submit official BIA proposal to municipality
Step 10:      Official municipal notification process

Governance

Board of Directors Overview

BIA boards of directors are comprised of the BIA’s members (property and business owners) who operate in a volunteer capacity to oversee the organization. The board is accountable to the BIA membership. However, there is flexibility in the composition of the board as some BIAs have councilors, economic development officers and residents also on the board as non-voting members. The number of directors on the board, term of office and details such as ratio of property owners to business owners are determined by the bylaws of the BIA. Each year, a BIA is required to inform the membership of the number of seats up for election in advance of the annual general meeting (AGM).

The board is responsible for the governance of the organization including strategic planning, budgeting, evaluation of the executive director, establishing and reviewing policies, establishing and reviewing committees, and evaluation of programming.

Financial Reporting

BIAs are not required to have an audit unless stated in their bylaws or mandated by municipal by-laws /policies. In situations whereby an audit is not required, BIAs typically undergo a review engagement.

In either case, independently reviewed statements are typically provided to council as part of the reporting mechanism to the municipality.

Reporting to members at the AGM

Each calendar year, BIAs must report to members at an Annual General Meeting (AGM). Financial statements, auditor’s report, election of directors, operating budgets and other matters are presented to the membership for discussion and approval in compliance with the Societies Act, bylaws and other regulations. Quorum and proxy rights are established through a BIA’s bylaws.

Notice of the date, time and location of the AGM must be sent to every member of the BIA. Typically, the agenda and the proposed operating budget are also included in the notice. 

A BIA must file an annual report with the Provincial Registrar within thirty days after an AGM is held.

Establishing a budget and the levy

The board of directors is responsible for preparing an annual operating budget. The budget is submitted to the municipality each year, after approval by members at the AGM, for consideration by council and upon approval, provides the BIA with funding through a levy on class 5 and 6 properties in the BIA’s catchment.

The levy mechanism is the result of a municipal bylaw, which expires after a certain period of time, typically five to seven years. As each bylaw nears expiration, the BIA must develop a new budget and mandate for the next bylaw, a process called renewal. As part of renewal, the BIA must submit a levy cap, which is referenced in the by-law. The aggregate of annual budgets cannot exceed the cap within the renewal period. In many municipalities, the proposed annual levy totals are also written into the by-law.

The amount a property will pay into the BIA budget depends on its relative property value. For example, if a property is worth 1% of the aggregate property value in a BIA area, then the property will contribute 1% of the annual budget. Property owners typically pass on the levy expense to the tenant as part of the lease.

The budget is a mechanism to achieve the BIA’s mandate. The first step should be to develop a strategic plan and determine the priorities for the current year. These priorities would then be factored into the budget planning process. Depending on the complexity and experience running a program, it is important to ensure contingency is included, and additional costs for programs such as permits and insurance are factored in.

For new BIAs, projects such as public realm improvements (e.g. banners, flower baskets) and street cleaning services provide immediate and tangible impacts. Long term budgeting over the renewal period will allow for planning and resourcing of larger projects in subsequent years and sound funding cap management.

Another consideration is the response of members to levy increases. Engaging members through financial transparency and showing where the investment is being allocated and how it supports the mandate is critical to building support. Metrics such as levy amount per $1,000 of property value (BIA mil rate) are useful to illustrate that the BIA has benchmarks for evaluation.  Demonstrating value of programming is important to indicate to members the return on their levy contributions. For example, marketing programs often use engagement touch points (visitors, impressions) to measure their value. A security program may collect data on number of referrals to visitors or shoppers or patrol hours.

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