Appendix C: Frequently asked questions
Appendix C: Frequently asked questions
Q. Who pays for a BIA?
BIAs are generally funded by a special levy within the boundaries of the BIA. It is paid in most cases by owners of property designated as industrial or commercial, and their tenants.
The amount of the levy is related to the assessment value of the property. For example, if a property is assessed at one per cent of total realty assessment in the BIA, the owner of that property may pay a BIA levy of one per cent of the total BIA levy.
The council can also establish maximum and minimum levies to help provide for the fair sharing of the costs of services. Similarly, council may set special charges for properties that derive greater or less than average benefits, in council’s opinion, from the BIA.
Q. How do you start a BIA?
A BIA is a voluntary creation that may be initiated by local business and property owners. A BIA may be established by municipal bylaw upon a formal request for a BIA designation from local business leaders.
The onus is on the local business leaders to organize and solicit support for the creation of the BIA. Formal requests often include details of the proposed boundaries of the BIA, an action plan, a suggested budget and an indication of the degree of support for the project among business and property owners in the boundaries of the proposed BIA. The clerk of the municipality usually sends notification of the proposed BIA to all business owners within a proposed area. The owners give a copy of the notice to their property tax paying tenants. If the clerk receives significant objections to the proposal, the municipal bylaw would likely not be passed. (See section 2.3 for further information.)
Q. How do you determine the boundaries of a BIA?
There are generally no hard and fast rules with respect to defining a BIA area. However, there are some useful guidelines from past experience. Natural boundaries such as a river or bridge, or historical boundaries formed by older buildings may be considered. Shopping districts are often an easily recognizable starting point.
An important practicality that may be considered is, since they will have to pay the levy within the proposed area, whether the majority of business and property owners are be in favour of the proposal. Business and property owners wishing to be included in the BIA boundaries are usually included.
Q. How do you expand or reduce the boundaries of the BIA?
The boundaries of a BIA can be expanded or reduced by municipal bylaw. The rules (such as notice requirements and appeal procedures) applicable with respect to the initial establishment of a traditional BIA are generally similar to the rules for the expansion or reduction of BIA boundaries.
Q. If a BIA is passed do all businesses in the BIA have to belong?
The establishment of a BIA is voluntary on the part of the municipality, and is usually initiated by the business community, once it has confirmed that a majority of the businesses are in favour. Once the municipal council passes a municipal bylaw creating a traditional BIA, commercial and industrial property owners and tenants that pay a portion of the property tax will generally pay the additional levy associated with the BIA.
Q. What happens if the BIA is no longer wanted?
A municipality may repeal the bylaw that established a BIA. The financial obligations of the BIA may be assumed by the municipality. A municipality may decide to continue the levy on property in the former improvement area until outstanding amounts are received.
Q. Who actually runs the BIA?
A traditional BIA is managed by a board of management appointed by the municipal council. A board has general responsibilities, which usually include, among others, overseeing the planning, budgeting, implementation and evaluation of BIA projects.
Q. How many people are on the board of management?
There is no maximum number of members but most boards have between five and ten members. In Toronto, the practice is that boards of management include one or more members of City Council.
Chapter 19 of the Toronto Municipal Code (Business Improvement Areas) includes a listing of the total number of members of the named Business Improvement Areas, and of how many councillors are members of each.
Q. Who can be on the board of management?
Generally, it is up to the municipality. The municipality often has one or more BIA board members. Remaining nominees are usually selected by a vote of BIA members, and confirmed by the municipality. Board members often include those individuals responsible for establishing the BIA. The City of Toronto practice is to include councillors on all BIA boards of management.
Other members have often included past and present members of business associations, members of service clubs and persons with past experience in municipal affairs.
Q. How long do members sit on the board of management?
Board members usually hold office from the time of their appointment to the expiration of the term of the municipal council that appointed them. Appointments usually continue until successors are appointed.
Q. How do you become a board of management member?
Many BIAs hold elections to nominate a list of potential board members that will be confirmed by municipal council. Some BIAs simply provide suggested candidates for board membership to municipal council. In either case, the final decision on who to appoint as board members rests with the municipal council.
Q. How is the BIA budget determined?
Most boards of management prepare an annual budget for the BIA, then submit the budget to the BIA membership for approval at the annual general meeting. Manyboards of management consider it a practical minimum to discuss the budget with the membership. Budgets go to municipal councils for approval.
Q. How is the BIA budget collected?
The BIA does not levy taxes directly. Traditionally, the municipal council adds a special BIA levy to the property tax collected from commercial and industrial property owners within the boundaries of the BIA.
Q. What opportunities are there for regional BIA structures?
BIAs have traditionally been created by lower tier municipalities by bylaw. However, an upper-tier regional government could explore its options to create a regional BIA-like structure. A lower or single tier municipality with a number of BIAs could consider putting in place a structure that allows for pooling of resources within communities under one BIA-like umbrella.
Q. Can non-members of a BIA be appointed to the board of management?
Traditionally, BIA boards of management have included representatives of Council who are not generally members of the BIA. A municipality may consider putting in place rules concerning board membership and possible options such as a requirement for board members to be members of the BIA.
Q. How can the BIA determine what the municipal service standard is?
BIAs are encouraged to have an on-going dialogue with their municipalities on the standard level of service that a municipality will provide. BIAs and municipalities can consider options such as a written standard service level agreement that outlines what the municipality and the BIA are responsible for providing.
Q. How can an individual business voice a concern about how the BIA budget is structured?
Most BIA boards of management discuss the budget with the BIA membership. In many BIAs, this is undertaken during an annual general meeting. BIA members discuss matters of concern about the budget at this time. Additionally, BIA budgets are generally approved by Council. Individuals with concerns may wish to raise those concerns with Council prior to the approval of the budget.
Q. What approaches can a BIA take to ensure that professional offices are getting the same level of benefits as retail businesses?
Professional offices may not be receiving the same level of benefits as other BIA businesses for activities geared toward improving retail sales. However, they may receive the benefit of physical improvements and general beautification put into place by the BIA that increases the enjoyment of the area by their clients.
A municipality may consider a maximum BIA levy for one or more separately assessed properties, or categories of them. A municipality may also consider a special charge on property within the BIA that is, in council’s opinion, deriving a special benefit from the improvement area.
Q. What is the process that a municipality needs to undertake to put in place its own local structure for a BIA?
A municipality may consider using its powers to change or dissolve local boards to create locally decided structures or rules for BIA matters.
Municipalities can also consider creating rules for traditional BIAs, without dissolving them or changing them.
Q. How could the municipal delegation of authority impact my BIA?
A municipality may consider using its delegation powers with respect to BIAs.
BIAs are encouraged to have an on-going dialogue with their municipalities on the possible use of the delegation authority by the municipality and circumstances under which it could potentially be of mutual benefit for certain authorities to be delegated to the BIA.
Q. What things does a BIA need to consider as a local board?
The Municipal Act, 2001 and the City of Toronto Act, 2006 contain a number of provisions relating to the powers and responsibilities of municipalities and their local boards. It is up to municipalities and BIAs to decide locally about their operations within that framework.
BIAs and municipalities may wish to review the responsibilities of local boards. General information is available in the Responsibilities of Local Boards section of the Handbook.