Improvement Districts (BIDs, SIDs, SSAs, etc) are seeing challenges in New Jersey, where a new bill [A-3859] has been proposed that would require the reauthorization of a special improvement district (SID), every ten years by the majority of affected property owners. According to a legislative update from the New Jersey Managed Districts Association, the bill was amended on the floor of the Assembly and will be posted again for a vote by the full Assembly at its next voting session sometime in May. The bill in its original form would make it easy to dissolve SIDs by effectively counting absentee ballots as 'no' votes. The ammendments to the bill, offered in the last legislative session, address this issue, but also shorten the reapproval timeframe to 5 years from 10 years.
For more information see: Legislative Alert, New Jersey League of Municipalities [3/11]
While the proposed legislation may seem advisable from a brief summary of its intent, it is unecessary and potentially damaging to the thinking behind improvement districts in New Jersey. There are numerous statutory processes in place in New Jersey for accountability by improvement districts and for a district to be terminated if there is sufficient indication that it should not be continued. Each is literally reauthorized every year through a required budget process, that includes a public hearing and adoption, or not, of the budget by the municipal governing body that created the district in the first place.
ReplyDeleteIn addition to layering an unecessary process on top of existing requirements, the reauthorizion process, as proposed, would politicize the continued operation of improvement districts. The process favors "no" votes by discouraging voting by anyone other than those most vehement about their opposition to the district. And, it does not included the business operators most directly affected by improvement districts, who often pay the district assessment through their leases.