So it begins…

Portland’s Office of Management and Finance (OMF) has finally kicked off the highly anticipated Enhanced Services Districts (ESDs) audit review process with two public listening sessions in early June. Let’s break down what happened and what to expect going forward.

Overall, the listening sessions are a large improvement compared to last year’s Clean & Safe contract renewal listening sessions. Instead of OMF controlling who can speak and forcing everybody to try and fit all their feedback into a two minute allotted time slot (lest you get muted mid-sentence), these meetings are open zoom meetings and structured as a back and forth dialogue.

With that said, there are a few flaws with the listening sessions. For one, all the listening sessions are happening on Tuesdays and Thursdays from 6-8pm making it difficult for those who cannot attend evening meetings. The meetings are also all happening throughout the month of June with different topics each time. This can be a little overwhelming and difficult for people who want to speak about certain issues but maybe can’t attend the listening session dedicated to that issue. Finally, all the sessions are hosted entirely on zoom leaving people who cannot access zoom out of the process.

Regardless, let’s get into what happened during the first two listening sessions. The first one, on June 2nd, was a general overview of the audit response process and the second one, on June 7th, was all about potential future governance of ESDs.

Let’s start with the audit response overview. This session lasted just under an hour and there wasn’t too much that happened. Shawn Campbell, the ESD coordinator, went over the timeline for the review process and what the goals were. Check out the powerpoint presentation with all the information and watch the recording of the meeting.

A few significant things came out of the meeting, however. When asked who would be in charge of drafting the recommendations for City Council regarding the proposed changes to ESD City Code, Shawn answered that it would be a collaboration between OMF and staffers from each of the City Commissioner’s offices.

Who will be representing each office is still unclear. During the “governance” listening session Shawn said he does not yet know but will find out. But we’re getting ahead of ourselves.

Prior to the start of the listening sessions, OMF released a survey in the beginning of May for members of the public to fill out regarding the future of ESDs. It will be open until the end of June. Unfortunately, this survey has a lot of flaws and can be extremely daunting to fill out. Rest assured, however, as we created a toolkit to help you fill out the survey. Check it out!

During the first listening session Shawn admitted that, yes, the survey is not that good. He claimed that the listening sessions will allow for much more conversation regarding the nuances of ESDs and that anyone can submit written comment or schedule a meeting with him.

Once this process is all said and done at the end of June, OMF and the City will come together to draft recommendations for the future of ESDs throughout July. By August, those recommendations will be available for feedback from the public, prompting a second survey and second round of listening sessions. All of this will culminate in the recommendations being brought forth and voted on by City Council in September.

Now, let’s move onto the second listening session focused on “Governance”. This session was attended by more people than the first and spanned the entire scheduled two hours. There was a lot to discuss. The big takeaway? Everyone agrees ESDs are obscenely non-transparent and there’s a lot that needs to change. 

Let’s get into the nitty gritty.

A large chunk of the people who attended this listening session were residential property owners within the Clean & Safe district. They all shared concerns about how Clean & Safe’s governance currently operates, privileging large commercial property owners and catering towards businesses more than residents.

For some background context, ESDs initially did not require residential property owners to pay. This changed in 1997 despite opposition. Residential property owners have long been disillusioned by the prospect of being required to pay into a district that caters to businesses. Notably, in 2012, Clean & Safe tried to expand its boundaries by a few blocks that mostly consisted of residential property. Condo owners weren’t having it and overwhelmingly opposed the expansion causing it to never come to fruition.

This is all to say the tension between residential property owners and commercial property owners within ESDs runs deep.

Much to our delight, the residential property owners wasted no time grilling Shawn about why there has been such little transparency within ESDs. Multiple people brought up how Homeowner Associations abide by open meeting law and it doesn’t make any sense why ESDs are not held to the same standard, especially since the districts operate in public space.

To further this discussion we also mentioned how in other cities Business Improvement Districts (BIDs) are typically subject to open meeting and public record law (not that they always abide by it, of course). Portland is somewhat of an anomaly.

We also reminded everyone one of the major reasons why the audit of ESDs happened in the first place: because during our attempt to receive public records about ESDs the City either did not collect those records (even if it was required in their contract) or we were told to go through the ESDs to get those records (which they are under no obligation to give to us).

Overall, attendees were in agreement that, at the bare minimum, it should be written in City Code that ESDs must abide by public record and open meeting law. Something all three ESDs fail to do by making all board meetings and meeting minutes private.

In an effort to ensure compliance with open meeting and public record law it was recommended consequences for non-compliance are also enshrined in City Code. Especially since the audit found ESDs were not complying with several aspects of their contracts yet faced zero consequences. Shawn said that currently non-compliance can result in the City withholding funds or terminating ESDs’ contracts. Currently, City Code does not specify this, however.

Furthermore, it was recommended not only should board meetings be open to the public to observe but also the meetings should have an opportunity for the public to engage during the meeting. At the bare minimum, a public comment period should be scheduled for all meetings. Ideally, however, board meetings would allow members of the public to engage in back and forth conversation throughout meetings.

This conversation was followed by a discussion about who should be represented on the boards of ESDs. Currently and historically, both Clean & Safe and Lloyd have only had ratepayers and representatives from businesses on their board. Central Eastside, on the other hand, requires minimum representation from several different stakeholders. 

It is worth noting, however, the only reason Central Eastside has more diversity represented on their boards is because a community coalition waged a campaign to block the formation of the ESD in the first place. More board representation, specifically requirements to have unhoused people represented on the board, was a compromise the Central Eastside made in order to appear like they were listening to community concerns, paving the pathway to a unanimous City Council vote approving their formation.

Despite the requirement to have more equitable representation on the board, this doesn’t always translate to equitable participation. We raised concerns about tokenization and the spoken and unspoken hierarchy inherent in how boards operate.

This brought a discussion about how ESDs are set up in such a way that those who own property with higher value can have more say (and often they do). For example, in order for property owners to terminate a contract, current City Code requires a number of petitions that represent at least 33% of property value in the district. This makes it highly unlikely for smaller property owners, even if they make up a large majority of ratepayers, to reach enough petitions to terminate a contract. 

We also brought up how in California, BIDs are required to have property owners vote when a BID is being created or renewed. This could be something to bring to Portland, however, we emphasize it shouldn’t be structured the same way as California. This is because votes are weighted by property value, prompting a similar issue where larger property owners have a larger say. So much for democracy, right?

There are multiple examples in Los Angeles where BIDs passed despite receiving more no votes than yes votes: Chinatown, Venice Beach, and Greater Leimert Park. Because the yes votes were weighted more, the BIDs passed. Therefore, even if the majority of the people who live, work, or spend time in the district oppose a BID it can still pass because a handful of wealthy property owners say so. To make matters worse, both Venice Beach and Greater Leimert Park only passed because the City of Los Angeles tipped the scale.

Portland could force ESDs to allow property owners to vote and not weigh the votes by property value, but better yet, they could make the ESD fee optional so no one is required to pay if they don’t want to. This could put a significant dent into how much money ESDs receive and ultimately reduce their power. And guess what?! This will be up for discussion on the June 28th listening session regarding “who pays”.

Now that was a lot of ground to cover, but if you still want to learn more about the conversation around governance you can check out the powerpoint and watch the entire meeting.

Overall, this listening session did a good job exposing many of the inherent inequities in the structure of ESDs. And we’re just getting started! 

Starting next week, on June 14th, OMF will begin discussions regardings “allowable services”. There will be three listening sessions focused on this topic. The first one (6/14) is general, the second one (6/16) will be about public safety programs, and the third one (6/21) will be about non-public safety programs. You can find registration for each of these listening sessions as well as more information about the audit review process here.