Probe finds no evidence of wrongdoing in Huntington Beach business district finances
Following a weeks-long investigation into the financial history of the Huntington Beach Downtown Business Improvement District, the city Finance Commission has found no evidence of mismanagement of funds or hidden assets, documents show.
A finance subcommittee formed by commission chair Carol Woodworth and commissioners Ken Small and Ron Sterud reached the conclusion after reviewing six years of financial records pertaining to the public-private partnership tasked with revitalizing downtown.
However, the subcommittee found the BID “has grown to a size and complexity beyond its current business structure,” and recommended improvements to its business practices.
The council authorized the BID audit in late February after Councilman Erik Peterson called for an investigation to make sure “everything was above board.”
Peterson said Friday he found the investigation thorough.
Days after the council approved the financial review, a group of downtown business owners submitted a petition to the city with about 100 signatures requesting the removal of the BID’s nine board members.
Some signatures were repeated, but Susie Smith, former BID president and petition drive organizer, said some signers have more than one downtown business and have to pay BID dues for each, granting them multiple votes.
That petition alleged that the BID has kept two sets of books since 2011 and that one of the accounts, totaling $271,000 as of September, was kept from the council.
The viability of the petition was called into question in early March after a few signatories said they were misled by the organizers and didn’t support it.
Throughout the unfolding events, BID President Steve Daniel has held that there is no secret account and that the one referred to by the petitioners contains revenue from Surf City Nights, a Tuesday night street fair sponsored by the BID.
Peterson said he spoke with some of the subcommittee members who conducted the review, and they told him the Surf City Nights account was never intentionally concealed.
Daniel has said that he requested the financial review because the BID was being unfairly targeted, and he believed the findings would lend that position credence.
Daniel said he was “100 percent” behind the subcommittee’s findings.
The subcommittee also concluded that the BID had reached a level of sophistication that requires implementing new business practices, and members outlined a series of recommendations for the council to consider applying to the BID’s operations.
These include having the BID prepare more detailed financial statements from all bank accounts and hiring a BID director who would serve as a permanent board member and act as a cohesive, guide to the BID, the document says.
The subcommittee also recommends periodically auditing all city BIDs — downtown, Visit Huntington Beach and the auto dealers — with a city-selected auditor.
The Finance Commission plans to present its findings Monday to the City Council.
Twitter: @benbrazilpilot
