Audit Update: City reviewing Enhanced Services Districts, Code changes possible in September

This is our first follow-up on the recommendations from our 2020 audit Enhanced Services Districts: City provides little oversight of privately funded public services. In that report we assessed the City's role in creating the districts and monitoring their activities. We found its hands-off approach may contribute to disparate law enforcement outcomes within districts and limits community members' ability to influence activities and monitor the results. We found limited City oversight of services in the districts and no guidelines for their formation or governance.

We recommended the Office of Management and Finance work with City Council to review the purpose and the City's responsibility for the districts and revisit the agreements. If the districts continue to provide services in public spaces, the City should develop guidelines for formation, governance, and management that ensures public input, transparency and accountability by the districts and their service providers.

The Office of Management and Finance hired a coordinator to review governance and oversight. The coordinator expected to complete the review by September 2022 and make recommendations for changes to City Code and district agreements.

One recommendation in process

• New coordinator hired to review status of districts
  
  We recommended the City review the status of districts, their purposes, and City’s responsibility for them. If the review determines that districts continue to provide services in public spaces, the Office of Management and Finance should propose City Code for Council approval governing:
  
  a. District formation
  b. Scope of allowed services in public spaces
  c. Inclusive district governance
  d. Accountable and transparent reporting
  
  Management and Finance hired a coordinator in August 2021 to review the oversight and structure of enhanced services districts. Its goal is to bring recommended Code changes to Council by September 2022.

One recommendation not implemented

• 
  Revised district agreements and oversight structure expected after review

  
  We recommended the City revise district agreements between the City and each district to align them with revisions to Code.

  We also recommended the City develop a process for effective City oversight of district agreements. It should include a project manager or a liaison over the districts and reporting of district activities to Council and the public, including reporting of security and law enforcement activities.

  Implementation of these recommendations is dependent on the results of the review scheduled for completion in September.

View the 2020 audit report and recommendations.

Visit our online dashboard to track the status of recommendations from other reports