DOWNTOWN DETAILS. Eau Claire's Business Improvement Districts – including one that encompasses South Barstow Street, shown here – help fund downtown amenities and services, from flower planters to garbage removal.

In what one of the resolution’s authors calls an “unprecedented” move, an Eau Claire City Council resolution voicing support for the city’s four Business Improvement Districts is receiving pushback from the city attorney’s office.

A memo from the city’s legal arm says the resolution – sponsored by City Council members Kate Felton and Aaron Brewster – would encourage actions that are “improper at best or unlawful at worst” and advises that the council “not take such action.”

The resolution will be discussed at a public hearing of the Eau Claire City Council at 6pm Monday, Feb. 10, and may go to a vote at a meeting at 4pm Tuesday, Feb. 11.

The controversy is centered on the city’s Business Improvement Districts, also known as BIDs, which are special taxing entities that raise funds from downtown businesses that are used on projects to improve the business districts and the community as a whole. Eau Claire has four BIDs: Water Street, West Grand Avenue, North Barstow/Medical, and South Barstow – the latter being the oldest BID in the state, having been formed in 1985.

The resolution notes that in 2025 the BIDs will generate more than $350,000, “funds that are otherwise unavailable to the city, to pay for promotion of the districts, beautification, and essential services, like public garbage collection and snow removal.”

These normally low-profile entities – which are served by volunteer boards filled mainly with the owners of downtown businesses or properties – have helped lead to “an incredible renaissance downtown,” Felton said in an interview. However, she added, the relationship between the BIDs and the city itself is increasingly tense.

“Myself and Aaron (Brewster) both have gotten comments from the community, particularly downtown businesses and BID board members, with some concerns about city policy and also generally the direction the city is taking with BIDS,” she said.

City Council Member Kate Felton. (File photo)

“They have described to me a feeling that the city is doing all that they can to make the work of the BIDs harder and to bring the work of the BIDs to a halt,” she continued. “A lot of what I’ve heard about is in relation to minute procedures, meeting norms, and that sort of thing. It might be (the city) taking things off of the agenda without notifying them. … It might be telling them that individual board members can’t work on projects independently because that violates open meetings laws.”

This friction inspired Felton and Brewster to propose their resolution. Among other things, it would pledge City Council support for “a BID board-led update of BID Operating Plans to reduce confusion and ambiguity for board members and city staff.” It also calls for the creation of a policy handbook for the BIDs containing state laws and city policies, “to increase clarity, reduce missteps and conflict with staff, and make their work with city staff and the community more efficient and effective.”

Finally, and perhaps most controversially, the resolution calls on the City Council and city staff to acknowledge that BIDs have the right to hire their own attorneys if a BID board sees fit, to “write and manage their own agendas,” and to “work on projects outside of meetings, as long as the work is being done by individual BID members in accordance with Wisconsin open meeting statutes … and is directed by the BID board.”

It is these latter items that attracted some of the harshest responses from the Office of the City Attorney, which is led by Stephen Nick. In a memo responding to the proposed resolution and included in a packet sent to City Council members, Assistant City Attorney Jenessa Stromberger wrote that there are “legal concerns” with the resolution, including “improper direction of staff.” The memo also suggests the resolution amounts to “encouraging or permitting avoidance of state law.”

Among other things, the memo dismisses the suggestion that BIDs should be allowed to hire outside legal representation. “As a ‘branch’ of the City, BIDs are represented by the City Attorney’s Office with respect to all legal matters,” the memo states. “Branches of the City do not have the ability to hire their own legal counsel because they are not an entity unto themselves.”

Felton acknowledged that the question of whether BIDs can hire their own attorneys is a matter of debate. However, she added, “The fact our BIDs so fervently think they need outside counsel says a lot to me.”   

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 the tone that this memo takes — not only don’t vote for this, but you could be held legally liable – (is) definitely unprecedented.

EAU CLAIRE CITY COUNCIL MEMBER KATE FELTON

on a city attorney's office memo about her resolution

Stromberger’s memo raises objections to how the resolution seeks to direct city staff members. “Not only are many of these actions improper at best or unlawful at worst … but it is also improper and unlawful for the City Council to direct or attempt to supervise staff.” The memo goes on to say that because Eau Claire has a city manager form of government, only the city manager – Stephanie Hirsch – can supervise city employees.

The memo continues: “The city manager, city attorney, and treasurer are statutory officers of the city who the proposed resolution attempts to direct. These individuals have a statutory obligation to follow the law and lawful policies of the city and cannot be directed by City Council to execute their duties in any certain manner.”

Felton said she found these declarations “surprising,” as they suggest the City Council has essentially no ability to direct city staff. While Felton acknowledged that the City Council can only directly hire or fire one city employee – the city manager – she added that “to say that the City Council has zero authority to set direction or priorities for the city staff is inaccurate and inconsistent with past practice.” For example, she noted that a City Council resolution about clean energy goals passed in 2017 continues to directly shape decisions made by city staff members.

The city attorney’s office memo also suggests that the resolution could enable potential “misconduct” by BID members. The memo explains that the City Attorney’s Office and the city Finance Department have met with each BID board during the past year to explain how they must conform to open meetings laws, public record requirements, and city procurement requirements. While the memo states that most BID members have “made good faith efforts to comply” with these rules, it adds that “there are some BID board members who seek to ‘get out from underneath the city purchasing policy and legal,’ as stated in an email on February 5th, 2025, from a South Barstow BID Board Member. This type of conduct does not meet the standards of the City’s Public Officials Handbook and has significant consequences, both legal and policy related, if acted upon.” (The BID board member who wrote the email is not named.)

The memo continues by stating, “Encouraging or permitting avoidance of state law or directing City staff to do so, even if that is not the intent of the resolution, is a potential violation of the City’s Public Official Handbook and misconduct.”

When questioned about this statement, Felton said her resolution doesn’t encourage anyone to break the law. In fact, she said, “The resolution literally states in several places ‘in accordance with state law’ and even in some places cites those laws, and the language is directly taken from that law.”

Ultimately, the city legal memo tells City Council members to reject the resolution: “It is advised and encouraged that the City Council not take such action,” it states.

Eau Claire City Hall.

Felton, who has served nine years on the City Council, said such a legal statement advising council members how to vote is unusual. “That is not something that I have ever really seen,” she said. “I would call that unprecedented, and I think the tone that this memo takes — not only don’t vote for this, but you could be held legally liable – (is) definitely unprecedented.”

Nonetheless, Felton hopes that in discussing the resolution, she and her council colleagues will have an “opportunity to reset the culture” as it pertains to BIDs. In addition to serving on the council, Felton owns and operates a business – Eau Claire Outdoors, on North Barstow Street – and she says that without the BIDs, the city wouldn’t be able to afford much of what makes downtown Eau Claire stand out.

“I look at the street my business sits on, and basically every amenity on that street is because of the BIDs,” she said. “Everything from the garbage cans that keep the sidewalks clean to the flower planters to the trees to the music to the lights — everything that makes downtown special and makes people want to come downtown, that’s because of the BIDs.”

The proposed resolution by council members Kate Felton and Aaron Brewster.

The upcoming City Council public hearing, held in the City Hall Council Chamber (203 S. Farwell St., Eau Claire) from 6-8pm on Monday, Feb. 10, will include public comment on Kate Felton and Aaron Brewster's proposed resolution • View the Feb. 10 City Council agenda packet online