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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 03/23/2021 - FIRST READING OF ORDINANCE NO. 050, 2021, AMENDING Agenda Item 3 Item # 3 Page 1 AGENDA ITEM SUMMARY March 23, 2021 City Council STAFF Clay Frickey, Redevelopment Program Manager John Duval, Legal SUBJECT First Reading of Ordinance No. 050, 2021, Amending Chapter 22 of the Code of the City of Fort Collins to Add a New Article V. Concerning the Establishment of Tourism Improvement Districts. EXECUTIVE SUMMARY The purpose of this item is to consider adoption of an ordinance outlining the requirements for establishing a Tourism Improvement District (TID). Visit Fort Collins (VFC) began exploring a TID based on engagement for the Tourism and Destination Master Plan. Due to the COVID-19 pandemic, hoteliers are looking for additional revenue streams. Lodging tax collections are down 47.6% through December 2020. A TID would allow hotels to levy an assessment or fee on all hotels that would allow the TID to undertake activities that would help increase demand for overnight visitation. VFC contemplates a TID that would levy an assessment or fee on hotel businesses rather than the underlying property owner. This necessitates a local ordinance outlining the process for forming a TID, the powers of a TID, and TID governance, amongst others. If adopted by Council, VFC contemplates starting the formation process of a TID beginning in April with Council considering the TID in July. STAFF RECOMMENDATION Staff recommends adoption of the Ordinance on First Reading. BACKGROUND / DISCUSSION In 2019, the City and Visit Fort Collins (VFC) jointly funded an effort to create a Tourism and Destination Master Plan. Work began on the Plan and came to a halt in April 2020 due to the COVID-19 pandemic. During the engagement, stakeholders noted additional revenue sources would be beneficial to hoteliers. From this discussion came the idea to create a Tourism Improvement District (TID) in Fort Collins to supplement hotel revenues. An additional revenue stream for hotels became more important during the COVID-19 pandemic. Lodging tax collections are down 47.6% through December 2020, demonstrating the severity of the pandemic’s impact on the hospitality industry. The VFC Board of Directors approved moving forward with a feasibility study to determine if a TID is an option for Fort Collins. VFC hired Civitas to conduct the TID Feasibility Study. The Feasibility Study finds that Colorado statutes permit TIDs and that Fort Collins may create its own local ordinance permitting a business-based TID. The VFC Board of Directors considered and approved a formal proposal to move forward with the forma tion of a business-based TID. This led to Civitas and VFC approaching the City to begin formal exploration of a TID. Civitas and VFC presented an update on the Tourism and Destination Master Plan and the idea of forming a TID at the Council work session on February 23, 2021. Council unanimously supported further exploration of a TID and the adoption of a local ordinance permitting a business-based TID. Agenda Item 3 Item # 3 Page 2 Business Based Improvement District Overview The proposed ordinance would allow the formation of a TID that levies an assessment based on type of business. Most Business Improvement Districts (BIDs) levy an assessment on the property itself. BIDs may form and levy an assessment on property owners using State statutes. This is an important distinction for the TID as the levy will apply to the hotels in Fort Collins regardless of who owns the underlying real property, necessitating a local ordinance. Not all hotels own their property and so this method of assessment directly targets hotels. Another distinction between a TID and a standard BID is the boundaries of the district. Most BIDs form based on a shared geography. The Midtown BID, for example, formed since the businesses share issues and desired improvements by virtue of their location in the community. Under this type of improvement district, VFC contemplates the boundaries of the TID to be co-terminus with City limits. VFC’s proposal is that any hotel with more than three rooms operating within the City’s boundaries would be subject to the TID assessment . This will also allow the TID to include hotels into the district as they annex into the City. The TID is required to submit to the City its initial plan (Initial Plan), which will govern its future operations and activities and will be subject to Council approval. One of the key qualities of a TID is that the levy is an assessment or fee, not a tax. Unlike taxes, assessment and fee dollars may only fund programs and services that benefit only those paying the assessment or fee, and not to those not charged. Furthermore, assessment and fee revenue cannot fund other activities outside of TID services. TID assessment dollars will always remain allocated for the provision of TID activities and services. Assessments and fees are also not subject to a TABOR vote. Formation Process Establishing a TID would follow a similar procedure to creating a BID. Formation steps include: 1. Petition: Hotel operators consisting of more than 50% of the overall hotel rooms within the proposed boundaries of the TID must sign the petition forming the TID. Th petition is filed the petition with the City Clerk. 2. Public hearing: Council would hold a public hearing to consider the formation of the TID. Council would consider the service area, geographic boundaries, and activities of the proposed district at the public hearing and determine whether establishing the TID is in the City’s best interest. 3. Adoption of an Initial Plan: Council must also take action to approve the TID’s Initial Plan prior to it collecting its assessment or fee and conducting any of its activities. The TID must also file annually with the City an annual plan (Annual Plan), which includes the budget for the upcoming year, by September 30 of each year. The Annual Plan is subject to the Council approval. General Powers of a TID A TID under the ordinance would have the following general powers: • Exist in perpetuity or for a limited term; • To levy taxes subject to a TABOR vote, but not property taxes • Enter into contracts and agreements; • Borrow money and incur indebtedness, except it would not be allowed to issue bonded debt without prior Council approval; • Acquire, construct, finance, install, and operate “tourism improvements” and provide “tourism services” as contemplated by the Ordinance; • Nominate the directors for the TID board for Council approval; • TID board may adopt and amend bylaws. Agenda Item 3 Item # 3 Page 3 The Ordinance outlines the various activities, defined as “tourism improvements” and “tourism services,” that a TID may perform. These activities include: • Promotion and marketing in support of tourism; • Organization, promotion, marketing, and management of public events; • Provision and maintenance of tourism improvements Prohibited Powers: • No eminent domain power • No regulatory powers Proposed TID Assessment/Fee Rate The Ordinance proposes a three percent (3%) annual assessment/fee rate of gross short term (stays less than 31 days) room rental revenue. Based on the benefit received, assessments/fees will not be collected on lodging business stays of more than thirty (30) consecutive days. Governance Owners or representatives of the lodging businesses paying the assessment/fee will be eligible to serve on the TID Board to provide improvements and activities for a Fort Collins TID. The TID Board must provide an annual report to City on the TID’s annual activities and expenditures, similar to other BIDs. This report is also available to business owners. Next Steps If Council adopts this Ordinance, VFC will begin the formation process of a TID. VFC anticipates the following timeline for adopting a TID: • April 2021: Finalize Initial Plan and Petition. • May-June 2021: Petition drive securing signatures of business owners subject to assessment, in the proposed District operating not less than fifty percent of the hotel rooms. • July 2021: Notice of hearing not less than 21 days nor more than 42 days after filing of petition. o Must be published in the newspaper and mailed to each assessed business owner. • July 2021: Hearing on formation of the District. • August 2021: District begins collecting assessment/fee. CITY FINANCIAL IMPACTS TIDs are separate legal entities and will not impact the City financially. ATTACHMENTS 1. Powerpoint Presentation (PDF) March 23, 2021 To urism Improvement District (TID) Ordinance Clay Frickey, Redevelopment Program Manager ATTACHMENT 1 Background •Initiated by Visit Fort Collins •To urism industry heavily impacted by COVID-19 •Revenues down 47.6% through December •TID would provide additional revenue •Presented at Council Work Session on February 23 •Provided direction to develop local ordinance 2 Ordinance Comparison Business Based As sessment/Fee Property Based As sessment/Fee Governing Law Local ordinance BID Act As sessment Basis Ty pe of business, annual revenue, occupancy/capacity, # of employees Lot size, built square footage, lineal square feet frontage, use code/zoning Collection Collected with transient occupancy taxes or other method as determined by the TID and the City Collected with property taxes Overlap Allows for overlap with existing and future districts No allowable overlap authorized 3 Formation Process 1.Petition •Need approval of 50% of hotel rooms 2.Public hearing •Service area •Boundaries •Activities 3.Adopt Initial Plan •Outlines activities and budget of TID •Adopted by City Council 4 Powers of TID •Exist in perpetuity or limited term •Enter into contracts or agreements •Borrow money/incur debt •Requires Council approval •Develop improvements •Nominate Board •Board appointed by Council •Adopt and amend bylaws 5 Activities of TID •Promotion/marketing supporting tourism •Organization, promotion, marketing, management of public events •Provision and maintenance of tourism improvements •Tw o powers prohibited •Eminent domain •Regulatory powers 6 Governance •May nominate a Board •Payors of assessment •Must provide annual report to City Council •Activities •Expenditures •Available to all members 7 Next Steps Finalize Initial Plan and Petition April 2021 Petition drive May -June 2021 Public hearing July 2021 TID begins collecting assessment August 2021 8 Recommendation Staff recommends adoption of the ordinance. 9 -1- ORDINANCE NO. 50, 2021 OF THE COUNCIL OF THE CITY OF FORT COLLINS AMENDING CHAPTER 22 OF THE CODE OF THE CITY OF FORT COLLINS TO ADD A NEW ARTICLE V CONCERNING THE ESTABLISHMENT OF TOURISM IMPROVEMENT DISTRICTS WHEREAS, as a home rule municipality, the City has the authority under Article XX, Section 6 of the Colorado Constitution to establish local improvement districts and other types of special districts that are separate and distinct governmental entities from the City; and WHEREAS, the City may establish these districts to provide public improvements and services that are of local and municipal concern as needed to benefit the health, safety and welfare of the City’s residents and its visitors; and WHEREAS, due to the recent COVID-19 pandemic and its effect on the hospitality industry, the City’s lodging businesses have suffered a substantial decrease in revenues and, as a result, the City has suffered a corresponding decrease in its sales tax and lodging tax revenues collected from these lodging businesses; and WHEREAS, tourist and other people visiting the City contribute substantially to the health of the City’s economy and provide a significant number of jobs for City residents, as well as directly benefiting the City’s lodging business and other tourism-related businesses in the City; and WHEREAS, as one tool to help these sectors of the City’s tourism and visitor economy to recover from the effects of the pandemic, this Ordinance will allow the City’s lodging business to organize and establish, subject to City Council’s approval, tourism improvement districts that will, among other things, be able to impose certain taxes, fees and assessments to paid by the lodging businesses and for the resulting revenues to be used by the districts to provide certain tourism-related improvements and services to encourage tourists and others to visit the City and stay at the City’s lodging businesses; and WHEREAS, adoption of this Ordinance will therefore serve the public purposes of helping to restore the economic health of the City’s hospitality industry, restore jobs lost in that industry and generally contribute to the public’s health, safety and welfare. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That the City Council hereby makes and adopts the determinations and findings contained in the recitals set forth above. Section 2. That Chapter 22 of the Code of the City of Fort Collins is hereby amended by the addition of a new Article V, which reads in its entirety as follows: ARTICLE V. TOURISM IMPROVEMENT DISTRICTS -2- Sec. 22-150. Council findings. It is the policy of the City that tourism improvement districts be organized under this Article V to provide improved, enhanced, additional or otherwise unavailable tourism-related facilities and services that are over-and-above the facilities and services regularly provided by the City. The organization of tourism improvement districts within the City having the purposes and powers provided in this Article V will serve the following public purposes: (i) promote economic health; (ii) promote the health, safety, prosperity, security and general welfare of the City’s residents and visitors; and (iii) specially benefit the lodging businesses within the boundaries of any district created under this Article V. The City is empowered to create tourism improvement districts as authorized in this Article V under its plenary home rule authority over matters of local and municipal concern, as authorized by Article XX, § 6 of the Colorado Constitution. Sec. 22-151. General power to establish tourism improvement districts. The City authorizes the establishment and organization of tourism improvement districts within the City under this Article V to fund and provide tourism improvements and tourism services that will confer special benefits upon lodging businesses within such districts and confer general benefits to the City and its residents and visitors. Sec. 22-152. Legal status of tourism improvement districts. Any tourism improvement district created under this Article V shall be deemed a body corporate and politic, a "district" within the meaning of Article X, § 20(2)(b) of the Colorado Constitution, and a unit of local government distinct and separate from the City itself. As a legal entity established entirely through an exercise of the City's home rule authority, tourism improvement districts shall not be considered political subdivisions of the state. The multiple-fiscal year debt and other financial obligations of a tourism improvement district shall not be considered obligations of the City nor shall a district’s fiscal year spending and revenue be considered that of the City. Sec. 22-153. - Definitions. As used in this Article V, unless the context indicates otherwise, the following words and terms shall have the meanings set forth below: Annual plan shall mean the board's annual report outlining the district's revenues, expenditures, projects and goals. Authorized manager shall mean the person who exercises overall responsibility to manage the day-to-day operations of a specific lodging business and is authorized by the lodging business to sign a petition for the inclusion of the lodging business in a tourism improvement district. Board shall mean the board of directors of a tourism improvement district. -3- City shall mean the City of Fort Collins, a home rule city and municipal corporation of the State of Colorado. City Clerk shall mean the City Clerk duly appointed by the City Manager as provided in Article II, § 12 of the Charter, or their designee. City Council shall mean the City Council of the City. City Manager shall mean the City Manager duly appointed by the City Council as provided in Article III, § 1 of the Charter, or their designee. Director shall mean a member of the board of a tourism improvement district. Elector shall mean a natural person who is a resident of the State of Colorado, is eighteen (18) years of age or older and registered to vote in general elections in the State of Colorado, and who: (1) Maintains a lodging tax license with City and is obligated to pay the lodging tax by virtue of ownership and operation of a lodging business in the tourism improvement district; or (2) Is the natural person designated to vote for an entity that: a. Is not a natural person, and b. Maintains a lodging tax license with the City and is obligated to pay the lodging tax by virtue of ownership of a lodging business in the tourism improvement district. Such designation must be in writing, under oath, on a form approved by the board and filed with the secretary of the district. Only one (1) such natural person may be designated by the lodging business owner. Nothing in this definition shall permit a lodging business to cast more than one (1) vote per lodging business whether through a designated elector or as a natural person. Establishment ordinance shall mean the ordinance passed by City Council establishing a tourism improvement district and containing the information required in § 22-163. Financial Officer shall mean the Financial Officer duly appointed as provided in Article V, § 21 of the Charter, or their designee. Initial plan shall mean the plan submitted with the petition to organize a tourism improvement district containing the information required in § 22-158. Lodging accommodation shall have the meaning given to it in the lodging tax ordinance. -4- Lodging business shall mean any “lodging provider,” as this term is defined in the lodging tax ordinance, who is required to obtain a lodging license and to pay the lodging tax Lodging license shall mean the license that lodging businesses must obtain from the Financial Officer under the lodging tax ordinance to engage in the business of providing lodging accommodations within the City. Lodging tax shall mean the lodging tax imposed by the lodging tax ordinance. Lodging tax ordinance shall mean Article IV of Chapter 25 of the Code. Maintenance shall mean the periodic cleaning, repair, restoration, rehabilitation, refurbishment and replacement of an existing improvement. Room shall mean any portion of a building designed for an occupancy as a complete, independent living quarter for one (1) or more natural persons, having direct access from outside the building or through a common hall and having living, sleeping and sanitary facilities, and may also include kitchen facilities, which living quarter is for the exclusive use of the occupant(s). Self-affirmation shall mean a self-affirmation substantially in the form shown in § 22-157(a). Tourism improvements shall mean any public improvements designed and intended to be used in support of the tourism services to be provided by the district, which may include, without limitation: decorative structures; identification and directional signs; bicycle and pedestrian paths; buildings and facilities located anywhere in the City primarily designed to host and serve conventions and meetings or to otherwise serve visitors to the City and the traveling public; and all necessary, incidental and appurtenant structures and improvements thereto. Tourism improvement district or district shall mean a tourism improvement district established under this Article V. Tourism services shall mean any of the following: (a) the maintenance of any district-owned tourism improvements and any other publicly-owned buildings or facilities located anywhere in the City primarily designed to host and serve conventions and meetings or to otherwise serve visitors to the City and the traveling public; (b) the organization, promotion, marketing and management of public events; (c) marketing and promotions services designed to attract more tourists, visitors, conventions and other meetings to the City; and (d) any combination of the foregoing services. Sec. 22-154. General powers of tourism improvement districts. Except as may be limited or modified by the establishment ordinance, tourism improvement districts shall have the following powers: -5- (1) Term. To have perpetual existence unless limited as provided in the establishment ordinance. (2) Levy taxes, fees or assessments. To fund tourism improvements, tourism services and the other affairs of the district by levying taxes, fees and assessments on the lodging businesses or upon persons purchasing lodging; provided, however, that a district shall have no authority to impose any ad valorem property tax. (3) Elections. To hold elections for the purpose of levying taxes, approving any multiple-fiscal year obligation of the district, or conducting any other district affairs. A district’s elections shall be conducted in accordance with the Colorado Local Government Election Code in Article 13.5 of the Title 1 of the Colorado Revised Statutes. Provided, however, that the definition of electors eligible to vote in such an election shall be as provided in this Article V. In the event of any other conflict between this Article V and the Colorado Local Government Election Code, the requirements of this Article V shall control. (4) Contracts. To enter into contracts and agreements affecting the affairs of the district, including, without limitation: (i) contracts relating to the district’s tourism improvements and tourism services; (ii) contracts with the City for the collection and expenditure of district tax, fee and assessment revenue; and (iii) contracts for any other administrative, legal or financial services necessary to assist the district in the performance of its lawful functions. (5) Control of district business. To have the management, control and supervision of all the business and affairs of the district and of the acquisition, construction, financing, installation and operation of tourism improvements and the funding and operation of district tourism services. (6) Property interests. To acquire, construct, finance, install and operate the tourism improvements contemplated by this Article V and to acquire all property, rights or interests necessary, incidental or appurtenant thereto and to dispose of real and personal property and any interest therein, including leases and easements in connection therewith. (7) Employees and contractors. To hire employees and retain agents, engineers, consultants, attorneys, accountants and other professionals as need to conduct the affairs of the district. (8) Litigation. To sue and be sued and be a party to suits, actions or proceedings. (9) Bylaws. To adopt and amend bylaws not in conflict with the constitution and laws of the United States and State of Colorado or in conflict with the City’s Charter, Code and ordinances as needed by the district for carrying on its business objectives and the affairs of its board. -6- (10) Necessary, incidental, and implied powers. To exercise all rights and powers necessary or incidental to or implied from the specific powers granted in this Article V. Such specific powers shall not be considered as a limitation upon any power necessary or appropriate to carry out the purposes and intent of this Article V. Sec. 22-155. Prohibited powers. A tourism improvement district shall have neither the power of eminent domain nor any police or regulatory powers. A tourism improvement district shall not have the power to incur bonded debt or similar indebtedness in any other form without the City Council’s prior written consent. However, a district may have the power to enter into contractual multiple-fiscal year debt or other financial obligations within the meaning of Article X, § 20(4)(b) of the Colorado Constitution, subject to the approval of the electors of the district or provided that the district’s payment of such debt or other financial obligations are subject to annual appropriation by the board. Sec. 22-156. How initiated. (a) Petition. Any proposal for the establishment of a tourism improvement district may be initiated by a petition filed with the City Clerk subject to the requirements in this section. (b) Contents of petition. Each petition shall include: (1) A description of the boundaries of the district, which may be coterminous with the boundaries of the entire City or a smaller geographical area encompassing only a portion of the City; (2) A listing and description of the total number of lodging businesses to be included within the district, the street address of each such lodging business, and the tax account and lodging license numbers maintained with the City for such lodging businesses; (3) Description of the type and kind of lodging businesses to be initially included in the district and the type and kind of future lodging businesses to be included in the district under § 22-160; (4) A general description of the tourism improvements and tourism services that the district intends to fund and provide; (5) The proposed taxes to be levied by the district, if approved by the electors of the district, any other proposed fees or assessments to be levied by the district, the proposed method by which any taxes, fees or assessments will be collected and disbursed, and the intended uses of any revenue derived from any tax, fee or assessment; (6) The proposed composition of the board, including the number of directors desired, which must be in accordance with § 22-164(a); -7- (7) The names of three (3) persons who shall represent the petitioners on matters relating to the petition and initial plan; (8) The initial plan of the district, containing the information specified in § 22-158; and (9) All signatures on petitions shall be accompanied by a self-affirmation substantially in the form provided in § 22-157(a). (c) Petition sections. A petition may consist of one (1) or more petition sections, all of which will be aggregated to determine whether the requirements of § 22-158 have been met. (d) Fee for petition. The City Manager may require, as provided in Article I of Chapter 7.5, for the payment of an administrative fee for the filing, review, approval and amendment of any petition and initial plan for a district. The City Manager may waive such fee upon a showing of good cause. Sec. 22-157. Self-affirmation; penalties. (a) The self-affirmation on a petition shall state: "I state, under penalty of law that to my knowledge and belief the facts stated in the petition are true, that my signature and name are as shown on this petition, and that I have signed this petition or have been duly authorized to sign this petition by the entity identified hereunder." (b) A self-affirmation on a petition shall not be valid after one (1) year has elapsed between the date of the self-affirmation as shown on the petition and the date the petition is filed with the City Clerk under § 22-158. (c) A self-affirmation shall be presumed valid unless competent evidence to the contrary is presented to and accepted by the City Manager, or the City Council determines otherwise. (d) If a person eligible to sign a petition is unable to make a signature, such person may affirm by making a mark on the self-affirmation, with or without assistance, witnessed by another person. (e) It shall be unlawful for any person knowingly to make a false statement on a self- affirmation on any petition filed under this Article V. A violation of this subsection (e) shall be a misdemeanor offense subject to the penalties in Code § 1-15(a). (f) It shall be unlawful for any person to, by use of force or any other means, unduly influence a person to sign a petition or to not sign a petition, falsely make, alter, forge or counterfeit any petition before or after it has been filed as provided in § 22-158 or to destroy, deface, mutilate or tamper with any petition before or after it has been filed as provided in § 22- 158. A violation of this subsection (f) shall be a misdemeanor offense subject to the penalties in Code § 1-15(a). -8- Sec. 22-158. Petition submittal and initial plan. In all cases in which a district is proposed pursuant to this Article V, the petition filed with the City Clerk under § 22-156 must be signed by authorized managers representing lodging businesses having at least fifty percent (50%) of the total rooms to be included in the district, and appended to the petition shall be an initial plan for the district which shall include, in addition to the information specified in § 22-156(b), the following information: (a) Name. The proposed name of the district, which must substantially follow the form "_____ Tourism Improvement District". (b) Purpose. The primary purpose or rationale for the district. (c) Location. A description and map of lodging businesses within the proposed district, providing sufficient specificity so an owner of a lodging business can reasonably determine whether their lodging business is within or outside of the district's boundaries. (d) Public participation. A summary of the process employed by petitioners to inform the eligible electors of the proposed district and of the efforts to organize the district in a manner that will allow the electors the opportunity to participate, and the results of such process. (e) Board. The proposed names of the board’s initial directors and a description of how future directors will be nominated for the City Council’s consideration of their appointment to the board. (f) Promotional plan. A summary of the promotional efforts, if any, that the district plans to undertake as part of its proposed tourism improvements and tourism services, the cost thereof, and the manner in which such promotional efforts will be administered. (g) Financial plan. A financial plan showing: (1) The type and rate of any tax, fee or assessment that will be levied for district purposes and how revenues derived from any tax, fee or assessment will be used over time; (2) Any anticipated multiple-fiscal year debt or other financial obligations and other contractual obligations anticipated to be incurred by the district; (3) The reasonably estimated costs of the tourism improvements and tourism services that will be funded by the district; and (4) A draft first year budget. (h) Term. The proposed term for the district, which may be either perpetual or for a limited term. If the term for the district is less than perpetual, the establishment ordinance shall include provisions for dissolution of the district at the end of the term or may include provisions -9- authorizing the term of the district to be extended. Whether the term is perpetual or for a limited term, the district may be dissolved at any time as authorized in § 22-166 or in other manner as provided in the establishment ordinance. (i) Conclusion. A request for City Council to approve the establishment of the district. Sec. 22-159. Boundaries of district. The boundaries of a district may be coterminous with the boundaries of the City, or may consist of a smaller geographical area encompassing only a portion of the City, if so provided in the petition and approved in the establishment ordinance, and such boundaries may consist of contiguous or noncontiguous tracts or parcels of land on which the lodging businesses listed in the petition are located. The boundaries of the district shall be described in the establishment ordinance. The boundaries of districts may overlap. Sec. 22-160. Inclusion or exclusion of lodging businesses after district is established. Unless an alternative procedure for future inclusion or exclusion of lodging businesses is provided in the petition for establishment of a tourism improvement district, the establishment ordinance for a district may provide for the automatic inclusion within the district of the future lodging businesses described in the petition under § 22-156(b)(3) upon the Financial Officer’s issuance of a lodging license to those lodging businesses and for the automatic exclusion from the district of any lodging business that ceases to exist after the district is established. In addition, if the boundaries of the district will be conterminous with the City’s boundaries, such future lodging businesses annexed into the City after the establishment of the district shall automatically be included within the district when the Financial Officer issues a lodging license to that lodging business. Sec. 22-161. Notice of petition. In all cases when a petition to organize a district has been filed with the City Clerk and the City Manager has determined the petition complies with the requirements of this Article V, the City Manager shall forward the petition to the City Council for its consideration of the proposed district’s establishment ordinance at a public hearing. The City Clerk shall give notice of the City Council’s hearing by publishing the notice once in a newspaper of general circulation in the City, by mailing it by first class mail to the lodging businesses proposed to be included in the district, and by posting it on the City’s website for at least thirty (30) days before the hearing. Said notice shall: (1) Generally describe the tourism improvements and tourism services that the district intends to undertake; (2) Generally describe the district boundaries and the lodging businesses within such boundaries; and -10- (3) Prominently state the place, date and time for the City Council hearing on the establishment of the proposed district, which hearing shall be held no fewer than twenty - one (21) days and no more than forty-two (42) days after the date of the mailing of notices. The petition representatives shall reimburse the City for its costs to publish and mail the notices. Sec. 22-162. Hearing on the petition. (a) At the time and place specified in the notice required by § 22-161, the City Council shall conduct a hearing to determine if the petition and initial plan satisfy the following criteria: (1) The petition has been circulated and signed in conformity with the applicable requirements of this Article V; and (2) The initial plan and the establishment of the district are in the best interest of the City. (b) The findings of City Council on its determination of the genuineness of the petition signatures, the sufficiency of the petition and its determination of the City’s best interest shall be final, conclusive and in the City Council’s sole discretion. Sec. 22-163. Establishment ordinance. (a) If the City Council determines that the petition and initial plan satisfy the criteria of § 22 - 162, the City Council shall adopt an establishment ordinance. (b) At a minimum, the establishment ordinance shall contain the following: (1) The City Council’s findings concerning the criteria in § 22-162; (2) Boundaries of the district; (3) Description of the type and kind of lodging businesses to be initially included in the district and the type and kind of future lodging businesses to be included in the district under § 22-160. (4) The powers and limits of power to be conferred on the district; (5) The number of directors, appointments of the initial directors and the initial terms of the initial directors, and a description of how future directors will be nominated for appointment by City Council; (6) The term of the district; (7) The other contents of the initial plan of the district as required by § 22-158; -11- (8) Any other provisions the City Council deems necessary to protect the interests of the City, its residents or those of the affected lodging businesses; and (9) A declaration by City Council that the district is duly established and organized. (c) If City Council adopts the establishment ordinance, such ordinance shall establish the district and approve the initial plan as presented unless the petition representatives consent at the hearing to the City Council modifying the initial plan. The City Council’s determinations by adoption of the establishment ordinance that the district is duly organized after notice duly given, or that a petition was or was not filed or was or was not duly subscribed and acknowledged as herein required, or that the evidence presented at the hearing was sufficient or insufficient to support the adoption of the establishment ordinance, shall be conclusive in every court or other tribunal. (d) If there is any conflict between the provisions of the initial plan and the establishment ordinance, the establishment ordinance shall control. Sec. 22-164. Board of directors. (a) Board of directors. As specified in the establishment ordinance, a district shall have a board of five (5) to nine (9) directors. The directors of the board shall be nominated in the manner stated in the petition, provided that any such nominees shall be subject to appointment by the City Council. The directors of the initial board shall be confirmed in the establishment ordinance with one-third, or as near to one-third as possible as determined by the City Council, of initial appointees to have a term of one (1) year, one-third of the appointees to have a term of two (2) years, and one-third of the appointees to have a term of three (3) years. All directors of the board shall be electors within the district. The terms of the initial directors on the board shall be deemed to have commenced on the effective date of the establishment ordinance. Upon the expiration of the initial terms, successor directors shall be appointed by the City Council by resolution for terms of three (3) years unless the appointee is being appointed to finish the term of a director who has left the board for any reason before the expiration of their term and, in such case, the appointee shall only be appointed to finish the term of the departed director. (b) Board serves at pleasure of the City Council. All directors on the board serve at the pleasure of the City Council and can be removed at any time by City Council with cause or removed without cause if a majority of the board votes to recommend the director’s removal. (c) Officers and duties. The board shall appoint a president, secretary, treasurer and such other officers as the board deems necessary, and the same board director may hold more than one (1) position except that president and secretary shall not be held by the same person. The secretary shall keep a record of all proceedings, minutes of meetings, certificates, contracts and corporate acts of the board. The district shall keep permanent records containing accurate -12- accounts of all money received by or disbursed on behalf of the district and shall make such annual or other reports to the City as it may require in the establishment ordinance. (d) Conflicts of interest. Each director of the board shall be subject to and comply with the conflicts of interest provisions in Charter Article IV, § 9. (e) Meetings and public records. All board meetings shall be conducted in compliance with the Colorado Open Meetings Law in Part 4 of Article 6 in Title 24 of the Colorado Revised Statutes. All district public records shall be open for public inspection as provided in the Colorado Open Records Act in Part 2 of Article 72 in Title 24 of the Colorado Revised Statutes. (f) Board action. The board shall act by resolution or motion. Sec. 22-165. Taxing authority; other district revenues. (a) A district shall exercise taxing authority and the authority to impose fees and assessments to the extent and in the manner provided for in the establishment ordinance for the district. (b) Procedures for the collection and disbursement of district tax revenue and other district revenue shall be as provided in the establishment ordinance. A district may contract with the City for collection and enforcement of district taxes, fees and assessments in a manner similar to the collection and enforcement of the lodging tax, as provided in the lodging tax ordinance. (c) No district tax or multiple-fiscal year debt or other financial obligation in which such taxes or other revenues of the district are pledged shall be imposed or incurred unless the electors of the district have approved the tax or multiple-fiscal year debt or other financial obligation in an election conducted in compliance with Article X, § 20 of the Colorado Constitution. Sec. 22-166. Annual plan and operating budget. The board of any tourism improvement district shall, by September 30 of each year, file with the City Clerk a budget and annual plan for the ensuing year. District’s shall operate on a calendar fiscal year. The annual plan and budget shall be subject to the City Council’s approval each year in a manner similar to the way the operating plans and budgets of business improvement districts are approved under C.R.S. § 31-25-1211. The annual plan and budget may, from time to time, be amended by the district with the approval of the City Council in substantially the same manner as the process for formulating the annual plan and operating budget for each year. Sec. 22-167. Correction of faulty notices. In any case where it is found that a notice provided for in this Article V was not given or insufficient in any way, the City Council, City Manager, City Clerk or board, as applicable, shall not thereby lose jurisdiction, and the proceeding in question shall not thereby be void or abated. The City Council, City Manager, City Clerk or board, as applicable, shall order due notice be given and shall continue the proceeding until such time as notice is properly given and thereupon shall proceed as though notice had been properly given in the first instance. -13- Sec. 22-168. Dissolution of a district. (a) Initiation by City Manager. Once established, a district shall not be dissolved except when a provision for automatic dissolution on a date certain or upon the happening of an event is provided in the establishment ordinance, the establishment ordinance provides a different manner for dissolution or by a request made by the City Manager to the City Council for a dissolution ordinance as provided in this section. (b) Contents of request for dissolution. A request for dissolution shall state: (1) Name of the district; (2) A description of the district’s current boundaries; (3) A description of the lodging businesses within the district; (4) A description of the tourism improvements and tourism services being furnished by the district; (5) A statement whether district’s tourism improvements and tourism services will continue to be provided after dissolution and, if so, the plan for their continued provision; (6) A description of the district’s plan, if any, for the disposition of its real and personal property; and (7) A finding by the City Manager that dissolution is in the best interests of the City and the district and the City Manager’s statement that one or more of the following has occurred: (i) a misappropriation of funds, malfeasance, misfeasance, nonfeasance or violation of the law in connection with the management of the district; (ii) the district has failed for two consecutive years to timely file its annual plan and budget as required in § 22-166; or (iii) a petition requesting dissolution of the district signed by the electors in the district who represent at least fifty percent (50%) of the total rooms then existing in the district has been filed with the City Clerk and the signatures on the petition are accompanied by a self-affirmation substantially in the form provided in § 22-157(a), the petition includes the information required in subsections (b)(1) through (b)(5) above, and it states that all the district’s contracts and legal obligations have been fulfilled. (c) Winding up of district. A district shall not be dissolved until all its contracts and legal obligations have been fulfilled and the plan for the district’s disposition of its real and personal property has been completed. (d) Notice and hearing. Unless automatic dissolution of the district on a date certain is provided in the establishment ordinance, no dissolution shall occur except by an ordinance adopted by the City Council following a public hearing called after notice of the hearing is given in the same manner as provided in § 22-161 for the hearing on the establishment ordinance, -14- except the notice shall describe the tourism improvements and tourism services that the district intends to discontinue providing and describe any plan for continued provision of such improvements and services. Sec. 22-169. Limitations of actions. No action or proceeding, at law or in equity, to review any acts or proceedings, or to question the validity or enjoin the performance of any act, or the levy or collection of any tax for a district, or for any other relief against any acts or proceedings done or had under this Article V, whether based upon a claim of illegalities, irregularities or jurisdictional defects, shall be maintained unless commenced within thirty (30) days after the performance of the act complained of or else such proceeding shall be thereafter perpetually barred. Sec. 22-170. Liberal construction. This Article V, being necessary to secure the public health, safety, welfare, and convenience, shall be liberally construed to affect its purposes within the parameters of the Charter and the City’s home rule authority. Sec. 22-171. Substantial compliance. Substantial compliance with this Article V shall be all that is required in determining the validity of any petition or the performance of any duty hereunder. Sec. 22-172. Prior City bonds and other City obligations. Nothing herein shall be deemed or construed in any manner that impairs the right s of the owners or holders of any City bonds or other City obligations. In the event of any such impairment, the section, clause, phrase or word of this Article V causing such impairment shall be deemed severed from this Article V to avoid the impairment. Sec. 22-172. Compliance with all City standards. Tourism improvement districts established under this Article V shall be subject to and must comply with all applicable provisions in the Charter and Code and in all City ordinances, resolutions, regulations, standards and plans, except as may be expressly provided in the establishment ordinance, but such exception shall not apply to applicable Charter provisions. Introduced, considered favorably on first reading, and ordered published this 23rd day of March, A.D. 2021, and to be presented for final passage on the 20th day of April, A.D. 2021. __________________________________ Mayor ATTEST: -15- _____________________________ City Clerk Passed and adopted on final reading on this 20th day of April, A.D. 2021. __________________________________ Mayor ATTEST: _____________________________ City Clerk