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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 07/20/2021 - FIRST READING OF ORDINANCE NO. 097, 2021, ESTABLISAgenda Item 15 Item # 15 Page 1 AGENDA ITEM SUMMARY July 20, 2021 City Council STAFF Clay Frickey, Redevelopment Program Manager John Duval, Legal SUBJECT First Reading of Ordinance No. 097, 2021, Establishing the Fort Collins Tourism Improvement District. EXECUTIVE SUMMARY The purpose of this item is for Council to consider establishing the Fort Collins Tourism Improvement District (District). The District’s purpose is , “…to operate as a [tourism improvement district] charging fees to the lodging businesses included within the District to fund and provide specific tourism services and improvements for the benefit of the feepayers’ lodging businesses. These services and improvements will be primarily used to increase room night sales for those lodging businesses.” Council will hold a public hearing at second reading for the District on August 4, 2021, if this Ordinance passes on first reading. The petition submitted for establishing the District meets the requirements outlined in Article V of Chapter 22 of the City Code. 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” (T ID) in Fort Collins to supplement hotel revenues. An additional revenue stream for hotels became more important during the COVID -19 pandemic. The VFC Board of Directors approved moving forward with a feasibility study to determine if a TID was an option for Fort Collins. VFC hired Civitas to conduct the TID Feasibility Study. The Feasibility Study found that Colorado law permit s TIDs and that Fort Collins may create its own local ordinance permitting the formation of business -based TIDs. The VFC Board of Directors considered and approved a formal proposal to move forward with the formation of business-based TIDs. This led to Civitas and VFC approaching the City to begin formal exploration of having Council adopt a local ordinance to allow for the formation of TIDs in Fort Collins. Civitas and VFC presented an update on the Tourism and Destination Master Plan and the idea of allowing for the formation of TIDs at Council’s work session on February 23, 2021. Council unanimously supported further exploration of the adoption of a local ordinance permitting business- based TIDs. On April 20, 2021, Council enacted a new Article V in City Code Chapter 22 (TID Ordinance) to permit the establishment of TIDs. This new article permits the formation of a TID based on typ e of business. This differs from a typical Business Improvement District (BID) where businesses form a district based off a shared geography. A TID may also overlap with other improvement districts unlike a BID. Agenda Item 15 Item # 15 Page 2 PETITION PROCESS The TID Ordinance outline s the requirements to form a TID. To form a TID, the proponents for the TID must file a petition the City Clerk. This petition must contain several elements as outlined in the TID Ordinance. The petition submitted by VFC and the other proponents meets the requirements of Article V by: 1. Describing the boundaries of the District; 2. Listing the total number of lodging businesses to be included in the District along with their address, tax account, and lodging license numbers; 3. Describing the lodging businesses initially included in the District and the kind of future lodging businesses to be included in the district; 4. General describing the tourism improvements and services the District intends to fund and provide ; 5. Describing the proposed fee to be levied by the District and how these fees will be collected and disbursed; 6. Describing the intended uses of revenues derived from the District’s fee ; 7. Proposing the composition of the District’s board of directors and the initial directors proposed for appointment by the Council; 8. Naming the three persons that represent the petitioner s on matters related to the petition and initial plan; and 9. The initial plan of the District. The petition filed with the City Clerk must also be signed by authorized ma nagers representing the lodging businesses having at least fifty percent (50%) of the total rooms to be included in the TID. The petition submitted for the District has been signed by the authorized managers representing 78.6% of the total rooms to be included in the District. As required by the TID Ordinance, the City Manager has reviewed the petition and determined it complies with all applicable requirements of the TID Ordinance. As also required by the TID Ordinance, the City Clerk has provided writ ten notice of Council’s public hearing for this Ordinance that will be held on second reading on August 4, 2021. This notice was published on June 30, 2021 in the Coloradoan, mailed on June 30, 2021 to all the lodging businesses proposed to be included in the District, and posted on the City’s website on June 30, 2021. INITIAL PLAN OVERVIEW The District’s initial plan (Initial Plan) included with the petition contains the elements required by the TID Ordinance. What follows is a summary of various elements of the Initial Plan. • Purpose of the District Visit Fort Collins (VFC) and certain Fort Collins lodging businesses propose the District. Its purpose is to operate as a TID charging fees to the lodging businesses included within the District to fund and provide specific tourism services and improvements for the benefit of the feepayers’ lodging businesses. The District will use these services and improvements to increase room night sales for those lodging businesses. • District Boundaries The District proposes a boundary coterminous with City limits. This means that as new hotels annex into the City, they also join the District once the Financial Officer of the City issues the hotel a lodging license. • Initial Term of District The District will have an initial term of ten years and four months beginning on September 1, 2021 and ending on December 31, 2031. This will allow for the lodging businesses within the District to evaluate the District’s effectiveness at the end of the initial term. If the District is deemed successful, the District’s board of directors (Board) can then request the Council to renew the District by ordinance to continue in existence after the initial term expires. If the District is not considered to be Agenda Item 15 Item # 15 Page 3 successful and the District is not renewed by Council, the District will be deemed dissolved at the end of the initial term. • Promotional Plan The District will fund the following services and improvements developed and prioritized by the lodging businesses proposing the establishment of the District. o Sales, Marketing, and Communications: A sales, marketing, and communications program will promote assessed lodging businesses as tourist, meeting, and event destinations. The sales, marketing, and communications program will have a central theme of promoting the destination as a desirable place for overnight visits. o Destination Development: Destination development projects will be designed to improve the visitor experience to increase overnight visitation at assessed lodging businesses. A s the total number of rooms sold and room prices increase over time, the amount of available funds for projects will increase. Working collaboratively with the City, the District Board will develop specific funding criteria. The City and VFC staff shall have equal input to make recommendations for final project approval. o Administration and Operations: The administration and operations portion of the budget shall be utilized for administrative staffing costs, office costs, advocacy, and other general adminis trative costs such as insurance, legal, and accounting fees. In the first year of the District’s operations, the District proposes investing resources to undertake the following programs and goals: 1. Support sales development opportunities, which may inc lude hiring a salesperson, prospecting tools or specific marketing activities/programs designed to bring business to Fort Collins; 2. Determine bid incentive funding levels and direction for enhanced sales activities; and 3. Explore additional advertising, promotional or public relations options and if appropriate, the course of action for investing. • Financial Plan The District will assess a fee that will be 3% of a lodging business’s “lodging price” as this term is defined in City Code Section 25-241. However, the fee will not be collected on those transactions that are exempt from the City’s lodging tax as provided in City Code Section 25 -243. Fee revenue will only be used to fund destination sales, marketing, communication, and destination development program s, and related administration. The District proposes to collect the fee by entering into an intergovernmental agreement with the City under which the City would collect the fee in the same manner that it collects its lodging tax under its Lodging Tax Ordinance. Under such agreement, the City would be responsible for collecting the fee (including any delinquencies, penalties and interest) from each assessed lodging business within the District and the City would remit such fees to the District no later than the end of the month following the month the fees were collected by the City. This intergovernmental agreement is proposed to be presented to Council for consideration and resolution approval at the August 4, 2021, second reading of this Ordinance. The District proposes the following budget for its Initial Plan. The District would retain $36,000 in reserves by the end of 2022. Budget Category August 2021 - December 2021 January 2022 - December 2022 Revenue $400,000 $800,000 Administrative and General Expense $80,000 $160,000 Sales, Marketing and Communications $240,000 $480,000 Destination Development $60,000 $120,000 Reserves $12,000 $24,000 Agenda Item 15 Item # 15 Page 4 City Collection Fee $8,000 $16,000 Total Expenses $400,000 $800,000 District Governance The Initial Plan proposes a five-member Board along with a series of qualifications for potential Board members. These qualifications for Board members are: 1. Three directors must be affiliated with a large, full-service lodging business. 2. One director must be affiliated with a small, limited-service lodging business. 3. One director must be affiliated with a boutique or specialty lodging business. The Initial Plan proposes Council’s appointment of the initial Board members with staggered terms. The term of each Board member starts on September 1, 2021. Board Member Affiliation Rationale for Inclusion on Board Initial Term: 1, 2, and 3 years Daniel Benton Fort Collins Hilton Full-service 1 year Danielle Lowry Hampton Inn Limited-service 2 years Dragan Andrejic The Elizabeth Full-service 2 years George Prine The Armstrong Boutique/Specialty 3 years Sandra Fredrickson Fort Collins Marriott Full-service 1 year DISTRICT FORMATION PROCESS Key dates related to the formation of the District are outlined as follows: June 30, 2021 Published notice of August 4th Public Hearing in Coloradoan July 14, 2021 Petition submitted to City Clerk July 20, 2021 First Reading of establishment ordinance August 4, 2021 Second Reading and Public Hearing for District establishment ordinance PUBLIC OUTREACH The VFC has conducted significant outreach with the lodging businesses proposed to be included in the District. ATTACHMENTS 1. District's Petition (PDF) 2. Signed Petitions for Approval (PDF) 3. Hotel Check List and Room Count (PDF) 4. Powerpoint Presentation (PDF) PETITION TO THE CITY OF FORT COLLINS TO ESTABLISH THE FORT COLLINS TOURISM IMPROVEMENT DISTRICT We petition the City of Fort Collins, Colorado, (City) to initiate proceedings to establish a tourism improvement district in accordance with Article V in Chapter 22 of the City Code for the purpose of providing tourism services and improvements as described in the Summary of the Initial Plan attached as Exhibit A, the proposed Initial Plan attached as Exhibit B with the initial boundaries of the District to be as shown in attached Exhibit C. In addition, attached as Exhibit D is 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. Lodging Business Number of Rooms* Business Owner *Assessed lodging business owners shall be responsible for self-reporting the total number of rooms in each respective assessed lodging business. 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. Owner /Owner Representative Name (printed) Title Owner/Owner Representative Signature Date ATTACHMENT 1 Exhibit A - Summary of Initial Plan District Name: The proposed name of this tourism improvement district shall be the “Fort Collins Tourism Improvement District” (District). Boundaries: The District’s boundaries shall be coterminous with the boundaries of the City of Fort Collins, the current boundaries of which are shown on the map attached as Exhibit B. Future lodging businesses annexed into the City after the establishment of the District shall automatically be included within the District’s boundaries when the City’s Financial Officer issues a lodging license to that lodging business. Businesses: The District will initially consist of twenty-three (23) lodging businesses. “Lodging business” shall mean any “lodging provider,” as this term is defined in City Code Section 25-241, that is now or hereafter located within the District’s boundaries and that is required to obtain from the City a lodging license and to pay the City’s lodging tax as provided in Article IV, Chapter 25 of the City Code (Lodging Tax Ordinance), but shall only include those lodging providers that engage in the business of furnishing a room or other accommodation in a hotel, motel, inn, bed and breakfast residence, apartment hotel, lodging house, motor hotel or similar lodging establishment and that has three (3) or more rooms at its location to be so furnished for a period of less than thirty (30) consecutive days under any lease, rental, concession, permit, right of access, license or other agreement. However, a “lodging business” shall not include a “short term non- primary rental” or a “short term primary rental” as these terms are defined in City Code Section 15-641. A list containing the street address of each assessed lodging business, and the tax account and their respective lodging license numbers maintained with the City of Fort Collins, is included herein as Exhibit C. Services: The District is designed to provide specific benefits directly to the District’s feepayers by increasing awareness and demand for room night sales. Sales, marketing, & communications and destination development programs will increase demand for overnight tourism and market payors as tourist, meeting and event destinations, thereby increasing demand for room night sales. Fee Levy: The District will assess a fee that will be three percent (3%) of a lodging business’s “lodging price” as this term is defined in City Code Section 25-241. However, the fee will not be collected on those transactions that are exempt from the City’s lodging tax as provided in City Code Section 25-243. Fee revenue will only be used to fund destination sales, marketing, communication, and destination development programs, and related administration. Collection: The District proposes to collect the fee by entering into an intergovernmental agreement with the City under which the City would collect the fee in a manner similar to how the City collects its lodging tax under its Lodging Tax Ordinance. Under such agreement, the City would be responsible for collecting the fee (including any delinquencies, penalties and interest) from each assessed lodging business within the District and the City would remit such fees to the District no later than the end of the month following the month the fees were collected by the City. Budget: The total District annual fee budget for the initial year of its operation is anticipated to be approximately $800,000. A similar budget is expected to apply to subsequent years, but this budget is expected to fluctuate as room sales do. Governance: The City’s ordinance authorizing the establishment of the tourism improvement districts requires the District to a have a governing board consisting of an odd number of directors of no fewer than five (5) directors and no more than nine (9) directors. All directors on the board must be qualified electors of the District. The board is proposed to have The board is proposed to have five (5) directors who are electors of the District having the following additional qualifications: (i) three (3) directors must be affiliated with a large, full-service lodging business; (ii) one (1) directors must be affiliated with a small, limited- service lodging businesses; (iii) one (1) directors must be affiliated with a boutique or specialty lodging business; and (iv) the remaining directors may be affiliated with any type of lodging business. The District Board must provide an annual operating budget and annual plan outlining the District's revenues, expenditures, projects and goals to the City, which must be approved annually by the City Council. The annual budget and plan will also be available to the lodging businesses. Representatives: Visit Fort Collins representatives Cynthia Eichler, Erik Barstow, and Katy Schneider shall serve as petitioner representatives, who shall represent the petitioners on matters relating to the petition and initial plan. Duration: The District will have an initial term of ten (10) years and four (4) months beginning on September 1, 2021 and ending on December 31, 2031. This will allow for the lodging businesses within the District to evaluate the District’s effectiveness at the end of the initial term. If the District is deemed successful, the District’s Board can then request the City Council to renew the District by ordinance to continue in existence after the initial term expires. If the District is not considered to be successful and the District is not renewed by the City Council, the District will be deemed dissolved at the end of the initial term. Management: The District expects to work with Visit Fort Collins to deliver its services and hire staff. Exhibit B – Initial Plan Fort Collins Tourism Improvement District Initial Plan I. DISTRICT’S NAME The proposed name of this tourism improvement district shall be the “Fort Collins Tourism Improvement District” (District). II. LEGAL AUTHORITY The District is to be organized and established as a tourism improvement district (TID) as authorized in Article V of Chapter 22 of the Code of the City of Fort Collins (TID Ordinance) to fund and provide certain tourism services and improvements for the benefit of the lodging businesses included within the District. III. PURPOSE OF THE DISTRICT The District is being proposed by Visit Fort Collins (VFC) and certain Fort Collins lodging businesses and its purpose is to operate as a TID charging fees to the lodging businesses included within the District in order to fund and provide specific tourism services and improvements for the benefit of the feepayers’ lodging businesses. These services and improvements will be primarily used to increase room night sales for those lodging businesses. IV. HISTORY AND PURPOSE OF TIDs TIDs are an evolution of the traditional business improvement district. The first TID was formed in West Hollywood, California in 1989. Since then, over 170 United States destinations have followed suit. This includes many states that have adopted the California model. For example, Montana, South Dakota, Washi ngton, Texas and Louisiana have adopted TID laws, as well as municipalities in Colorado. TIDs nation-wide collectively raise over $400 million annually for local destination marketing. With competitors raising their budgets, and increasing rivalry for visitor dollars, it is important that Fort Collins lodging businesses invest in stable, lodging-specific marketing programs. TIDs utilize the efficiencies of private sector operation in the market-based promotion of tourism, and allow lodging business owners to organize their efforts to increase room night sales. Participating Fort Collins lodging business owners within the TIDs will pay a fee and those funds will be used to provide services and improvements that increase room night sales. There are many benefits to forming a TID that charges a fee to the lodging businesses within it: • Fee revenues must be spent on services and improvements that provide a specific benefit only to the feepayers; • Fee revenues cannot be diverted to general government programs; • They are customized to fit the needs of feepayers in each destination; • They allow for a wide range of services; • They are designed, created and governed by those who will pay the fee; and • They provide a stable, long-term funding source for tourism promotion. V. THE DISTRICT’S BOUNDARIES The District’s boundaries shall be coterminous with the boundaries of the City of Fort Collins (City), the current boundaries of which are shown on the map attached as EXHIBIT C. “Lodging business” shall mean any “lodging provider,” as this term is defined in City Code Section 25-241, that is now or hereafter located within the District’s boundaries and that is required to obtain from the City a lodging license and to pay the City’s lodging tax as provided in Article IV, Chapter 25 of the City Code (Lodging Tax Ordinance), but shall only include those lodging providers that engage in the business of furnishing a room or other accommodation in a hotel, motel, inn, bed and breakfast residence, apartment hotel, lodging house, motor hotel or similar lodging establishment and that has three (3) or more rooms at its location to be so furnished for a period of less than thirty (30) consecutive days under any lease, rental, concession, permit, right of access, license or other agreement. However, a “lodging business” shall not include a “short term non-primary rental” or a “short term primary rental” as these terms are defined in City Code Section 15-641. The District’s boundaries shall remain conterminous with the City’s boundaries. Therefore, future lodging businesses annexed into the City after the establishment of the District shall automatically be included within the District’s boundaries when the City’s Financial Officer issues a lodging license to that lodging business. The District will initially consist of twenty-three (23) lodging businesses. VI. DISTRICT’S INITIAL TERM The District will have an initial term of ten (10) years and four (4) months beginning on September 1, 2021 and ending on December 31, 2031. This will allow for the lodging businesses within the District to evaluate the District’s effectiveness at the end of the initial term. If the District is deemed successful, the District’s Board can then request the City Council to renew the District by ordinance to continue in existence after the initial term expires. If the District is not considered to be successful and the District is not renewed by the City Council, the District will be deemed dissolved at the end of the initial term. VII. PUBLIC PARTICIPATION VFC and the lodging businesses proposing the District have been conducting public outreach to the other affected lodging businesses, including one on one meetings and group meetings with all lodging businesses proposed to be included in the District and subject to the fee to provide them with consistent updates on the process to establishment of the District. To ensure accessibility for such lodging businesses, a Dropbox will be provided to easily submit their signed petitions, view this Initial Plan, and obtain other informational resources regarding the District. VIII. DISTRICT’S PROMOTIONAL PLAN The specific tourism services and improvements that the District will fund have been developed and prioritized by the lodging businesses proposing the establishment of the District. A summary for each of the Districts proposed programs is included below: • Sales, Marketing, & Communications: A sales, marketing, & communications program will promote assessed lodging businesses as tourist, meeting, and event destinations. The sales, marketing, & communications program will have a central theme of promoting the destination as a desirable place for overnight visits. The program will have the goal of increasing overnight visitation and room night sales at assessed lodging businesses, and may include the following activities, but are not limited to: - Internet marketing efforts to increase awareness and optimize internet presence to drive overnight visitation and room sales to assessed lodging businesses; - Print ads in magazines and newspapers, television ads, and radio ads targeted at potential visitors to drive overnight visitation and room sales to assessed lodging businesses; - Building the Fort Collins branding to attract overnight visitation to the District; - Potential attendance of trade shows to promote assessed lodging businesses; - Bids and fees associated with special events, including but not limited to sporting and music events and museum exhibits, to attract overnight visitors; - A city-wide special-event transportation program, connecting assessed lodging businesses with downtown and other attractions, to increase demand for room night sales; - Sales blitzes for assessed lodging businesses; - Familiarization tours of assessed lodging businesses; - Preparation and production of collateral promotional materials such as brochures, flyers and maps featuring assessed lodging businesses; - Attendance of professional industry conferences and affiliation events to promote assessed lodging businesses; - Lead generation activities designed to attract tourists and group events to assessed lodging businesses; - Increased efforts focused on stimulating visitation to the District during the off-peak tourist season; - Director of Sales and General Manager meetings to plan and coordinate tourism promotion efforts for assessed lodging businesses; - Pursue hiring of additional sales staff to explore prospective marketing and sales development opportunities; - Education of hospitality staff on service and safety (related to alcohol and food) designed to create a visitor experience that will bring repeat visits to assessed lodging businesses; and - Education of lodging business management and the FCTID Board on marketing strategies best suited to meet assessed lodging businesses’ needs. • Destination Development: Destination development projects will be designed to improve the visitor experience in an effort to increase overnight visitation at assessed lodging businesses. As the total number of rooms sold and room prices increases over time, the amount of available funds for projects will increase. Working collaboratively with the City, the District Board will develop specific funding criteria. The City and VFC staff shall have equal input to make recommendations for final project approval. Policies and procedures acceptable to both the District Board and VFC will be developed. Projects may include, but are not limited to: - Comprehensive and integrated wayfinding signage system including signage to parking decks and lots; - A city-wide special-event transportation program, connecting assessed lodging businesses with downtown and other attractions, to increase demand for room night sales; - Conducting research studies to determine the feasibility of building proposed meeting spaces; - Art and cultural projects, to attract overnight visitors; - Gateway enhancements, to attract overnight visitors; - Enhancements to environmental experiences, which attract overnight visitors, that expose visitors to the value of the vital ecosystems; - Improvements to existing parks and sports facilities utilized by overnight visitors; - Safe and fun entertainment complex for young teens and adults utilized by overnight visitors; - Live music venue which attracts overnight visitors; - Bids and fees associated with special events, including but not limited to sporting and music events and museum exhibits, to attract overnight visitors; - Infrastructure improvements that enhance Fort Collins’ competitive position to attract desirable special events year around and attract overnight visitors; and - Improvements to the City’s downtown parking deck that make the overnight visitor experience more desirable. • Administration and Operations: The administration and operations portion of the budget shall be utilized for administrative staffing costs, office costs, advocacy, and other general administrative costs such as insurance, legal, and accounting fees. • Collection Fee: Under any intergovernmental agreement with the City of Fort Collins for it to collect the District’s fees, the City shall be paid a fee equal to at least two percent (2%) of the amount of the fee collected to cover its costs of collection and administration. • Contingency / Reserve / Renewal: The budget includes a contingency line item to account for lower than anticipated fees. If there are contingency funds collected, they may be held in a reserve fund or utilized for other program, administration or renewal costs at the discretion of the District Board. Policies relating to contributions to the reserve fund, the target amount of the reserve fund, and expenditure of monies from the reserve fund shall be set by the District Board. Contingency/reserve funds may be spent on District programs or administrative and renewal costs in such proportions as determined by the District Board. The reserve fund may be used for the costs of renewing the District. In the first year of the District’s operations, it is proposed that the District would invest resources to undertake the following five key programs and goals: 1. Support sales development opportunities, which may include hiring a salesperson, prospecting tools or specific marketing activities/programs designed to bring business to Fort Collins; 2. Determine bid incentive funding levels and direction for enhanced sales activities; and 3. Explore additional advertising, promotional or public relations options and if appropriate, the course of action for investing. Bringing in revenue and contributions in addition to the District’s fees will increase impact and help the organization to best leverage investments into Fort Collins. To that end, the District will work with VFC to maintain current funding from the City of Fort Collins, as well as grants, donations, sponsorships, memberships, fee-for-service projects, crowdsourcing and partnerships on top of the District’s fees, for destination sales, marketing, communication, and destination development programs. The District Board, with City Council approval as required in City Code Section 22-166, will determine the annual operating budget each year of the District’s operations, based upon the priorities set out in this Initial Plan. IX. DISTRICT’S FINANCIAL PLAN FEE ASSESSMENT The District will assess a fee that will be three percent (3%) of a lodging business’s “lodging price” as this term is defined in City Code Section 25-241. However, the fee will not be collected on those transactions that are exempt from the City’s lodging tax as provided in City Code Section 25 -243. Fee revenue will only be used to fund destination sales, marketing, communication, and destination development programs, and related administration. The District proposes to collect the fee by entering into an intergovernmental agreement with the City under which the City would collect the fee in a manner similar to how the City collects its lodging tax under its Lodging Tax Ordinance. Under such agreement, the City would be responsible for collecting the fee (including any delinquencies, penalties and interest) from each assessed lodging business within the District and the City would remit such fees to the District no later than the end of the month following the month the fees were collected by the City. FINANCIAL AND CONTRACTUAL OBLIGATIONS As allowed by law, the District may enter into multiple-fiscal year debt and other financial obligations only if the District is authorized to do so by its initial plan, budget and its voters in a future election. The election must comply with all applicable state requirements, including Article X, Section 20 of the Colorado Constitution (the TABOR Amendment), and would limit the amount of multiple-fiscal year debt and other financial obligations that may be issued by the District to no more than the amount that is approved by the District’s voters. There are no anticipated multiple-fiscal year debt or other financial obligations anticipated to be incurred by the District. However, the District intends to exercise the power authorized in City Code Section 22-155 to enter into multiple-fiscal year debt or other financial obligations that are subject to annual appropriation by the District Board. ESTIMATED COSTS & INITIAL 16-MONTH BUDGET The following chart depicts the anticipated budget for the first sixteen months of the District’s operations. Budget Category Sub-Category Line Detail September 2021 – December 2021 January 2022 – December 2022 41000 · FCTID Revenue $320,000.00 $800,000.00 Other Income $- $- $320,000.00 $800,000.00 61000 · Employee Expense 61010 · Salaries/Wages 61012 · Wages $19,912.00 $85,218.00 62023 · Employee Parking $48.00 $360.00 Total 61010 · Salaries/Wages $19,960.00 $85,578.00 Sales, Marketing and Communications, 60% Destination Development, 15% Administration and Operations, 20% Contingency/Reserve, 3% City Collection Fee, 2% September 2021 -December 2022 Budget 61020 · Payroll Related 61022 · Payroll Taxes $1,840.00 $6,960.00 61024 · Unemployment Taxes $180.00 $682.00 61026 · Workers Compensation $800.00 $2,000.00 61028 · Employee Insurance $4,800.00 $18,000.00 61031 · Employee Benefits $1,200.00 $6,000.00 Total 61020 · Payroll Related $8,820.00 $33,642.00 Total 61000 · Employee Expense $28,780.00 $119,220.00 62000 · Administrative and General Administrative 62002 · Accounting $2,000.00 $6,000.00 62006 · Bank Charges $320.00 $1,200.00 62008 · Legal $10,000.00 $18,000.00 62025 · Supplies $320.00 $1,200.00 Total Administrative $12,640.00 $26,400.00 Office Rent Office Rent $1,140.00 $5,880.00 62070 · Telephone 62078 · Telephone - Cellular $1,920.00 $2,400.00 Total 62070 · Telephone $1,920.00 $2,400.00 62080 · Equipment/Computer Lease 62081 · Office Equipment Lease/Rental $- $- 62084 · Office Furniture $2,000.00 $- 62085 · Computer Software Purchase $480.00 $600.00 62086 · Computer Equipment $3,200.00 $4,000.00 62087 · Maintenance $1,200.00 $1,500.00 Total 62080 · Equipment/Computer Lease $6,880.00 $6,100.00 62099 · Miscellaneous $- $- Total 62000 · Administrative and General $64,000.00 $160,000.00 Sales Expense 78015 · Trade Shows $4,840.00 $16,550.00 73007 · Lead Generation $15,920.00 $27,900.00 73000 · Sales Activities $3,456.00 $4,000.00 73000 · Bid Activities $11,200.00 $60,000.00 73000 · Local Champions Program $48,000.00 $60,000.00 73000 · Research $12,000.00 $60,000.00 78015 · Travel $4,000.00 $9,550.00 Total Sales Expense $99,416.00 $238,000.00 Marketing 62004 · Advertising 80000 · Digital $18,400.00 $78,000.00 62005 · Promotions $2,744.00 $- 62004 · Advertising $32,000.00 $44,000.00 Total 62004 · Advertising $53,144.00 $122,000.00 62003 · Web/Internet Expenses 80030 · Website Service $9,920.00 $28,584.00 Total 62003 · Web/Internet Expenses $9,920.00 $28,584.00 62028 · Graphics 80040 · Graphic Arts $9,600.00 $27,500.00 Total 62028 · Graphics $9,600.00 $27,500.00 Public Relations 80070 · Agency Fees $3,600.00 $5,500.00 80080 · FAM Trips $4,800.00 $7,500.00 80090 · Media Events $4,800.00 $14,500.00 Total Public Relations $13,200.00 $27,500.00 International Marketing 81000 · Trade Shows $0.00 $3,000.00 81110 · Promotions $0.00 $- Total International Marketing $0.00 $3,000.00 Total Marketing $79,144.00 $208,584.00 Visitor Services DVIC Visitor Service Expense 62022 · Rent $2,400.00 $12,000.00 83020 · DVIC Supplies $240.00 $1,016.00 83010 · DVIC Volunteer Enhancement $600.00 $3,000.00 83017 · DVIC Staffing $3,120.00 $15,600.00 83015 · DVIC Janitorial $360.00 $1,800.00 Total DVIC Expense $6,720.00 $33,416.00 Total Visitor Services $6,720.00 $33,416.00 Total Sales, Marketing and Communications $192,000.00 $480,000.00 Destination Development 82015 · Initiatives $46,740.00 $116,400.00 82060 · Supplies $0.00 $- 82050 · CTA Program Fees $1,260.00 $3,600.00 82020 · Promotional Items $0.00 $- Total Destination Development $48,000.00 $120,000.00 Reserves 62009 · Reserves $9,600.00 $24,000.00 Total Reserves $9,600.00 $24,000.00 City Collection Fee 7100 · City Collection Fee $6,400.00 $16,000.00 Total City Collection Fee $6,400.00 $16,000.00 Total Expense $320,000.00 $800,000.00 Net Ordinary Income ($320,000.00) $(800,000.00) Net Income ($320,000.00) $(800,000.00) X. PENALTIES AND INTEREST The penalties and interest charged for any deficiency in the payment of the District fee shall be the same as provided in Sections 25-265 and 25-266 of the Lodging Tax Ordinance. Therefore, if the deficiency is due to negligence, but without the intent to defraud, there shall be added as a penalty ten (10) percent of the total amount of the deficiency. Interest in such case shall be collected at the rate of one (1) percent per month on the amount of such deficiency from the time the return was due from the person required to file the return until paid, which additional amount and interest shall become due and payable within twenty-one (21) days after written notice of determination, fee and demand for payment is issued. However, if any part of the deficiency in the payment of the lodging tax is due to the intent by the taxpayer to evade the tax, then there shall be added as a penalty fifty (50) percent of the total amount of the deficiency, and in such case the whole amount of the tax unpaid, including this addition and an additional one (1) percent per month of interest on such amount shall be added from the date the return was due until paid. This additional amount and interest shall become due and payable within twenty-one (21) days after written notice of determination, assessment and demand for payment is issued. XI. TIME AND MANNER FOR COLLECTING FEES The District’s fee will be implemented beginning September 1, 2021 and will continue for ten (10) years and four (4) months through December 31, 2031. If the City Council authorizes the City to do so, the City will be responsible for collecting the fee (including any delinquencies, penalties and interest) from each lodging business. In such event, lodging businesses shall remit the fee each month to the City in substantially the same manner as the business remits the lodging tax to the City. XII. DISTRICT GOVERNANCE The TID Ordinance requires the District to a have a governing board consisting of an odd number of directors of no fewer than five (5) directors and no more than nine (9) directors. All directors on the board must be qualified electors of the District. The board is proposed to have five (5) directors who are electors of the District having the following additional qualifications: (i) three (3) directors must be affiliated with a large, full-service lodging business; (ii) one (1) director must be affiliated with a small, limited-service lodging businesses; (iii) one (1) director must be affiliated with a boutique or specialty lodging business; and (iv) the remaining directors may be affiliated with any type of lodging business. The following persons are recommended to be appointed as the District’s initial directors on its board to serve the staggered terms indicated below as required by City Code Section 22-164: Board Member Affiliation Rationale for Inclusion on Board Initial Term: 1, 2, and 3 years Daniel Benton Fort Collins Hilton Full-service 1 year Danielle Lowry Hampton Inn Limited-service 2 years Dragan Andrejic The Elizabeth Full-service 2 years George Prine The Armstrong Boutique/Specialty 3 years Sandra Fredrickson Fort Collins Marriott Full-service 1 year The terms of the initial directors on the board shall be deemed to have commenced on September 1, 2021, the effective date of the establishment of the District. 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. XIII. DISTRICT MANAGEMENT STRUCTURE The District intends to enter into an agreement with VFC to deliver the programs and services contemplated under this Initial Plan and to manage the District. VFC is a 501(c)(6) organization that supports the development of Fort Collins. XIV. CITY SERVICES The District’s tourism services and improvements will be designed to supplement and complement existing City services and will be in addition to City services that are currently provided in Fort Collins. The District services and improvements are not intended to replace any existing City services or improvements. XV. ANNUAL REVIEW The TID Ordinance requires the District to file an annual operating plan and budget with the City on or before September 30 of each year. XVI. SURPLUS AND OTHER FUNDING For the initial year of the operation of the District beginning September 1, 2021, there shall be no surplus to be carried over from a previous year. For the initial year of the operation of the District beginning September 1, 2021, there shall be no deficit revenues to be carried over from a previous year. For the initial year of the operation of the District beginning September 1, 2021, the amount of contributions to be made from sources other than the District is approximately $350,000. XVII. DISSOLUTION The District shall dissolve on December 31, 2031, if not renewed by City Council. The District may also be dissolved before December 31, 2031, as provide in City Code Section 22-168. XVIII. CONCLUSION With the submission of this Initial Plan, VFC and participating lodging businesses hereby request the City Council of the City of Fort Collins to establish the District pursuant to the TID Ordinance. Exhibit C – City Boundary Map Exhibit D – List of Assessed Lodging Businesses Business Name Address City, State Zip Tax Account # / Lodging License # 1 Fort Collins’ Inn 1809 N College Ave Fort Collins, CO 80524 137367 2 Armstrong Hotel 259 S College Avenue Fort Collins, CO 80524 135396 3 Best Western University Inn 914 S College Avenue Fort Collins, CO 80524 52442 4 Budget Host Inn 1513 N College Avenue Fort Collins, CO 80524 133931 5 Cambria Suites 2921 E Harmony Rd Fort Collins, CO 80528 47600 6 Candlewood Suites 314 Pavilion Lane Fort Collins, CO 80525 130607 7 Comfort Suites 1415 Oakridge Dr Fort Collins, CO 80525 52424 8 Courtyard by Marriott 1200 Oakridge Dr Fort Collins, CO 80525 135015 9 Edwards House 402 W Mountain Ave Fort Collins, CO 80521 136625 10 El Palomino Motel 1220 N Collee Ave Fort Collins, CO 80524 130534 11 Fairfield Inn 3520 Timberwood Dr Fort Collins, CO 80528 138546 12 Fernweh Inn & Hostel 616 W Mulberry St Fort Collins, CO 80521 130537 13 Fort Collins Marriott 350 E Horsetooh Rd Fort Collins, CO 80525 51028 14 Hampton Inn 1620 Oakridge Dr Fort Collins, CO 80525 141789 15 Hilton Fort Collins 425 W Prospect Fort Collins, CO 80526 19891 16 Hilton Garden Inn Fort Collins 2821 E Harmony Rd Fort Collins, CO 80525 132925 17 Holiday Inn Express Hotel & Suites 1426 Oakridge Dr Fort Collins, CO 80525 43572 18 Home2 Suites 4715 S Timberline Rd Fort Collins, CO 80528 139935 19 Homewood Suites by Hilton 1521 Oakridge Dr Fort Collins, CO 80525 45926 20 Montclair Lodge 1405 N College Ave Fort Collins, CO 80524 41804 21 Quality Inn and Suites University 4001 S Mason St Fort Collins, CO 80525 142472 22 Residence Inn by Marriott 1127 Oakridge Dr Fort Collins, CO 80525 135017 23 The Elizabeth Hotel 111 Chestnut St Fort Collins, CO 80524 136199 ATTACHMENT 2 Company / Business Name DBA ATRIUM HOSPITALITY INC FORT COLLINS HILTON CCCS ARMSTRONG LLC ARMSTRONG HOTEL D AND S MOTELS INC MONTCLAIR LODGE FCMWC LLC THE ELIZABETH HOTEL FORT COLLINS LODGING INVESTORS LLCFORT COLLINS HOME2SUITES FTC HOSPITALITY INC QUALITY INN & SUITES UNIV FORT COLLINS GLOBOK, LLC EL PALOMINO MOTEL HABOK CHOI LLC BUDGET HOST INN HARMONY HOSPITALITY LLC HAMPTON INN HARMONY LODGING GROUP LLC HOLIDAY INN EXPRESS HARMONY SUITES LLC CAMBRIA SUITES HAYOUNG CHOI LLC FORT COLLINS INN HIT SWN TRS LLC HILTON GARDEN INN FORT COLLINS INTERMOUNTAIN MANAGEMENT HOMEWOOD SUITES BY HILTON RIESS HOSPITALITY INC BEST WESTERN UNIVERSITY INC RLC-IV CYFC LLC COURTYARD BY MARRIOTT RLC-V TIFC LLC RESIDENCE INN OF MARRIOTT SPARK HOSPITALITY COMFORT SUITES SWVP FORT COLLINS LLC MARRIOTT FORT COLLINS WILLCO VII DEVELOPMENT LLLP CANDLEWOOD SUITES FORT COLLINS WILLCO XV DEVELOPMENT LLLP FAIRFIELD INN FORT COLLINS THE EDWARDS HOUSE THE EDWARDS HOUSE FERNWAH HOSTEL FERNWAH HOSTEL 2027/2 = 1014 Green is executed documents Total Approved Petitions Currently at 78.6% 50% of room total is 1014; currently have 1594 committed ATTACHMENT 3 Room Total Committed with Signature Uncommitted with Confirmed Room Count Property Representative ~ General Manager 256 256 Daniel Benton 54 54 George Prine 18 18 Sunni Lee 164 164 Dragan Andrejic 108 108 Kent Stine 66 66 AV Atul 34 34 Steve & Tina 31 31 Gino Duran 75 75 Danielle Lowry 89 89 Jessica Saracino 90 90 Joel Reed 30 30 Taylor Choi 120 120 Marissa Burnell 99 99 Christine Stephens 70 70 Ashley Sommers 112 112 Patty Walsh 113 113 Patty Walsh 66 66 Cheryl Bossert 229 229 Sandi Fredrickson 83 83 Angie Lindell 106 106 Angie Lindell 8 8 Abbie Stout 6 6 Kelsey Schwager 2027 1594 433 To urism Improvement District July 20, 2021Clay Frickey | Redevelopment Program Manager ATTACHMENT 4 2Overview of Tourism Improvement District Formation •July 14 –Visit Fort Collins submitted petition to request formation of TID •To night’s action: First Reading of Tourism Improvement District formation ordinance 3What is a Tourism Improvement District? Source for all photos: visitfortcollins.com 4Overview of Tourism Improvement District •Governed by Board of Directors •Directors appointed by City Council •Purpose: increase room night sales for lodging businesses •Collect fees to achieve purpose •May not use eminent domain •Activities limited to tourism improvements and services •Applies to all lodging establishments in Fort Collins •Boundaries are coterminous with City limits •Initial term: 10 years, 4 months •Ends 2031 5Petition Process •Visit Fort Collins submitted petitions to City Clerk on July 14 •Must be approved by hotels operating at least 50% of hotel rooms in Fort Collins •Only applies to establishments with more than 3 rooms •Have received signed petitions representing 78.6% of hotel rooms in Fort Collins 6Petition Process June 30, 2021 Published notice of Public Hearing in Coloradoan for August 4 July 14, 2021 Petitions submitted to City Clerk July 20, 2021 First Reading of establishment ordinance Au gust 4, 2021 Public Hearing and Second Reading for District establishment ordinance 7Tourism Improvement District Funding •3% fee on lodging price •Collected by City •Collected at same time as lodging tax •Anticipated funding in 2021-2022 = $1.2 million 82021-2022 Tourism Improvement District Budget Budget Category Au gust 2021 – December 2021 January 2022 – December 2022 Revenue $400,000 $800,000 Administrative and General Expense $80,000 $160,000 Sales, Marketing and Communications $240,000 $480,000 Destination Development $60,000 $120,000 Reserves $12,000 $24,000 City Collection Fee $8,000 $16,000 To tal Expenses $400,000 $800,000 9Governance •Ordinance appoints initial Board of Directors •Board must be: •Between 5 and 9 Directors •Odd number of Directors •Three directors from large, full-service lodging business •One director from a small, limited-service lodging businesses •One director from a boutique or specialty lodging business •Proposed Board meets requirements 10Recommendation Staff recommends approval of the Ordinance on First Reading. -1- ORDINANCE NO. 097, 2021 OF THE COUNCIL OF THE CITY OF FORT COLLINS ESTABLISHING THE FORT COLLINS TOURISM IMPROVEMENT DISTRICT WHEREAS, the City Clerk has received a petition for the establishment (the “Petition”) of the Fort Collins Tourism Improvement District (the “District”) within the boundaries of the City of Fort Collins (the “City”); and WHEREAS, based upon the Petition and other information and evidence presented to the City Council at a noticed public hearing on the Petition, the City Council finds and determines that the Petition has been presented to the City Clerk in conformity with Article V of Chapter 22 of the City Code, which Article authorizes the establishment of tourism improvement districts (the “TID Ordinance”); and WHEREAS, all w ords and terms capitalized in this O rdinance shall have the meanings set forth in the TID Ordinance except as otherwise provided in this Ordinance ; and WHEREAS, the City Council further finds and determines that the signatures on the Petition are genuine and the signatures of the parties thereon are those of an Authorized Manager authorized to sign for an entity operating a Lodging Business, and such signatures represent 78.6 percent (78.6%) of the total Rooms to be included in the District, thus exceeding the fifty percent (50%) minimum Room-requirement for the establishment of a tourism improvement district under the TID Ordinance; and WHEREAS, as required by Section 22-158 of the TID Ordinance, the Petition sets forth, among other things: (a) A description of the District’s proposed boundaries; (b) A listing of all the initial Lodging Businesses to be included within the District, their respective street addresses, and their respective tax account and lodging license numbers maintained with the City; (c) A description of the kinds of Lodging Businesses initially included in the District and the kinds of future Lodging Businesses to be included in the District as provided in Section 22-160 of the TID Ordinance; (d) A general description of the types of Tourism Services and Tourism Improvements to be provided by the District; (e) A description of the fee the District will levy on the Lodging Businesses in the District, the proposed method by which it will be collected and disbursed, and the intended uses of the fee revenue; (f) The proposed composition of the District's Board, including the number of Directors to be appointed; -2- (g) A copy of the Initial Plan containing the information specified in Section 22-158 of the TID Ordinance; (h) The names of three persons who represent the petitioners on matters relating to the Petition and Initial Plan; and WHEREAS, as required by Section 22-161 of the TID Ordinance, the City Manager has determined that the Petition complies with all applicable requirements of the TID Ordinance and has forwarded the Petition to the City Council for its consideration at a public hearing; and WHEREAS, as also required by Section 22-161, the City Clerk has given notice of the public hearing by publishing a notice of it at least 30-days before the hearing, specifically the hearing on Second Reading, in the Fort Collins Coloradoan, mailing the notice by first class mail to all the Lodging Businesses proposed to be included in the District, and posting the notice on the City’s website; and WHEREAS, City Council has determined that the types of Tourism Services and Tourism Improvements proposed to be provided by the District satisfy the public purposes identified in Section 22-150 of the TID Ordinance. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. Adoption of Recitals. That the City Council hereby makes and adopts the determinations and findings contained in the recitals set forth above. Section 2. Findings. That following a duly noticed and conducted public hearing, as described below, and upon consideration of the evidence presented at the hearing and a recommendation from City staff that this Ordinance be enacted to establish the District, the Council further finds and determines: (a) That the proposed District was initiated by the Petition filed with the City Clerk on July 14, 2021, and the Petition satisfies the form and content requirements of Sections 22-156, 22-157 and 22-158 of the TID Ordinance, the allegations in it are true, and it was circulated and signed in conformity with all applicable requirements of the TID Ordinance; (b) That as required by Section 22-161 of the TID Ordinance, the place, date and time for a hearing on the Petition was scheduled for Wednesday, August 4, 2021, at 6:00 p.m., in the City Council Chambers, City Hall West, 300 LaPorte Avenue, Fort Collins, Colorado and, at least thirty (30) days before the hearing, the notice of the hearing was duly published on June 30, 2021 in the Fort Collins Coloradoan as evidenced by the “Affidavit of Publication” attached as Exhibit “A” and incorporated herein by reference, duly mailed on June 30, 2021 by the City Clerk to all the Lodging Businesses proposed to be included in the District, and duly posted on the City’s website on June 30, 2021; -3- (c) That appended to the Petition is the District’s proposed Initial Plan, a copy of which is attached as Exhibit “B” and incorporated herein by reference, (the “District’s Initial Plan”) which includes all the information required by Section 22-158 of the TID Ordinance including the District’s proposed budget for the sixteen-month period from September 1, 2021, through December 31, 2022 (the “Budget”); and (d) That the District’s Initial Plan and the establishment of the District are in the best interest of the City. Section 3. Establishment of District. The District is hereby declared a Tourism Improvement District duly established and organized under the TID Ordinance as a body corporate and politic, a “district” within the meaning of Article X, Section 20(2)(b) of the Colorado Constitution, and a unit of local government distinct and separate from the City itself. The District’s name shall be the “Fort Collins Tourism Improvement District.” Section 4. District Boundaries. The boundaries of the proposed District shall be coterminous with the City's boundaries as now existing and as hereafter modified through the City’s annexation and de-annexation of real property. Section 5. Included and Excluded Lodging Businesses. The Lodging Businesses to be included in the District shall be any “lodging provider,” as this term is defined in Article IV, Chapter 25 of the City Code (the “Lodging Tax Ordinance”), that is now or hereafter locate d within the District’s boundaries and that is required under the Lodging Tax Ordinance to obtain from the City a Lodging License and to pay the City’s Lodging Tax, but shall only include those lodging providers that engage in the business of furnishing a room or other accommodation in a hotel, motel, inn, bed and breakfast residence, apartment hotel, lodging house, motor hotel or similar lodging establishment and that has three (3) or more Rooms at its location to be so furnished for a period of less than thirty (30) consecutive days under any lease, rental, concession, permit, right of access, license or other agreement. However, a Lodging Business to be included in the District shall not include a “short term non -primary rental” or a “short term primary rental” as these terms are defined in City Code Section 15-641. Future Lodging Businesses that qualify to be included in the District under this Section 5 shall be automatically included in the District upon the City’s issuance of a Lodging License to such Lodging Businesses. Conversely, any Lodging Business included within the District which, by change of circumstances, no longer qualifies as a Lodging Business to be included in the District under this Section 5, shall be automatically excluded from the District. Section 6. Powers of District. That except as otherwise provided or limited in this Ordinance, the District shall have all the powers granted to Tourism Improvement Districts in the TID Ordinance as needed to implement and operate under the District’s Initial Plan. Any amendments to the District’s Initial Plan must first be approved by City Council by ordinance. The District shall have only those powers authorized in this Ordinance. Section 7. Appointment of Directors. The District’s Board shall have five (5) Directors who are Electors of the District having these additional qualifications: (i) three (3) -4- Directors must be affiliated with a large full-service Lodging Business in the District; (ii) one (1) Director must be affiliated with a small limited-service Lodging Business in the District; and (iii) one (1) Director must be affiliated with a boutique or specialty Lodging Business in the District. The following Electors are appointed as the District’s initial Directors to serve its Board for the staggered terms stated below: (a) Daniel Benton, affiliated with the Fort Collins Hilton, a large full-service Lodging Business, for a one (1) year term; (b) Danielle Lowry, affiliated with the Hampton Inn, a small limited-service Lodging Business, for a two (2) year term; (c) Dragan Andrejic, affiliated with The Elizabeth, a large full-service Lodging Business, for a two (2) year term; (d) George Prine, affiliated with The Armstrong, a boutique/specialty Lodging Business, for a three (3) year term; and (e) Sandra Fredrickson, affiliated with the Fort Collins Marriott, a large full-service Lodging Business, for a one (1) year term. The terms of the initial Directors on the District’s Board shall be deemed to have commenced on September 1, 2021, the effective date of the establishment of the District. 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. Section 8. Oath. Before serving on the District’s Board, each appointed Director of the Board shall appear before an officer authorized to administer oaths and take an oath that they will faithfully perform the duties of their office as required by law and will support the Constitution of the United States, the Constitution of the State of Colorado, and laws made pursuant thereto. The signed oath shall be kept in the records of the District’s secretary. Section 9. Board Operations. The District’s Board shall be organized and operated as provided in and in accordance with Section 22-164 and all other applicable provisions of the TID Ordinance. Section 10. Initial Plan and Budget. The Initial Plan and the District’s Budget are hereby approved. This approval of the District’s Budget for the sixteen (16) month period from September 1, 2021, through December 31, 2022, is hereby deemed to satisfy for the District’s 2022 fiscal year the requirements in Section 22-166 of the TID Ordinance that the District annually file with the City Clerk and the City Council annually approve the District’s budget for the ensuing fiscal year. Section 11. Assessment and Collection of District Fee. Beginning September 1, 2021, and continuing through December 31, 2021, the District may assess and collect a fee from -5- the Lodging Businesses within the District at the rate of three percent (3%) of a Lodging Business’s “lodging price” as this term is defined in Lodging Tax Ordinance (the “Fee”). However, the Fee shall not be assessed and collected on those transactions that are exempt from the City’s Lodging Tax as provided in Lodging Tax Ordinance. The revenue from the Fee shall only be used by the District to fund those Tourism Services and Tourism Improvements authorized in the Initial Plan. The District may use its own legal authority to collect the Fee or it may enter into an intergovernmental agreement with the City under which the City would collect the Fee in a manner similar to how the City collects its Lodging Tax under the Lodging Tax Ordinance. Under such agreement, the City would be responsible for collecting the Fee (including any delinquencies, penalties and interest) from each assessed Lodging Business within the District and the City would remit such Fee revenues collected to the District no later than the end of the month following the month the Fee revenues were collected by the City. The other specific details of such collection, enforcement and disbursement process will be as outlined in the intergovernmental agreement between the City and the District. Section 12. Penalties and Interest. The District may charge penalties and interest for any deficiency in a Lodging Business’s payment of the Fee in the same manner and at the same rates as provided in Sections 25-265 and 25-266 of the Lodging Tax Ordinance. Therefore, if the deficiency is due to the negligence of the Lodging Business, but without the intent to defraud, there shall be added as a penalty ten (10) percent of the total amount of the deficiency. Interest in such case shall be collected at the rate of one (1) percent per month on the amount of such deficiency from the time the return was due from the Lodging Business required to file the return until paid, which additional amount and interest shall become due and payable within twenty-one (21) days after written notice of determination, assessment and demand for payment is issued. However, if any part of the deficiency in the payment of the Fee is due to the intent by the Lodging Business to evade the Fee, then there shall be added as a penalty fifty (50) percent of the total amount of the deficiency, and in such case the whole amount of the Fee unpaid, including this addition and an additional one (1) percent per month of interest on such amount shall be added from the date the return was due until paid. This additional amount and interest shall become due and payable within twenty-one (21) days after written notice of determination, assessment and demand for payment is issued. Section 13. Financial and Contractual Obligations. The District may enter into binding multiple-fiscal year debt and other financial obligations only if the District’s Electors first approve such debt or obligations in an election that complies with all applicable state law requirements, including Article X, Section 20 of the Colorado Constitution. However, the District may enter into contracts that provide for expenditures beyond the end of the District’s fiscal year in which they are made if the enforcement of the financial obligations in such contracts are made subject to annual appropriation by the District’s Board. Section 14. District’s Term and Dissolution. The District shall have a term of ten (10) years and four (4) months beginning on September 1, 2021, and ending on December 31, 2031. The District shall dissolve on December 31, 2031, if not renewed by City Council. The District may also be dissolved before December 31, 2031, as provide in Section 22-168 of the TID Ordinance. Section 15. Compliance with City Code. Except as expressly provide in this Ordinance, the District shall be subject to and must comply with all applicable provisions of the -6- City Code including, without limitation, the TID Ordinance. In the event of any conflicting provisions in the City Code or this Ordinance and provisions in the Initia l Plan or the District’s future Annual Plans approved by the City Council, the City Code and this Ordinance shall control. Section 16. Title Headings. The title headings on each Section hereof are for convenience of reference only and shall not be deemed to expand or limit the scope of any Section. Section 17. Recordation. This Ordinance shall be recorded in the records of the Larimer County Clerk and Recorder. Introduced, considered favorably on first reading, and ordered published this 20th day of July, A.D. 2021, and to be presented for final passage on the 4th day of August, A.D. 2021. ______________________________ Mayor ATTEST: _____________________________ Interim City Clerk Passed and adopted on final reading on this 4th day of August, A.D. 2021. ______________________________ Mayor ATTEST: _____________________________ Interim City Clerk EXHIBIT A EXHIBIT A 1 Fort Collins Tourism Improvement District Initial Plan I.DISTRICT’S NAME The proposed name of this tourism improvement district shall be the “Fort Collins Tourism Improvement District” (District). II.LEGAL AUTHORITY The District is to be organized and established as a tourism improvement district (TID) as authorized in Article V of Chapter 22 of the Code of the City of Fort Collins (TID Ordinance) to fund and provide certain tourism services and improvements for the benefit of the lodging businesses included within the District. III.PURPOSE OF THE DISTRICT The District is being proposed by Visit Fort Collins (VFC) and certain Fort Collins lodging businesses and its purpose is to operate as a TID charging fees to the lodging businesses included within the District in order to fund and provide specific tourism services and improvements for the benefit of the feepayers’ lodging businesses. These services and improvements will be primarily used to increase room night sales for those lodging businesses. IV.HISTORY AND PURPOSE OF TIDs TIDs are an evolution of the traditional business improvement district. The first TID was formed in West Hollywood, California in 1989. Since then, over 170 United States destinations have followed suit. This includes many states that have adopted the California model. For example, Montana, South Dakota, Washington, Texas and Louisiana have adopted TID laws, as well as municipalities in Colorado. TIDs nation-wide collectively raise over $400 million annually for local destination marketing. With competitors raising their budgets, and increasing rivalry for visitor dollars, it is important that Fort Collins lodging businesses invest in stable, lodging-specific marketing programs. TIDs utilize the efficiencies of private sector operation in the market-based promotion of tourism, and allow lodging business owners to organize their efforts to increase room night sales. Participating Fort Collins lodging business owners within the TIDs will pay a fee and those funds will be used to provide services and improvements that increase room night sales. There are many benefits to forming a TID that charges a fee to the lodging businesses within it: •Fee revenues must be spent on services and improvements that provide a specific benefit only to the feepayers; •Fee revenues cannot be diverted to general government programs; •They are customized to fit the needs of feepayers in each destination; •They allow for a wide range of services; •They are designed, created and governed by those who will pay the fee; and •They provide a stable, long-term funding source for tourism promotion. V.THE DISTRICT’S BOUNDARIES The District’s boundaries shall be coterminous with the boundaries of the City of Fort Collins (City), the current boundaries of which are shown on the map attached as EXHIBIT A. “Lodging business” shall mean any “lodging provider,” as this term is defined in City Code Section 25-241, that is now or hereafter located within the District’s boundaries and that is required to obtain from the City a lodging license and to pay the City’s lodging tax as provided in Article IV, Chapter 25 of the City Code (Lodging Tax Ordinance), but shall only include those lodging providers that engage in the business of furnishing a room or other accommodation in a hotel, motel, EXHIBIT B 2 inn, bed and breakfast residence, apartment hotel, lodging house, motor hotel or similar lodging establishment and that has three (3) or more rooms at its location to be so furnished for a period of less than thirty (30) consecutive days under any lease, rental, concession, permit, right of access, license or other agreement. However, a “lodging business” shall not include a “short term non-primary rental” or a “short term primary rental” as these terms are defined in City Code Section 15-641. The District’s boundaries shall remain conterminous with the City’s boundaries. Therefore, future lodging businesses annexed into the City after the establishment of the District shall automatically be included within the District’s boundaries when the City’s Financial Officer issues a lodging license to that lodging business. The District will initially consist of twenty-three (23) lodging businesses. VI. DISTRICT’S INITIAL TERM The District will have an initial term of ten (10) years and four (4) months beginning on September 1, 2021 and ending on December 31, 2031. This will allow for the lodging businesses within the District to evaluate the District’s effectiveness at the end of the initial term. If the District is deemed successful, the District’s Board can then request the City Council to renew the District by ordinance to continue in existence after the initial term expires. If the District is not considered to be successful and the District is not renewed by the City Council, the District will be deemed dissolved at the end of the initial term. VII. PUBLIC PARTICIPATION VFC and the lodging businesses proposing the District have been conducting public outreach to the other affected lodging businesses, including one on one meetings and group meetings with all lodging businesses proposed to be included in the District and subject to the fee to provide them with consistent updates on the process to establishment of the District. To ensure accessibility for such lodging businesses, a Dropbox will be provided to easily submit their signed petitions, view this Initial Plan, and obtain other informational resources regarding the District. VIII. DISTRICT’S PROMOTIONAL PLAN The specific tourism services and improvements that the District will fund have been developed and prioritized by the lodging businesses proposing the establishment of the District. A summary for each of the District’s proposed programs is included below: • Sales, Marketing, & Communications: A sales, marketing, & communications program will promote assessed lodging businesses as tourist, meeting, and event destinations. The sales, marketing, & communications program will have a central theme of promoting the destination as a desirable place for overnight visits. The program will have the goal of increasing overnight visitation and room night sales at assessed lodging businesses, and may include the following activities, but are not limited to: - Internet marketing efforts to increase awareness and optimize internet presence to drive overnight visitation and room sales to assessed lodging businesses; - Print ads in magazines and newspapers, television ads, and radio ads targeted at potential visitors to drive overnight visitation and room sales to assessed lodging businesses; - Building the Fort Collins branding to attract overnight visitation to the District; - Potential attendance of trade shows to promote assessed lodging businesses; - Bids and fees associated with special events, including but not limited to sporting and music events and museum exhibits, to attract overnight visitors; - A city-wide special-event transportation program, connecting assessed lodging businesses with downtown and other attractions, to increase demand for room night sales; - Sales blitzes for assessed lodging businesses; - Familiarization tours of assessed lodging businesses; - Preparation and production of collateral promotional materials such as brochures, flyers and maps 3 featuring assessed lodging businesses; - Attendance of professional industry conferences and affiliation events to promote assessed lodging businesses; - Lead generation activities designed to attract tourists and group events to assessed lodging businesses; - Increased efforts focused on stimulating visitation to the District during the off-peak tourist season; - Director of Sales and General Manager meetings to plan and coordinate tourism promotion efforts for assessed lodging businesses; - Pursue hiring of additional sales staff to explore prospective marketing and sales development opportunities; - Education of hospitality staff on service and safety (related to alcohol and food) designed to create a visitor experience that will bring repeat visits to assessed lodging businesses; and - Education of lodging business management and the FCTID Board on marketing strategies best suited to meet assessed lodging businesses’ needs. • Destination Development: Destination development projects will be designed to improve the visitor experience in an effort to increase overnight visitation at assessed lodging businesses. As the total number of rooms sold and room prices increases over time, the amount of available funds for projects will increase. Working collaboratively with the City, the District Board will develop specific funding criteria. The City and VFC staff shall have equal input to make recommendations for final project approval. Policies and procedures acceptable to both the District Board and VFC will be developed. Projects may include, but are not limited to: - Comprehensive and integrated wayfinding signage system including signage to parking decks and lots; - A city-wide special-event transportation program, connecting assessed lodging businesses with downtown and other attractions, to increase demand for room night sales; - Conducting research studies to determine the feasibility of building proposed meeting spaces; - Art and cultural projects, to attract overnight visitors; - Gateway enhancements, to attract overnight visitors; - Enhancements to environmental experiences, which attract overnight visitors, that expose visitors to the value of the vital ecosystems; - Improvements to existing parks and sports facilities utilized by overnight visitors; - Safe and fun entertainment complex for young teens and adults utilized by overnight visitors; - Live music venue which attracts overnight visitors; - Bids and fees associated with special events, including but not limited to sporting and music events and museum exhibits, to attract overnight visitors; - Infrastructure improvements that enhance Fort Collins’ competitive position to attract desirable special events year around and attract overnight visitors; and - Improvements to the City’s downtown parking deck that make the overnight visitor experience more desirable. • Administration and Operations: The administration and operations portion of the budget shall be utilized for administrative staffing costs, office costs, advocacy, and other general administrative costs such as insurance, legal, and accounting fees. • Collection Fee: Under any intergovernmental agreement with the City of Fort Collins for it to collect the District’s fees, the City shall be paid a fee equal to at least two percent (2%) of the amount of the fee collected to cover its costs of collection and administration. • Contingency / Reserve / Renewal: The budget includes a contingency line item to account for lower than anticipated fees. If there are contingency funds collected, they may be held in a reserve fund or utilized for other program, administration or renewal costs at the discretion of the District Board. Policies relating to 4 contributions to the reserve fund, the target amount of the reserve fund, and expenditure of monies from the reserve fund shall be set by the District Board. Contingency/reserve funds may be spent on District programs or administrative and renewal costs in such proportions as determined by the District Board. The reserve fund may be used for the costs of renewing the District. In the first year of the District’s operations, it is proposed that the District would invest resources to undertake the following five key programs and goals: 1. Support sales development opportunities, which may include hiring a salesperson, prospecting tools or specific marketing activities/programs designed to bring business to Fort Collins; 2. Determine bid incentive funding levels and direction for enhanced sales activities; and 3. Explore additional advertising, promotional or public relations options and if appropriate, the course of action for investing. Bringing in revenue and contributions in addition to the District’s fees will increase impact and help the organization to best leverage investments into Fort Collins. To that end, the District will work with VFC to maintain current funding from the City of Fort Collins, as well as grants, donations, sponsorships, memberships, fee-for-service projects, crowdsourcing and partnerships on top of the District’s fees, for destination sales, marketing, communication, and destination development programs. The District Board, with City Council approval as required in City Code Section 22-166, will determine the annual operating budget each year of the District’s operations, based upon the priorities set out in this Initial Plan. IX. DISTRICT’S FINANCIAL PLAN FEE ASSESSMENT The District will assess a fee that will be three percent (3%) of a lodging business’s “lodging price” as this term is defined in City Code Section 25-241. However, the fee will not be collected on those transactions that are exempt from the City’s lodging tax as provided in City Code Section 25 -243. Fee revenue will only be used to fund destination sales, marketing, communication, and destination development programs, and related administration. The District proposes to collect the fee by entering into an intergovernmental agreement with the City under which the City would collect the fee in a manner similar to how the City collects its lodging tax under its Lodging Tax Ordinance. Under such agreement, the City would be responsible for collecting the fee (including any delinquencies, penalties and interest) from each assessed lodging business within the District and the City would remit such fees to the District no later than the end of the month following the month the fees were collected by the City. FINANCIAL AND CONTRACTUAL OBLIGATIONS As allowed by law, the District may enter into multiple-fiscal year debt and other financial obligations only if the District is authorized to do so by its initial plan, budget and its voters in a future election. The election must comply with all applicable state requirements, including Article X, Section 20 of the Colorado Constitution (the TABOR Amendment), and would limit the amount of multiple-fiscal year debt and other financial obligations that may be issued by the District to no more than the amount that is approved by the District’s voters. There are no anticipated multiple-fiscal year debt or other financial obligations anticipated to be incurred by the District. However, the District intends to exercise the power authorized in City Code Section 22-155 to enter into multiple-fiscal year debt or other financial obligations that are subject to annual appropriation by the District Board. 5 ESTIMATED COSTS & INITIAL 16-MONTH BUDGET The following chart depicts the anticipated budget for the first sixteen months of the District’s operations. Budget Category Sub-Category Line Detail September 2021 – December 2021 January 2022 – December 2022 41000 · FCTID Revenue $320,000.00 $800,000.00 Other Income $- $- $320,000.00 $800,000.00 61000 · Employee Expense 61010 · Salaries/Wages 61012 · Wages $19,912.00 $85,218.00 62023 · Employee Parking $48.00 $360.00 Total 61010 · Salaries/Wages $19,960.00 $85,578.00 61020 · Payroll Related 61022 · Payroll Taxes $1,840.00 $6,960.00 61024 · Unemployment Taxes $180.00 $682.00 61026 · Workers Compensation $800.00 $2,000.00 61028 · Employee Insurance $4,800.00 $18,000.00 61031 · Employee Benefits $1,200.00 $6,000.00 Total 61020 · Payroll Related $8,820.00 $33,642.00 Total 61000 · Employee Expense $28,780.00 $119,220.00 62000 · Administrative and General Administrative Sales, Marketing and Communications, 60% Destination Development15% Administration and Operations, 20% Contingency/Reserve, 3% City Collection Fee, 2% September 2021 -December 2022 Budget 6 62002 · Accounting $2,000.00 $6,000.00 62006 · Bank Charges $320.00 $1,200.00 62008 · Legal $10,000.00 $18,000.00 62025 · Supplies $320.00 $1,200.00 Total Administrative $12,640.00 $26,400.00 Office Rent Office Rent $1,140.00 $5,880.00 62070 · Telephone 62078 · Telephone - Cellular $1,920.00 $2,400.00 Total 62070 · Telephone $1,920.00 $2,400.00 62080 · Equipment/Computer Lease 62081 · Office Equipment Lease/Rental $- $- 62084 · Office Furniture $2,000.00 $- 62085 · Computer Software Purchase $480.00 $600.00 62086 · Computer Equipment $3,200.00 $4,000.00 62087 · Maintenance $1,200.00 $1,500.00 Total 62080 · Equipment/Computer Lease $6,880.00 $6,100.00 62099 · Miscellaneous $- $- Total 62000 · Administrative and General $64,000.00 $160,000.00 Sales Expense 78015 · Trade Shows $4,840.00 $16,550.00 73007 · Lead Generation $15,920.00 $27,900.00 73000 · Sales Activities $3,456.00 $4,000.00 73000 · Bid Activities $11,200.00 $60,000.00 73000 · Local Champions Program $48,000.00 $60,000.00 73000 · Research $12,000.00 $60,000.00 78015 · Travel $4,000.00 $9,550.00 Total Sales Expense $99,416.00 $238,000.00 Marketing 62004 · Advertising 80000 · Digital $18,400.00 $78,000.00 62005 · Promotions $2,744.00 $- 62004 · Advertising $32,000.00 $44,000.00 Total 62004 · Advertising $53,144.00 $122,000.00 62003 · Web/Internet Expenses 80030 · Website Service $9,920.00 $28,584.00 Total 62003 · Web/Internet Expenses $9,920.00 $28,584.00 62028 · Graphics 80040 · Graphic Arts $9,600.00 $27,500.00 7 Total 62028 · Graphics $9,600.00 $27,500.00 Public Relations 80070 · Agency Fees $3,600.00 $5,500.00 80080 · FAM Trips $4,800.00 $7,500.00 80090 · Media Events $4,800.00 $14,500.00 Total Public Relations $13,200.00 $27,500.00 International Marketing 81000 · Trade Shows $0.00 $3,000.00 81110 · Promotions $0.00 $- Total International Marketing $0.00 $3,000.00 Total Marketing $79,144.00 $208,584.00 Visitor Services DVIC Visitor Service Expense 62022 · Rent $2,400.00 $12,000.00 83020 · DVIC Supplies $240.00 $1,016.00 83010 · DVIC Volunteer Enhancement $600.00 $3,000.00 83017 · DVIC Staffing $3,120.00 $15,600.00 83015 · DVIC Janitorial $360.00 $1,800.00 Total DVIC Expense $6,720.00 $33,416.00 Total Visitor Services $6,720.00 $33,416.00 Total Sales, Marketing and Communications $192,000.00 $480,000.00 Destination Development 82015 · Initiatives $46,740.00 $116,400.00 82060 · Supplies $0.00 $- 82050 · CTA Program Fees $1,260.00 $3,600.00 82020 · Promotional Items $0.00 $- Total Destination Development $48,000.00 $120,000.00 Reserves 62009 · Reserves $9,600.00 $24,000.00 Total Reserves $9,600.00 $24,000.00 City Collection Fee 7100 · City Collection Fee $6,400.00 $16,000.00 Total City Collection Fee $6,400.00 $16,000.00 Total Expense $320,000.00 $800,000.00 Net Ordinary Income ($320,000.00) $(800,000.00) Net Income ($320,000.00) $(800,000.00) 8 X. PENALTIES AND INTEREST The penalties and interest charged for any deficiency in the payment of the District fee shall be the same as provided in Sections 25-265 and 25-266 of the Lodging Tax Ordinance. Therefore, if the deficiency is due to negligence, but without the intent to defraud, there shall be added as a penalty ten (10) percent of the total amount of the deficiency. Interest in such case shall be collected at the rate of one (1) percent per month on the amount of such deficiency from the time the return was due from the person required to file the return until paid, which additional amount and interest shall become due and payable within twenty-one (21) days after written notice of determination, fee and demand for payment is issued. However, if any part of the deficiency in the payment of the lodging tax is due to the intent by the taxpayer to evade the tax, then there shall be added as a penalty fifty (50) percent of the total amount of the deficiency, and in such case the whole amount of the tax unpaid, including this addition and an additional one (1) percent per month of interest on such amount shall be added from the date the return was due until paid. This additional amount and interest shall become due and payable within twenty-one (21) days after written notice of determination, assessment and demand for payment is issued. XI. TIME AND MANNER FOR COLLECTING FEES The District’s fee will be implemented beginning September 1, 2021 and will continue for ten (10) years and four (4) months through December 31, 2031. If the City Council authorizes the City to do so under an intergovernmental agreement with the District, the City will be responsible for collecting the fee (including any delinquencies, penalties and interest) from each lodging business. In such event, lodging businesses shall remit the fee each month to the City in substantially the same manner and at the same time as the lodging business is required to remit the lodging tax to the City. XII. DISTRICT GOVERNANCE The TID Ordinance requires the District to a have a governing board consisting of an odd number of directors of no fewer than five (5) directors and no more than nine (9) directors. All directors on the board must be qualified electors of the District. The board is proposed to have five (5) directors who are electors of the District having the following additional qualifications: (i) three (3) directors must be affiliated with a large, full-service lodging business; (ii) one (1) director must be affiliated with a small, limited-service lodging businesses; (iii) one (1) director must be affiliated with a boutique or specialty lodging business; and (iv) the remaining directors may be affiliated with any type of lodging business. The following persons are recommended to be appointed as the District’s initial directors on its board to serve the staggered terms indicated below as required by City Code Section 22-164: Board Member Affiliation Rationale for Inclusion on Board Initial Term: 1, 2, and 3 years Daniel Benton Fort Collins Hilton Full-service 1 year Danielle Lowry Hampton Inn Limited-service 2 years Dragan Andrejic The Elizabeth Full-service 2 years George Prine The Armstrong Boutique/Specialty 3 years Sandra Fredrickson Fort Collins Marriott Full-service 1 year The terms of the initial directors on the board shall be deemed to have commenced on September 1, 2021, the effective date of the establishment of the District. 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. 9 XIII. DISTRICT MANAGEMENT STRUCTURE The District intends to enter into an agreement with VFC to deliver the programs and services contemplated under this Initial Plan and to manage the District. VFC is a 501(c)(6) organization that supports the development of Fort Collins. XIV. CITY SERVICES The District’s tourism services and improvements will be designed to supplement and complement existing City services and will be in addition to City services that are currently provided in Fort Collins. The District services and improvements are not intended to replace any existing City services or improvements. XV. ANNUAL REVIEW The TID Ordinance requires the District to file an annual operating plan and budget with the City on or before September 30 of each year. XVI. SURPLUS AND OTHER FUNDING For the initial year of the operation of the District beginning September 1, 2021, there shall be no surplus to be carried over from a previous year. For the initial year of the operation of the District beginning September 1, 2021, there shall be no deficit revenues to be carried over from a previous year. For the initial year of the operation of the District beginning September 1, 2021, the amount of contributions to be made from sources other than the District is approximately $350,000. XVII. DISSOLUTION The District shall dissolve on December 31, 2031, if not renewed by City Council. The District may also be dissolved before December 31, 2031, as provide in City Code Section 22-168. XVIII. CONCLUSION With the submission of this Initial Plan, VFC and participating lodging businesses hereby request the City Council of the City of Fort Collins to establish the District pursuant to the TID Ordinance. - 10 - EXHIBIT A Boundary Map