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HomeMy WebLinkAboutagenda.council.regular.201906101 AGENDA CITY COUNCIL REGULAR MEETING June 10, 2019 5:00 PM, City Council Chambers 130 S Galena Street, Aspen I.CALL TO ORDER II.ROLL CALL III.SCHEDULED PUBLIC APPEARANCES III.A.Historic Preservation Awards IV.CITIZENS COMMENTS & PETITIONS (Time for any citizen to address Council on issues NOT scheduled for a public hearing. Please limit your comments to 3 minutes) V.SPECIAL ORDERS OF THE DAY a) Councilmembers' and Mayor's Comments b) Agenda Amendments c) City Manager's Comments d) Board Reports VI.CONSENT CALENDAR (These matters may be adopted together by a single motion) VI.A.Resolution # 066 Golf Course Equipment Lease Purchase VI.B.Minutes - May 20, 2021 VII.FIRST READING OF ORDINANCES VIII.PUBLIC HEARINGS VIII.A.Ordinance #14 Series 2019, (Reconsideration) Regulation of Flavored Tobacco and Nicotine Products IX.ADJOURNMENT X.SWEAR IN NEW COUNCIL MEMBERS 1 2 XI.CALL TO ORDER XII.ROLL CALL XIII.CITIZEN COMMENTS & PETITIONS (Time for any citizen to address Council on issues NOT scheduled for a public hearing. Please limit your comments to 3 minutes) XIV.COUNCILMEMBERS' & MAYOR'S COMMENTS XV.NOTICE OF CALL-UP XV.A.Notice of APCHA Resolution No. 04 (Series of 2019), Adopting Amendments to the Aspen/Pitkin Employee Housing Guidelines Redefining the Emergency Worker Procedure and Definition XV.B.Notice of APCHA Resolution No. 05 (Series of 2019), Adopting Amendments to the Aspen/Pitkin Employee Housing Guidelines Creating a Hearing Officer Position and Adopting a Schedule of Fines (Notice of Callup) XV.C.Notice of Resolution No. 02 (Series of 2018), Adopting Amendments to the Aspen/Pitkin County Housing Authority Employee Housing Guidelines adopting an Affordability Standard, New Minimum Net Livable Square Feet for new Affordable Housing, and Minimum Household Income Requirements to Bid on Ownership Units set on a Per Unit Basis Using Cost of Ownership, and adding Definitions of Affordability, and other terms. XVI.ACTION ITEMS XVI.A.Election of Mayor Pro Tem and appointment of Council Members to other boards and commissions XVII.ADJOURNMENT 2 Memorandum To: Mayor and City Council From: Steve Aitken, Director of Golf Thru: Austin Weiss, Parks and Open Space Director Thru: Pete Strecker, Finance Director Thru: Rebecca Hodgson, Purchasing Director Date: May 29, 2019 RE: Golf Course Mowing Equipment and Work Cart Lease to Purchase Request of Council: Staff requests Council to approve the lease to purchase agreement with Wells Fargo Financial Leasing Inc. of turf mowing equipment and work carts. Discussion: As requested in the 2019 budget approval process, the Golf Department is replacing several mowers and service vehicles in its fleet. Equipment scheduled for replacement includes: 4 Greens Mowers 2 Fairway Mowers 1 Rough Mower 2 Work Carts The equipment scheduled for replacement has served the golf operation well. All of the equipment being replaced is past due by industry standards with the number of hours and years accumulated. Increased need for maintenance and repairs has made this equipment obsolete. Two of the equipment purchases are for an electric version of a work cart and a greens mower. Staff believes that these equipment purchases offer increased environmental sensitivity. Over the last few years in the industry these electric options have gained acceptance due to reliability and performance. These purchases will allow staff to compare these to the gasoline equipment to assure that they perform as adequately as the existing fleet in this golf maintenance operation. If the electric versions prove to be as effective, reliable, and durable as the gasoline counterparts, future fleet purchases will be made favoring the electric vehicles and mowers. Due to the amount of equipment needed it was not possible for the Golf Department to purchase this equipment all at once. Lease to purchase on equipment of this type has 3 become very common in the industry, allowing golf operations to maintain a positive cash balance. Request for Proposals were not needed, as the replacement of existing equipment is all from the same manufacturer Jacobsen/Cushman. Changing brands would create additional parts inventory, additional training of operators and mechanics, and would cost more to maintain. Staff believes very strongly that Jacobsen/ Cushman can provide for all mowing and maintenance carts required at the Aspen Golf Course. The reasons for this are: Jacobsen greens mowers deliver the highest quality of cut. These mowers have a patented grooming system which is critical to the maintenance of poa annua greens that are at the Aspen Golf Club. The quality of the greens at Aspen Golf Club are better than those of the neighboring private clubs in the valley. It is one of the main reasons why Aspen Golf Club maintains its ranking as the very best Municipal Golf Course in the State of Colorado. The current fleet of Green Mowers, Tee Mowers and Work Carts at Aspen Golf Club are Jacobsen. All of the parts are interchangeable allowing for smaller inventories of parts. Since all mowers are of the same type and manufacturer, staff training time is reduced. Innovations to the Jacobsen rough mower have made maintenance simpler and more effective. The quality of cut, and potential to stripe areas creates more aesthetic appeal. The lower center of gravity on the Jacobsen fairway mowers and rough mowers are safer for the operator. Financial/ Budget Impacts: 1. The Golf Department turf fleet budget for each of the five years is $53,000.00. Actual annual fleet lease purchase payment amount is $56,466.63, due to the extra expense for electric work cart and electric greens mower. The additional $3,466.00 annual payment will come from 2018 departmental savings. Jacobsen/ Cushman Quote: $259,662.56 Interest over 5 years $22,665.59 Total Purchase Amount $282,328.15 The old mowing equipment and work carts will be sold or auctioned off. Environmental Impacts: The new equipment will have an increased fuel efficiency. The exhaust emission systems have also been improved. Additionally, electric mowers, 4 and work vehicles are being included in this purchase to measure their effectiveness and ultimate future implementation in the golf fleet replacement program. Recommended Action: Staff requests Council approve the lease to purchase contract with Wells Fargo Financial Leasing for turf fleet and work carts. Alternatives: Deferring this equipment purchase will increase the number of breakdowns and interruptions to mowing and maintenance operations. This decision would be less efficient, yield inferior quality of cut, increase man hours, and would be less safe. 5 RESOLUTION #66 (Series of 2019) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO, APPROVING A LEASE PURCHASE AGREEMENT BETWEEN THE CITY OF ASPEN AND WELLS FARGO FINANCIAL LEASING INC AUTHORIZING THE CITY MANAGER TO EXECUTE SAID AGREEMENT ON BEHALF OF THE CITY OF ASPEN, COLORADO. WHEREAS, there has been submitted to the City Council a lease purchase agreement for golf course equipment between the City of Aspen and Wells Fargo Financial Leasing Inc, a true and accurate copy of which is attached hereto as Exhibit “A”; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO, That the City Council of the City of Aspen hereby approves that Lease Purchase Agreement for golf course equipment between the City of Aspen and Wells Fargo Financial Leasing Inc a copy of which is annexed hereto and incorporated herein, and does hereby authorize the City Manager to execute said agreement on behalf of the City of Aspen. INTRODUCED, READ AND ADOPTED by the City Council of the City of Aspen on the 10 th day of June 2019. Steven Skadron, Mayor I, Linda Manning, duly appointed and acting City Clerk do certify that the foregoing is a true and accurate copy of that resolution adopted by the City Council of the City of Aspen, Colorado, at a meeting held June 10, 2019. Linda Manning, City Clerk 6 369721 v1 Document Check List  Sign & date the Master Equipment Lease-Purchase Agreement  Sign & date the Schedule to Master Equipment Lease-Purchase Agreement  Sign & date the Amortization Addendum/Payment Schedule  Sign & date the form 8038G IRS form o *Due to Federal Regulations, the 8038G must have a date of 7/15/2019  Attorney Opinion Letter completed on letterhead – (template enclosed)  Sign & date the Delivery and Acceptance Certificate  Complete, sign & date the Insurance Form (Requirements are listed) o Liability Coverage – Minimum coverage of $1 million Wells Fargo Financial Leasing to be listed as additional insured. o Property Coverage – Value of equipment covered Wells Fargo Financial Leasing to be listed as the Lenders loss payable endorsement.  Attach RFP – or letter stating there is not an RFP (on letterhead)  Complete, sign & date the Automatic Payment Form (OPTIONAL) o Include a voided check  Scan all of the completed & signed documents to: WFEFMDFGolfandTurf@wellsfargo.com Wells Fargo Financial Leasing, Inc. Attn: Sheri Delp WHITE OUT IS NOT ACCEPTABLE ON ANY DOCUMENT 7 Master Equipment Lease-Purchase Agreement Wells Fargo Financial Leasing, Inc. | 800 Walnut, 4th floor | Des Moines, Iowa 50309 | Phone: 800-247-5083 #2421697 v1 Master Municipal Tax-Exempt LP (10/22/13) Page 1 of 2 Customer Information: Customer’s Full Legal Name (“You” and “Your”): City of Aspen Address: 130 South Galena - Golf Department City/State/Zip Code: Aspen, CO 81611 Telephone Number: 970-920-5197 Federal Tax ID#: County: You acknowledge and agree that this agreement (as amended from time to time, this “Agreement”) and each Schedule (defined below) represent the complete and exclusive agreement between You and Us regarding the subject matter herein and therein and supersedes any other oral or written agreements between You and Us regarding such matters. “Schedule” means a schedule, in such form as We may accept in our sole discretion, that may be entered into from time to time by You and Us for a lease transaction pursuant to this Agreement. This Agreement and each Schedule can be changed only by a written agreement between You and Us. Other agreements not stated herein or in a Schedule (including, without limitation, those contained in any purchase order or service agreement between You and the Supplier) are not part of a Lease (defined below). This Agreement is not a commitment by Us to enter into any Schedule not currently in effect, and nothing in this Agreement shall impose, or be construed to impose, any obligation upon Us to enter into any proposed Schedule, it being understood that whether We enter into any proposed Schedule shall be a decision solely within Our discretion. 1. LEASE OF EQUIPMENT. Each Schedule executed by You represents Your agreement to lease from Us the personal property listed therein (together with all existing and future accessories, attachments, replacements and embedded software, the “Equipment”) upon the terms stated in such Schedule and this Agreement. Each Schedule and the terms of this Agreement which are incorporated by reference into such Schedule shall constitute a separate and independent contract between You and Us and shall be referred to as a “Lease”. In the event of any conflict between the provisions of this Agreement and the provisions of any Schedule, the provisions of the Schedule shall control. Each Schedule is binding on You as of the date You sign it. You agree that after You sign this Agreement or a Schedule, We may insert or correct any information missing in this Agreement or a Schedule, including Your proper legal name, serial numbers and any other information describing the Equipment. 2. TERM; PURCHASE OPTION. The term of each Lease will begin on, and interest shall accrue from, the date that We disburse lease proceeds pursuant to the related Schedule (the “Commencement Date”) and will continue for the number of months shown on such Schedule (the “Term”), subject to Section 14. You authorize Us to insert the applicable Commencement Date on the Schedule relating to each Lease. Each Lease is non-cancelable for the full Term, subject to Section 14. Notwithstanding the foregoing, provided that You are not then in default under a Lease, such Lease will terminate and Our security interest in the Equipment will terminate (i) at the end of the Term, upon payment in full of all Payments and other amounts payable by You under such Lease; or (ii) on any Payment date, upon payment by You of the then applicable “Prepayment Amount” under such Lease as set forth in the related Schedule, plus the Payment due on such date and all other amounts then due under such Lease, provided that You shall have given Us not less than 30 days’ prior written notice of Your intent to make such payment. 3. UNCONDITIONAL OBLIGATION. With respect to each Lease, You agree that: (i) We are a separate and independent company from the Supplier, manufacturer and any other vendor (collectively, “Vendors”), and the Vendors are NOT Our agents; (ii) No representation or warranty by any Vendor is binding on Us, and no Vendor has authority to waive or alter any term of this Agreement or any Schedule; (iii) You, not We, selected the Equipment and the Vendors based on Your own judgment; (iv) Your obligations under each Lease are absolute and unconditional and are not subject to cancellation, reduction or setoff for any reason whatsoever, subject to Section 14; (v) If You are a party to any maintenance, supplies or other contract with any Vendor, We are NOT a party thereto, such contract is NOT part of any Lease (even though We may, as a convenience to You and a Vendor, bill and collect monies owed by You to such Vendor), and no breach by any Vendor will excuse You from performing Your obligations to Us under any Lease; and (vi) If the Equipment is unsatisfactory or if any Vendor fails to provide any service or fulfill any other obligation to You, You shall not make any claim against Us and shall continue to fully perform under each Lease. 4. PAYMENTS. Each Payment Period for a given Lease, You agree to pay Us, by the due date set forth on Our invoice to You (i) the Payment due under the related Schedule, and (ii) applicable taxes and other charges provided for in the Lease. As set forth in the Schedule relating to a Lease, a portion of each Payment is paid as, and represents payment of, interest, and the balance of each Payment is paid as, and represents payment of, principal. Restrictive endorsements on checks will not be binding on Us. All payments received will be applied to past due amounts and to the current amount due in such order as We determine. Any security deposit that You pay under a Lease is non-interest bearing, may be commingled with Our funds, may be applied by Us at any time to cure any default by You, and the unused portion will be returned to You after You have satisfied all of Your obligations under the applicable Lease. If We do not receive a payment in full on or before its due date, You shall pay a fee equal to the greater of 10% of the amount that is late or $29.00 (or the maximum amount permitted by law if less). You shall pay Us a returned check or non-sufficient funds charge of $20.00 for any returned or dishonored check or draft. 5. INDEMNIFICATION. To the extent permitted by applicable law, You shall indemnify and hold Us harmless from and against, any and all claims, actions, damages, liabilities, losses and costs (including but not limited to reasonable attorneys’ fees) made against Us, or suffered or incurred by Us, arising directly or indirectly out of, or otherwise relating to, the delivery, installation, possession, ownership, use, loss of use, defect in or malfunction of the Equipment. This obligation shall survive the termination of each Lease. We shall not be liable to You for any damages of any kind, including any liability for consequential damages, arising out of the use of or the inability to use the Equipment. 6. NO WARRANTIES. WE ARE LEASING THE EQUIPMENT TO YOU “AS IS”. WE HAVE NOT MADE AND HEREBY DISCLAIM ANY AND ALL WARRANTIES, EXPRESS OR IMPLIED, ARISING BY APPLICABLE LAW OR OTHERWISE, INCLUDING WITHOUT LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. You hereby grant to Us a security interest in the Equipment and all proceeds thereof to secure Your obligations under each Lease. You authorize Us to record UCC financing statements to protect Our interests in the Equipment. 7. DELIVERY; LOCATION; OWNERSHIP; USE AND MAINTENANCE. We are not responsible for delivery or installation of the Equipment. You are responsible for Equipment maintenance. You will not remove the Equipment from the Equipment Location specified in a Schedule unless You first get Our permission. You shall give Us reasonable access to the Equipment Location so that We may inspect the Equipment, and You agree to pay Our costs in connection therewith. During the Term of each Lease, title to the Equipment shall vest in You, except as otherwise provided in the related Schedule; provided, however, upon a default under Section 11 or the termination of a Lease pursuant to an event of Non-Appropriation, title in and to the Equipment shall immediately vest in Us. If the Equipment includes any software: (i) We don’t own the software, (ii) You are responsible for entering into any necessary software license agreements with the owners or licensors of such software, (iii) You shall comply with the terms of all such agreements, if any, and (iv) any default by You under any such agreements shall constitute a default by You under the applicable Lease. You agree that the Equipment is and shall remain personal property and without Our prior written consent, You shall not permit it to become (i) attached to real property or (ii) subject to liens or encumbrances of any kind. You represent that the Equipment will be used solely for performing one or more of Your governmental functions and not for personal, family or household purposes. You will use the Equipment in accordance with all laws, operation manuals, service contracts (if any) and insurance requirements, and shall not make any permanent alterations to it. At Your own cost, You will keep the Equipment in good working order and warrantable condition, ordinary wear and tear excepted (“Good Condition”). 8. LOSS; DAMAGE; INSURANCE. You shall, at all times during each Lease, (i) bear the risk of loss and damage to the Equipment and shall continue performing all Your obligations to Us even if it becomes damaged or suffers a loss, (ii) keep the Equipment insured against all risks of damage and loss (“Property Insurance”) in an amount equal to its replacement cost, with Us named as sole “loss payee” (with a lender’s loss payable endorsement if required by Lessor or its Assignee), and (iii) carry public liability insurance covering bodily injury and property damage (“Liability Insurance”) in an amount acceptable to Us, with Us named as an additional insured thereunder. With respect to each Lease, You have the choice of satisfying these insurance requirements for a given Lease by providing Us with satisfactory evidence of Property and Liability Insurance (“Insurance Proof”), within 30 days of the Commencement Date of such Lease. Such Insurance Proof must provide for at least 30 days prior written notice to Us before it may be cancelled or terminated and must contain other terms satisfactory to Us. With Our prior written consent, You may satisfy Your Property Insurance BY SIGNING BELOW, CUSTOMER ACKNOWLEDGES RECEIPT OF PAGE 2 OF THIS AGREEMENT AND AGREES TO THE TERMS ON BOTH PAGES 1 & 2 Customer: (identified above) City of Aspen Wells Fargo Financial Leasing, Inc. (“We,” “Us,” “Our” and “Lessor”) By: Date: ____ / ____ / ____ By: Date: ____ / ____ / ____ Print name: Peter Strecker Title: Director of Finance Print name: Title: Agreement Number: 603-0209348 8 #2421697 v1 Master Municipal Tax-Exempt LP (10/22/13) Page 2 of 2 obligations under this Section 8 by means of a self-insurance program reasonably acceptable to Us. If you do not provide Us with Insurance Proof within 30 days of the Commencement Date of a Lease, or if such insurance terminates for any reason, then (a) You agree that We have the right, but not the obligation, to obtain such Property Insurance and/or Liability Insurance in such forms and amounts from an insurer of Our choosing in order to protect Our interests (“Other Insurance”), and (b) You agree that We may charge you a periodic charge for such Other Insurance. This periodic charge will include reimbursement for premiums advanced by Us to purchase Other Insurance, billing and tracking fees, charges for Our processing and related fees associated with the Other Insurance, and a finance charge of up to 18% per annum (or the maximum rate allowed by law if less) on any advances We make for premiums (collectively, the “Insurance Charge”). We and/or one or more of our affiliates and/or agents may receive a portion of the Insurance Charge, which may include a profit. We are not obligated to obtain, and may cancel, Other Insurance at any time without notice to You. Any Other Insurance need not name You as an insured or protect Your interests. The Insurance Charge may be higher than if You obtained Property and Liability Insurance on Your own. 9. ASSIGNMENT. You shall not sell, transfer, assign or otherwise encumber (collectively, “Transfer”) this Agreement or any Lease, or Transfer or sublease any Equipment, in whole or in part, without Our prior written consent. We may, without notice to You, Transfer Our interests in the Equipment, this Agreement and/or any Lease, in whole or in part, to a third party (an “Assignee”), in which case the Assignee will, to the extent of such Transfer, have all of Our rights and benefits but will not have to perform Our obligations (if any). Any Transfer by Us will not relieve Us of Our obligations under this Agreement or any Lease. You agree not to assert against the Assignee any claim, defense or offset You may have against Us. Upon receipt of notice of any Transfer of a Lease to an Assignee, You shall record the same in records maintained for such purpose in order to comply with Section 149 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations promulgated thereunder (collectively, the “Code”). 10. TAXES AND OTHER FEES. You are responsible for all taxes (including, without limitation, sales, use and personal property taxes, excluding only taxes based on Our income), assessments, license and registration fees and other governmental charges relating to this Agreement, each Lease and/or the Equipment (collectively “Governmental Charges”). Sales or use taxes due upfront will be payable over the Term of each Lease, with a finance charge. You authorize Us to pay any Governmental Charges as they become due, and You agree to reimburse Us promptly upon demand for the full amount. You agree to pay Us a fee for Our administration of taxes related to the Equipment leased under each Lease. With respect to each Lease, You also agree to pay Us upon demand a documentation/processing fee in the amount set forth in the related Schedule (or as otherwise agreed to). You also agree to pay Us a fee for additional services We may provide to You at Your request during a Lease. In connection with the expiration or earlier termination of a Lease, You agree to pay Us any Governmental Charges accrued or assessed but not yet due and payable, or Our estimate of such amounts. You agree that the fees and other amounts payable under this Agreement and each Lease may include a profit to Us and/or the Supplier. 11. DEFAULT; REMEDIES. With respect to each Lease, You will be in default if (1) You fail to pay any amount due under any Lease within 15 days of the due date; (2) You breach or attempt to breach any other term, representation or covenant in this Agreement, any Lease or in any other agreement now existing or hereafter entered into with Us or any Assignee; (3) an event of default occurs under any obligation You may now or hereafter owe to any affiliate of Us or any Assignee; (4) You file, or there is filed against You, a case or proceeding under any bankruptcy, insolvency or other similar laws, or (5) You suffer an adverse change in Your financial condition. If You default under a Lease, We may do any or all of the following: (A) cancel such Lease, (B) require You to promptly return the Equipment pursuant to Section 12, (C) take possession of and/or render the Equipment (including any software) unusable (and for such purposes You hereby authorize Us and Our designees to enter Your premises, with or without prior notice or other process of law), and sell, lease or otherwise dispose of the Equipment on such terms and in such manner as We may in Our sole discretion determine, (D) require You to pay to Us, on demand, liquidated damages in an amount equal to the sum of (i) all Payments and other amounts then due and past due under such Lease, and (ii) all remaining Payments for the remainder of Your then-current fiscal period (such amounts specified in sub-clauses “i” through “ii” referred to below as the “Balance Due”), and/or (E) exercise any other remedy available to Us under law. You also agree to reimburse Us on demand for all reasonable expenses of enforcement (including, without limitation, reasonable attorneys’ fees and other legal costs) and reasonable expenses of repossessing, holding, preparing for disposition, and disposition (“Remarketing”) of the Equipment. In the event We are successful in Remarketing the Equipment, We shall give You a credit against the Balance Due in an amount equal to the present value of the proceeds received and to be received from Remarketing minus the above-mentioned costs (the “Net Proceeds”). If the Net Proceeds are less than the Balance Due, You shall be liable for such deficiency. Any delay or failure to enforce Our rights hereunder shall not constitute a waiver thereof. The remedies set forth herein are cumulative and may be exercised concurrently or separately. 12. RETURN OF EQUIPMENT. If You are required to return the Equipment under any Lease, You shall, at Your expense, send the Equipment to any location(s) that We may designate and pay Us a handling fee of $250.00. The Equipment must be properly packed for shipment, freight prepaid and fully insured, and must be received in Good Condition (defined in Section 7). All terms of the applicable Lease, including Your obligation to make Payments and pay all other amounts due thereunder shall continue to apply until the Equipment is received by Us in accordance with the terms of this Agreement. You are solely responsible for removing all data from any digital storage device, hard drive or other electronic medium prior to returning the Equipment or otherwise removing or allowing the removal of the Equipment from Your premises for any reason (and You are solely responsible for selecting an appropriate removal standard that meets Your business needs and complies with applicable laws). We shall not be liable for any losses, directly or indirectly arising out of, or by reason of the presence and/or use of any information, images or content retained by or resident in any Equipment returned to Us or repossessed by Us. 13. APPLICABLE LAW; SEVERABILITY. This Agreement and each Lease shall be deemed fully executed and performed in the State in which You are located. YOU AND WE HEREBY WAIVE YOUR AND OUR RESPECTIVE RIGHTS TO A TRIAL BY JURY IN ANY LEGAL ACTION. If any amount charged or collected under this Agreement or any Lease is greater than the amount allowed by law (an “Excess Amount”), then (i) any Excess Amount charged but not yet paid will be waived by Us and (ii) any Excess Amount collected will be refunded to You or applied to any other amount then due hereunder or thereunder. Each provision of this Agreement and each Lease shall be interpreted to the maximum extent possible to be enforceable under applicable law. If any provision of this Agreement or any Lease is construed to be unenforceable, such provision shall be ineffective only to the extent of such unenforceability without invalidating the remainder hereof or thereof. 14. GOVERNMENTAL PROVISIONS. As of the Commencement Date of each Lease, You hereby represent, warrant and covenant to Us that: (a) You intend, subject only to this Section 14, to remit to Us all sums due and to become due under this Lease for the full Term; (b) Your governing body has appropriated sufficient funds to pay all Payments and other amounts due during Your current fiscal period; (c) You reasonably believe that legally available funds in an amount sufficient to make all Payments for the full Term can be obtained; and (d) You intend to do all things lawfully within Your power to obtain and maintain funds from which Payments may be made, including making provision for such payments to the extent necessary in each budget or appropriation request submitted and adopted in accordance with applicable law. If Your governing body fails to appropriate sufficient funds to pay all Payments and other amounts due and to become due hereunder in Your next fiscal period (“Non- Appropriation”), then (i) You shall promptly notify Us of such Non-Appropriation, (ii) this Lease will terminate as of the last day of the fiscal period for which appropriations were received, and (iii) You shall return the Equipment to Us pursuant to Section 12. Your obligations under each Lease shall constitute a current expense and shall not in any way be construed to be a debt in contravention of any applicable constitutional or statutory limitations or requirements concerning Your creation of indebtedness, nor shall anything contained herein constitute a pledge of Your general tax revenues, funds or monies. As of the Commencement Date of each Lease, You further represent, warrant and covenant to Us: (a) You have the power and authority under applicable law to enter into such Lease and the transactions contemplated thereby and to perform all of Your obligations thereunder, (b) You have duly authorized the execution and delivery of such Lease by appropriate official action of Your governing body and You have obtained such other authorizations, consents and/or approvals as are necessary to consummate such Lease, (c) all legal and other requirements have been met, and procedures have occurred, to render such Lease enforceable against You in accordance with its terms, and (d) You have complied with all public bidding requirements applicable to such Lease and the transactions contemplated thereby. 15. TAX REPRESENTATIONS AND COVENANTS. As of the Commencement Date of each Lease, You hereby represent, warrant and covenant unto Us that: (a) You are a state or political subdivision thereof within the meaning of Section 103(c) of the Code and will do or cause to be done all things necessary to preserve and keep in full force and effect Your existence as such, (b) You intend that each Lease not constitute a “true” lease for federal income tax purpose and therefore, it is Your intention that You be considered the owner of all Equipment for federal income tax purposes, (c) You will not take any action that would cause the interest component of Payments to be or to become ineligible for the exclusion from Our gross income for federal income tax purposes, nor will You omit to take or cause to be taken, in a timely manner, any action which omission would cause the interest component of such Payments to be or to become ineligible for the exclusion from Our gross income for federal income tax purposes, (d)Yo u have not created or established, and do not expect to create or establish, any sinking fund or similar fund (i) that is reasonably expected to be used to pay the Payments, or (ii) that may be used solely to prevent a default in the payment of Payments, (e) the proceeds of each Lease will not be used to reimburse You for expenditures made more than 60 days prior to the Commencement Date or, if earlier, more than 60 days prior to any official action taken to evidence an intent to finance the Equipment under such Lease, (f) You will not permit any Equipment to be used, directly or indirectly, for a private business use within the meaning of Section 141 of the Code, and (g) You agree to complete in a timely manner an information reporting return (either Form 8038-G or Form 8038-GC, as appropriate) with respect to each Lease as required by the Code. If you breach any of the covenants contained in this Section 15, the interest component of Payments may become includible in Our gross income for federal income tax purposes. In such event, You agree to pay Us promptly after any such determination of taxability and on each Payment date thereafter an additional amount determined by Us to compensate Us for the loss of such excludability. Notwithstanding anything in this Section 15 or elsewhere in this Agreement to the contrary, any amount payable by You under a Lease shall be payable solely from funds legally available for such purpose and shall be subject to Section 14 hereof. 16. MISCELLANEOUS. You shall furnish Us or an Assignee with current financial statements, current budgets and/or proof of appropriations for each Lease for each ensuing fiscal period upon request by Us or an Assignee. You authorize Us or an Assignee to (a) obtain credit reports or make credit inquiries in connection with this Agreement or any Lease, and (b) provide Your credit application, information regarding Your account to credit reporting agencies, potential Assignees, Vendors and parties having an economic interest in this Agreement, a Lease and/or the Equipment. Each Lease may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute the same document; provided, however, with respect to a Schedule, only the counterpart which is marked “Original” and is in Our possession shall constitute chattel paper under the UCC. You acknowledge that You have received a copy of this Agreement and each Schedule and agree that a facsimile or other copy containing Your faxed, copied or electronically transmitted signature may be treated as an original and will be admissible as evidence of this Agreement and any Lease. You waive notice of receipt of a copy of this Agreement and any Schedule with Our original signature. 9 Schedule to Master Equipment Lease-Purchase Agreement Wells Fargo Financial Leasing, Inc. | 800 Walnut, 4th floor | Des Moines, Iowa 50309 | Phone: 800-247-5083 #2421997 v1 Master Municipal Tax-Exempt LP Schedule – Multistate (10/22/13) Page 1 of 1 Customer Information: Customer’s Full Legal Name (“You” and “Your”): City of Aspen Address: 130 South Galena - Golf Department City/State/Zip Code: Aspen, CO 81611 County: Equipment Information: See Attached Equipment Schedule Equipment Location (if different than address shown above): 585 Cemetery Lane , Aspen CO 81622 Quantity Equipment Make, Model & Serial Number Quantity Equipment Make, Model & Serial Number (1)2019 Cushman Hauler PRO 72v Utility Vehicle (1)2019 Cushman Hauler 1200X Gas Utility Vehicle (1)2019 Jacobsen Greens King IV Riding Greens Mower w/accessories (2)2019 Jacobsen Greens King IV Riding Greens Mower w/accessories (1)2019 Jacobsen TurfCat Rotary Surrounds Mower w/accessories (2)2019 Jacobsen LF550 Fairway Mower w/accessories (1)2019 Jacobsen Eclipse 322 Electric Riding Greens Mower w/accessories Term And Payment Information: Term: 49 months Interest Rate: 4.11 Amount Financed: $259,662.56 Payment: See Payment Schedule attached hereto Payment Period is “Monthly” unless otherwise noted here: See Payment Schedule Security Deposit: $ Documentation/Processing Fee: $75.00 Advance Payment: $0.00 applied to: 1st Payment Last Payment 1st and Last Payments This is a Schedule that is being entered into subject to the master agreement referenced below (the “Master Agreement”) between You and Us. All of the terms and conditions set forth in the Master Agreement are hereby reaffirmed and incorporated in and made part of this Schedule, as if fully set forth herein. The Master Agreement together with this Schedule constitute a Lease (as defined in the Master Agreement) and represent the complete and exclusive agreement between You and Us regarding the leasing of the equipment listed above (together with all existing and future accessories, attachments, replacements and embedded software, the “Equipment”). This Schedule can be changed only by a written agreement between You and Us. Any amendment to the Master Agreement subsequent to the date of this Schedule shall be ineffective as to this Schedule unless otherwise expressly stated in such amendment. 1. LEASE OF EQUIPMENT. You hereby agree to lease from Us the Equipment described above upon the terms and conditions set forth in this Schedule and in the Master Agreement. 2. GENERAL GOVERNMENTAL PROVISIONS. You hereby represent, warrant and covenant to Us that with respect to this Schedule, Your representations, warranties and covenants set forth in the Master Agreement (including, without limitation, those set forth in Sections 14 and 15 thereof) are true and correct as though made as of the Commencement Date hereof. 3. MISCELLANEOUS. This Schedule may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute the same document; provided, however, only the counterpart which is marked “Original” and is in Our possession shall constitute chattel paper under the UCC. You acknowledge that You have received a copy of the Master Agreement and this Schedule and agree that a facsimile or other copy containing Your faxed, copied or electronically transmitted signature may be treated as an original and will be admissible as evidence of this Lease. You waive notice of receipt of a copy of this Schedule with Our original signature. This Lease is non-cancelable for the full Term, except as otherwise provided in the Master Agreement. Customer: (identified above) City of Aspen Wells Fargo Financial Leasing, Inc. (“We,” “Us” and “Our”) By: Date: ____ / ____ / ____ By: Print name: Pete Strecker Title: Director of Finance Print name: Title: Schedule Number: 603-0209348-000 Commencement Date: ____ / ____ / ____ Master Agreement Number: 603-0209348 10 1 City of Aspen Amortization Schedule/Payment Schedule Nominal Annual Rate: 4.11% Event Amount Number Period 1 Loan $259,662.56 1 3 Payment $56,465.63 5 Annual =================== Amortization Schedule=========================== Interest Date Funding Payment @ 4.11 Principal Balance --------- ------------- ------------- - -------------- - ------------- - ------------------- - 1 $56,465.63 $888.17 $55,577.46 $204,085.10 2 $0.00 $698.06 -$698.06 $204,783.16 3 $0.00 $700.45 -$700.45 $205,483.61 4 $0.00 $702.85 -$702.85 $206,186.46 5 $0.00 $705.25 -$705.25 $206,891.71 6 $0.00 $707.66 -$707.66 $207,599.37 7 $0.00 $710.09 -$710.09 $208,309.46 8 $0.00 $712.51 -$712.51 $209,021.97 9 $0.00 $714.95 -$714.95 $209,736.92 10 $0.00 $717.40 -$717.40 $210,454.32 11 $0.00 $719.84 -$719.84 $211,174.16 12 $0.00 $722.32 -$722.32 $211,896.48 13 $56,465.63 $724.78 $55,740.85 $156,155.63 14 $0.00 $534.12 -$534.12 $156,689.75 15 $0.00 $535.95 -$535.95 $157,225.70 16 $0.00 $537.79 -$537.79 $157,763.49 17 $0.00 $539.62 -$539.62 $158,303.11 18 $0.00 $541.47 -$541.47 $158,844.58 19 $0.00 $543.32 -$543.32 $159,387.90 20 $0.00 $545.18 -$545.18 $159,933.08 21 $0.00 $547.04 -$547.04 $160,480.12 22 $0.00 $548.92 -$548.92 $161,029.04 23 $0.00 $550.79 -$550.79 $161,579.83 24 $0.00 $552.68 -$552.68 $162,132.51 25 $56,465.63 $554.56 $55,911.07 $106,221.44 26 $0.00 $363.33 -$363.33 $106,584.77 27 $0.00 $364.57 -$364.57 $106,949.34 28 $0.00 $365.81 -$365.81 $107,315.15 29 $0.00 $367.07 -$367.07 $107,682.22 30 $0.00 $368.32 -$368.32 $108,050.54 31 $0.00 $369.58 -$369.58 $108,420.12 32 $0.00 $370.85 -$370.85 $108,790.97 11 2 33 $0.00 $372.11 -$372.11 $109,163.08 34 $0.00 $373.39 -$373.39 $109,536.47 35 $0.00 $374.67 -$374.67 $109,911.14 36 $0.00 $375.94 -$375.94 $110,287.08 37 $56,465.63 $377.24 $56,088.39 $54,198.69 38 $0.00 $185.38 -$185.38 $54,384.07 39 $0.00 $186.02 -$186.02 $54,570.09 40 $0.00 $186.65 -$186.65 $54,756.74 41 $0.00 $187.30 -$187.30 $54,944.04 42 $0.00 $187.93 -$187.93 $55,131.97 43 $0.00 $188.58 -$188.58 $55,320.55 44 $0.00 $189.22 -$189.22 $55,509.77 45 $0.00 $189.87 -$189.87 $55,699.64 46 $0.00 $190.51 -$190.51 $55,890.15 47 $0.00 $191.17 -$191.17 $56,081.32 48 $0.00 $191.83 -$191.83 $56,273.15 49 $56,465.63 $192.48 $56,273.15 $0.00 ------------ ----------- ----------- ----------- $259,662.56 $282,328.15 $22,665.59 $259,662.56 Lessee: City of Aspen Signer: ____________________________________ Name: Peter Strecker, Director of Finance Date: ____________________________________ 12 Wells Fargo Financial Leasing, Inc. | 800 Walnut Street, 4th Floor| Des Moines, IA 50309 City of Aspen 130 South Galena - Golf Department Aspen,CO 81611 Re: Tax-Exempt Lease-Purchase Transaction Dear Peter Strecker In connection with your tax-exempt lease-purchase transaction with Wells Fargo, attached please find the Form 8038-G that you need to sign before we can file it with the Internal Revenue Service (IRS). This document is required by the IRS for tax-exempt transactions. Additionally, please advise us if you have established written procedures relating to the matters referred to in lines 43 and 44 of the attached Form 8038-G, and if so, please provide copies of such procedures. For your convenience, we have attached the official IRS instructions for Form 8038-G which provide additional information regarding the procedures referred to in lines 43 and 44. Please note that if we do not receive copies of the written procedures referred to above, we will file the Form 8038-G without checking the boxes for line 43 or 44. Please return the signed Form 8038-G and, if applicable, the written procedures referred to above along with your signed lease documents. Thank you for prompt attention to this matter. Sincerely, Sheri Delp Sales Support Representative Enclosure 13 Form 8038-G (Rev. September 2018) Department of the Treasury Internal Revenue Service Information Return for Tax-Exempt Governmental Bonds a Under Internal Revenue Code section 149(e) a See separate instructions. Caution: If the issue price is under $100,000, use Form 8038-GC. a Go to www.irs.gov/F8038G for instructions and the latest information. OMB No. 1545-0720 Part I Reporting Authority If Amended Return, check here a 1 Issuer’s name 2 Issuer’s employer identification number (EIN) 3a Name of person (other than issuer) with whom the IRS may communicate about this return (see instructions)3b Telephone number of other person shown on 3a 4 Number and street (or P.O. box if mail is not delivered to street address)Room/suite 5 Report number (For IRS Use Only) 3 6 City, town, or post office, state, and ZIP code 7 Date of issue 8 Name of issue 9 CUSIP number 10a Name and title of officer or other employee of the issuer whom the IRS may call for more information (see instructions) 10b Telephone number of officer or other employee shown on 10a Part II Type of Issue (enter the issue price). See the instructions and attach schedule. 11 Education ..............................11 12 Health and hospital ..........................12 13 Transportation ............................13 14 Public safety .............................14 15 Environment (including sewage bonds) ....................15 16 Housing ..............................16 17 Utilities ..............................17 18 Other. Describe a 18 19 a If bonds are TANs or RANs, check only box 19a ............... a b If bonds are BANs, check only box 19b .................. a 20 If bonds are in the form of a lease or installment sale, check box ......... a Part III Description of Bonds. Complete for the entire issue for which this form is being filed. 21 (a) Final maturity date (b) Issue price (c) Stated redemption price at maturity (d) Weighted average maturity (e) Yield $ $ years % Part IV Uses of Proceeds of Bond Issue (including underwriters’ discount) 22 Proceeds used for accrued interest .....................22 23 Issue price of entire issue (enter amount from line 21, column (b)) ...........23 24 Proceeds used for bond issuance costs (including underwriters’ discount) 24 25 Proceeds used for credit enhancement ............25 26 Proceeds allocated to reasonably required reserve or replacement fund .26 27 Proceeds used to refund prior tax-exempt bonds. Complete Part V . . .27 28 Proceeds used to refund prior taxable bonds. Complete Part V ....28 29 Total (add lines 24 through 28) .......................29 30 Nonrefunding proceeds of the issue (subtract line 29 from line 23 and enter amount here) . . .30 Part V Description of Refunded Bonds. Complete this part only for refunding bonds. 31 Enter the remaining weighted average maturity of the tax-exempt bonds to be refunded . . . a years 32 Enter the remaining weighted average maturity of the taxable bonds to be refunded .... a years 33 Enter the last date on which the refunded tax-exempt bonds will be called (MM/DD/YYYY) . . a 34 Enter the date(s) the refunded bonds were issued a (MM/DD/YYYY) For Paperwork Reduction Act Notice, see separate instructions.Cat. No. 63773S Form 8038-G (Rev. 9-2018) City of Aspen 84-6000563 130 S. Galena St. Aspen, CO 81611 07/15/2019 Master Equipment Lease-Purchase Agreement None Pete Strecker, Director of Finance 970-920-5197 Golf & turf equipment 259,662 56 08/15/2023 259,662.56 N/A 4.09 4.11 14 Form 8038-G (Rev. 9-2018)Page 2 Part VI Miscellaneous 35 Enter the amount of the state volume cap allocated to the issue under section 141(b)(5) ....35 36 a Enter the amount of gross proceeds invested or to be invested in a guaranteed investment contract (GIC). See instructions .........................36a b Enter the final maturity date of the GIC a (MM/DD/YYYY) c Enter the name of the GIC provider a 37 Pooled financings: Enter the amount of the proceeds of this issue that are to be used to make loans to other governmental units ........................37 38 a If this issue is a loan made from the proceeds of another tax-exempt issue, check box a and enter the following information: b Enter the date of the master pool bond a (MM/DD/YYYY) c Enter the EIN of the issuer of the master pool bond a d Enter the name of the issuer of the master pool bond a 39 If the issuer has designated the issue under section 265(b)(3)(B)(i)(III) (small issuer exception), check box .... a 40 If the issuer has elected to pay a penalty in lieu of arbitrage rebate, check box ............. a 41 a If the issuer has identified a hedge, check here a and enter the following information: b Name of hedge provider a c Type of hedge a d Term of hedge a 42 If the issuer has superintegrated the hedge, check box ..................... a 43 If the issuer has established written procedures to ensure that all nonqualified bonds of this issue are remediated according to the requirements under the Code and Regulations (see instructions), check box ........ a 44 If the issuer has established written procedures to monitor the requirements of section 148, check box ..... a 45a If some portion of the proceeds was used to reimburse expenditures, check here a and enter the amount of reimbursement .............. a b Enter the date the official intent was adopted a (MM/DD/YYYY) Signature and Consent Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. I further declare that I consent to the IRS’s disclosure of the issuer’s return information, as necessary to process this return, to the person that I have authorized above.FSignature of issuer’s authorized representative Date FType or print name and title Paid Preparer Use Only Print/Type preparer’s name Preparer’s signature Date Check if self-employed PTIN Firm’s name a Firm’s address a Firm’s EIN a Phone no. Form 8038-G (Rev. 9-2018) Pete Strecker, Director of Finance Braydn L Weber P01777861 Wells Fargo Financial Leasing, Inc. 800 Walnut St. Des Moines, IA 50309 42-1074725 800-247-5083 15 Delivery & Acceptance Certificate - Municipal Wells Fargo Financial Leasing, Inc. | 800 Walnut, 4th floor | Des Moines, Iowa 50309 | Phone: 800-247-5083 #2470045 v1 (10/21/13) Page 1 of 1 Title of lease, rental or other agreement: Master Equipment Lease-Purchase Agreement (the “Agreement”) Lessee/Renter/Customer: City of Aspen (“Customer”) The Customer named above hereby unconditionally represents and certifies to Wells Fargo Financial Leasing, Inc. (“Wells Fargo”), and agrees, that: 1. The equipment, other personal property and software, if any, described below (collectively, the “Goods”) which have been leased or otherwise provided to Customer or otherwise constitutes collateral under the above-referenced Agreement, has been fully delivered and installed at Customer’s place of business, has been inspected and tested by Customer and is operating in good working order to Customer’s complete satisfaction, meets all of Customer’s requirements and specifications, and is hereby irrevocably accepted by Customer: Quantity Make or other description Model name (if any) Serial # (if any) (1)2019 Cushman Hauler PRO 72v Utility Vehicle (1)2019 Cushman Hauler 1200X Gas Utility Vehicle (1)2019 Jacobsen Greens King IV Riding Greens Mower w/accessories (2)2019 Jacobsen Greens King IV Riding Greens Mower w/accessories (1)2019 Jacobsen TurfCat Rotary Surrounds Mower w/accessories (2)2019 Jacobsen LF550 Fairway Mower w/accessories (1)2019 Jacobsen Eclipse 322 Electric Riding Greens Mower w/accessories Attach additional page if necessary 2. There are no side agreements between Customer and any third party relating to the subject matter of the Agreement, and no cancellation rights have been granted to Customer by Company or any third party (excluding any cancellation in connection with an event of Non-Appropriation (as defined in the Agreement)). There is no “free demonstration” or “test” period for the Goods. 3. Customer has reviewed and understands all of the terms of the Agreement, and Customer agrees that the Agreement cannot be revoked or cancelled or terminated early for any reason (excluding any termination in connection with an event of Non-Appropriation). Customer hereby directs Wells Fargo to pay the vendor/supplier of the Goods. Customer agrees that (i) Wells Fargo may insert the Agreement number (and Master Agreement Number, if applicable) and the date below if either is missing following the Customer’s signature below, and (ii) a facsimile or other copy of this document containing your faxed, copied or electronically transmitted signature may be treated as an original for all purposes. Instruction to Customer: Do NOT sign this Certificate until ALL of the Goods have been delivered, installed, inspected and tested to your satisfaction. Customer (identified above): City of Aspen By: Date: ____ / ____ / ____ Print name: Pete Strecker Title: Director of Finance Agreement Number: 603-0209348-000 Master Agreement Number (if applicable): 603-0209348 16 60602-v8 Customer Insurance Certification Lessee: City of Aspen Application Number:LS-3842785 Liability Coverage Minimum coverage of $1 million Wells Fargo Financial Leasing to be listed as additional insured. Name of Insurance Agency: Phone Number of Agency: Mailing Address of Agency: Fax Number of Agency: Email Address of Agency: Property Coverage (Complete if a different provider from above) Value of equipment covered All Risk Physical Damage Insurance Wells Fargo Financial Leasing to be listed as the Lenders loss payable endorsement. Name of Insurance Agency: Phone Number of Agency: Mailing Address of Agency: Fax Number of Agency: Email Address of Agency: “In accordance with the term of our Master Equipment Lease Agreement with Wells Fargo Financial Leasing, Inc. (“Wells Fargo”), we maintain the liability and property insurance coverage as described above. We hereby authorize Wells Fargo to contact the agencies identified above and further authorize the agencies to issue insurance certificates to Wells Fargo.” _________________________________ _________________________ Lessee Signature Date Send to Wells Fargo Financial Leasing, Inc. via mail to: Wells Fargo Financial Leasing, Inc., Golf and Turf Division, MAC# N0005- 044, 800 Walnut Street, Des Moines, IA 50309; or via Fax to: Wells Fargo Financial Leasing, Inc., attn: Golf and Turf Division Fax #866-336-8375. Office Use Only Contact Date: Contact Name: Insurance Company(s): Policy No(s): Expiration Date(s): Insured Value: Named Sole Loss Payee: Wells Fargo Financial Leasing, Inc. YES WILL BE ADDED Verified By: Additional Insured: Wells Fargo Financial Leasing, Inc. YES WILL BE ADDED Public Liability Insurance Limits: 17 Authorization for Automatic Payment Plan Wells Fargo Financial Leasing, Inc. | 800 Walnut Street, 5th Floor| Des Moines, Iowa 50309 | Phone: 866-497-6661 #2433348 v2 (10/27/14) Page 1 of 1 Title of lease, rental or other agreement: Master Equipment Lease-Purchase Agreement (the “Agreement”) You authorize regularly scheduled payments and all other obligations due and owing under or in connection with the above- referenced Agreement to be made from your account referenced below (the “Debit Account”). Your payments will be made automatically on the contract due date as indicated on your invoice. Proof of payment will appear with your bank statement. The authority you give to charge your Debit Account will remain in effect for the above-referenced Agreement until you notify us that you wish to terminate the authorization and we have had a reasonable opportunity to act on it. Please make your regular payment until your invoice indicates that the Automatic Payment Plan is in effect. I authorize Wells Fargo Financial Leasing, Inc. (“Creditor”) to initiate electronic debit entries to the Debit Account (and, if necessary, electronically credit such Debit Account to correct erroneous debits). I understand that this authority will remain in effect until I notify Creditor in writing at the address or fax number set forth below that I wish to revoke this authorization in such time as to afford Creditor a reasonable opportunity to act on it. I understand that Creditor needs at least 3 days’ prior written notice to revoke this authorization. Funds transfers to or from the Debit Account will be governed by the rules of any funds transfer system through which the transfers are made, as amended from time to time, including, without limitation, the National Automated Clearing House Association and any regional association (each, an “ACH”). I agree that electronic debit entries that I authorize comply with all applicable laws, rules and regulations. City of Aspen Company Name Company Address Authorized Signature and Title Date Bank Name City State Account Number Bank ABA / Routing Number (For checking account, located between the symbols :000000000: on the bottom of your check) This is a checking / savings account. (Circle one). PLEASE RETURN TO: Wells Fargo Financial Leasing, Inc. MAC N0005-055 800 Walnut Street Des Moines, IA 50309 Or Fax to (888) 241-4382 Or E-mail to customerservice@financialservicing.net FOR OFFICE USE ONLY CCAN Number Payment Due Date(s) Agreement Number: 603-0209348-000 Comments: 18 Regular Meeting Aspen City Council May 20, 2019 1 CITIZEN COMMENTS...............................................................................................................................2 CITY COUNCIL COMMENTS...................................................................................................................2 BOARD REPORTS......................................................................................................................................2 CONSENT CALENDAR.............................................................................................................................2 Resolution #62, Series of 2019 – Water Shortage Stage II...................................................................3 Resolution #61, Series of 2019 – Terminating the Management Service Agreement between the Red Brick Center for the Arts and City................................................................................................................3 Resolution #63, Series of 2019 – Castle Creek Trail IGA....................................................................3 Resolution #64, Series of 2019 – 488 Castle Creek Trail IGA.............................................................3 Resolution #65, Series of 2019 – Wheeler Chiller Replacement..........................................................3 Minutes – May 13, 2019.......................................................................................................................3 ORDINANCE #52, SERIES OF 2019 – Flavored Tobacco Ban................................................................3 ORDINANCE #12, SERIES OF 2019 – Land Use Code Amendments for APCHA Referrals...................7 ORDINANCE #10, SERIES OF 2019 – 119 Neale Avenue – Transferable Development Rights..............7 ORDINANCE #13, SEREIS OF 2019 – Transportation and Parking Land Use Code Amendments..........8 19 Regular Meeting Aspen City Council May 20, 2019 2 At 5:00 p.m. Mayor Skadron called the regular meeting to order with Councilmembers Hauenstein, Frisch and Myron present. CITIZEN COMMENTS 1. Toni Kronberg said there are no bike lanes on Rio Grande Place. The street needs to be safe, either one way or add bike lanes. 2. Bob Morris said he won’t be here at the next meeting. Steve, you’ve been great. You thank us for giving up our valuable time for coming here. We want to thank you for all the time you’ve spent on behalf of the city. Bob gave the Mayor a trophy. He said in horse racing there is win, place and show. I wanted to personally congratulate Adam not only on your dedication and concern. I also want to congratulate you on a hard fought campaign. Bob gave Adam a medal. There has been one person on council who has fought and fought and not always in the majority. Bob gave Bert a boxing glove trophy. Ann gets the silver medal. Torre gets a medal also. We couldn’t leave Ward out but couldn’t figure out what he does. Ward got a trophy as well. Arbor day was a great event. Thanks to everyone who was involved. CITY COUNCIL COMMENTS Councilman Myrin said a lot of what I tried was to get the carrying capacity conversation going. I would like council to have comdev put together a pipeline spreadsheet so we have a snapshot of what we left the community with. Jessica Garrow, community development, said we just updated it. Councilman Myrin said what Toni said is important. Rio grand access to city hall. Dedicated bike lanes are very different than sharos. I never understood the financing for AHP. I would like to get a summary of what AHP is contributing and receiving and what the city is contributing. I would like a simple snapshot to see that. Ms. Ott said we can try to put something together, it may not be simple. Councilman Myrin said he is looking forward to the land use side of those. The money part never made sense. Councilman Hauenstein said the snow looks good on the grass. Councilman Frisch said he is glad the mountain is opening for Memorial day. Mayor Skadron said tomorrow is the meet and great for finalists for communications director, 2:30 at the fire station. Thank you parks for Arbor day. The Burlingame park grand opening is June 5th . One of the projects that was years in development and is finally happening. Saturday night was Earth’s Call. I had a chance to talk about some of our environmental successes. I shared our story with a world wide audience. Never underestimate the ability of a small place to influence the world wide conversation. Thank you to the team at Earth’s Call. I’m disappointed the ride for the pass was canceled. BOARD REPORTS Councilman Frisch said he wrapped up his final CORE meeting after 6 years. One of the highlights of being on council. Hats off to Mona and a great team. Councilman Hauenstein said CCLC met last week and I asked them to weigh in on the tobacco ordinance. Much to my surprise they passed 2 resolutions, one asking for a total ban on tobacco sales in Aspen and another for the prohibition of tobacco use in the core. I asked them to reach out to the community. CONSENT CALENDAR Reso #65 – Wheeler chiller Councilman Hauenstein said this is replacing a chiller that is smaller than the one that was there. It requires HPC approval because of a rooftop element that may conflict with view planes. Why, if it is being replaced with something that is smaller. Ms. Garrow said a few years ago during the moratorium 20 Regular Meeting Aspen City Council May 20, 2019 3 there were a number of code changes including view plane regulations. Council was concerned that there was a one size fits all approach with view planes. We created standards for fore, mid and background. Because of where the Wheeler is located within the Jerome view plane it triggers a review. There is a lot of equipment on the roof and they can’t achieve a 20 foot setback from the alley. That is why it triggers a review. Councilman Hauenstein said it seems like the chiller should be grandfatehered in. It was approved previously and used for decades. Ms. Garrow said we deal with this on a weekly basis. Businesses or homes interested in making changes to hvac and it often requires some level of review. Because of the nature of protecting our view planes and the linkage to ref 1. Prior to the changes this would have required a public vote. We are happy to take another look at this if council desires. Ms. Ott said council is always interested in having city projects go through the public process. We are consistent with HPC having review authority. Councilman Hauenstein asked any mechanical equipment on a roof say next door to the Wheeler, if replaced, triggers a whole new review. Ms. Garrow said it depends. The simplest analogy is a fence. A 6ft tall fence on your front lot line is not allowed anymore. You can do maintenance but the minute it is removed you must comply with the current code. That is standard for how we treat all land use in the city. Councilman Hauenstein said I understand the emergency nature of this and the fast track to installation. I’m just a bit perplexed we might lose it through HPC. Mayor Skadron said thank you to the Wheeler team and asset for taking a necessary action to ensure summer programming at the Wheeler will continue unimpeded. Reso #62 – repeal water shortage. Councilman Frisch said on one hand would be great to keep it to see if there is a further reduction of water. Hopefully we are not in a temporary blessing of water. Appreciate staff for bringing this forward. Councilman Hauenstein said we should as a community review what was in place. The water shortage measures seem reasonable for all time not just during a shortage. Ms. Ott replied we have a team looking at that. Mayor Skadron said on the Castle Creek trail IGA, my very first council meeting in 2007 this item was on the agenda. Glad to see its been fast tracked. Resolution #62, Series of 2019 – Water Shortage Stage II Resolution #61, Series of 2019 – Terminating the Management Service Agreement between the Red Brick Center for the Arts and City Resolution #63, Series of 2019 – Castle Creek Trail IGA Resolution #64, Series of 2019 – 488 Castle Creek Trail IGA Resolution #65, Series of 2019 – Wheeler Chiller Replacement Minutes – May 13, 2019 Councilman Frisch moved to adopt the Consent Calendar; seconded by Councilman Hauenstein. All in favor, motion carried. ORDINANCE #52, SERIES OF 2019 – Flavored Tobacco Ban CJ Oliver, environmental health, said if passed the ordinance would ban flavored vaping products or all flavored tobacco products. Colorado vaping rates are about double the national average. Our rates in Aspen are double the Colorado average. 70% of high school students have tried vaping, 45% in the past 30 days. Students also report an increase in the use of other tobacco products. Why the focus on flavors. 81% of teens and 86% of young adults report their first tobacco product was flavored. E cigs are sold in over 7,000 flavors. They are geared toward youth consumers. Flavored products are considered a starter product by the FDA and US surgeon general. They can lead to a life time addiction. Long term vaping 21 Regular Meeting Aspen City Council May 20, 2019 4 risks are largely unknown. They may be safer than cigarettes. It should not be the high water mark for safety. We are talking about a young person with no history of use picking up vaping as a gateway to nicotine exposure. Nicotine has significant impacts on the developing brain including impulse controls, learning and attention and long term addiction. A number of communities up and down the valley have taken actions to limit the risk to youth. Aspen and Basalt have T21, tax and licensing. Carbondale and Snowmass have passed portions of that. Due to new state regulations, counties can now participate in many of the same programs as municipalities. Pitkin and Garfield are looking to have similar regulations in place. There are 2 versions of the ordinance in the packet. One bans flavored vaping products and the second bans all flavored nicotine. The third option is hitting pause and waiting for other jurisdictions to catch up. Aspen is the only community in Colorado considering a flavor ban. Mayor Skadron said Juul has a full page ad in the wall street journal asking legislators to raise the smoking age to 21. I thought the timing of the ad was interesting. Councilman Myrin said Ward raised earlier banning the use of tobacco products in the city. Is that something that we could do, I would support it. I’m not interested in an outright ban. Jim True, city attorney, said in public places we have the authority to mark them as non smoking. You could do that in any park or public facility, inside and out. Councilman Myrin said that I would support because it impacts others. People over 21 should be able to do what they want as long as it doesn’t impact others. I would support what CCLC suggested. Councilman Hauenstein said 16 municipalities have indoor vaping bans. Aspen is not one of them. There are harmful chemicals emitted during vaping and some communities have recognized that and banned vaping indoor. I think this will be an ongoing issue. Mr. True said council could take that step with an amendment to the air quality section of the code. We are not here with the proper mechanism to do that. Mayor Skadron opened the public comment. 1. Naomi, advocate director for the heart association of Colorado. I urge council to lead and set an example for the state on banning all flavored products. They are considered starter products for youth. I’m fortunate that my mother no longer uses tobacco products. She was diagnosed with cancer and I believe years of smoking had an impact on that. Think about the impact on future generations. Aspen has the opportunity to protect the health of youth and all residents. She urged council to ban all flavored tobacco products. 2. Keith Burgline, assistant director of youth zone. This is a complex issue. From our experience we have to look at if from the kids who are using tobacco. We are 100 % on the side of a ban to protect kids. 3. Risa Turetsky, representing public health. Thank you for taking the time to consider this. On behalf of the department, whatever the city decides we are with you. She handed out a fact sheet. Contrary to what we may think, Aspen has a higher rate of use than the state average, particularly in the high school. Looking at other tobacco products our rates are almost double the state average. Cigarettes, over 11% of high school students have said they have smoked in the last 30 days. 80% of kids who use menthol are more likely to become smokers and 25% become addictive. Kids gravitate towards flavors and the main reason why they start using. Over 16% of boys in the high school use other tobacco products. In 2015, over 35% of boys in the 12 th grade said they have smoked cigarillos in the past 30 days. In 2009 the FDA put in place a partial ban including flavored cigarettes but excluded menthol. There are other products including powders and picks infused with nicotine. We want a proactive policy rather than a responsive one. Despite what you chose to do, adults will still be able to buy tobacco in Aspen. 4. Dr. Kim Levin, Pitkin County medical officer. When I first proposed this my original intent was children and teens. This is who we want to protect. What I’ve learned is that a comprehensive ban is the most important way to go. I have great sensitivities to the retailers in town. In Canada in 2017 there was a nation wide ban on menthol cigarettes. San Francisco banned in 2018 all flavored tobacco. The FDA proposed a ban on menthol last fall. 2009 tobacco control ban banned all flavored cigarettes except menthol. Why. It is the biggest money maker. It is time to 22 Regular Meeting Aspen City Council May 20, 2019 5 address menthol. She showed Zin, white tobaccoless powder. Brand new and in our valley. It is basically a nicotine delivery system in a cool clean way. As a physician, there are so many nicotine replacement products on the market. They are effective and we don’t need any more. Menthol and flavors are marketed toward children. Mint is the number one flavor among children. They will easily transition into menthol. Legislation can not keep up with the changing market of these devices. The only way to address this and protect children is a compressive ban. Councilman Myrin asked how does Zin differ from patches and alternatives to get off of it. Dr. Levin said they are cool and new and discrete. It is the same in that it is a delivery system. It is better than cigarettes since they don’t contain the carcinogens but it is still a delivery system. Mr. True said the proposed ordinance has an exception for term tobacco product used with the cessation of smoking. Risa said Zin and e cigarettes are not approved as a cessation product. Mr. True said there is a distinction that is important to note. If they are approved by the FDA for cessation of smoking then they would be allowed to be sold under the ordinance, regardless of flavor. Councilman Myrin mentioned not wanting to impact people not over 21. Dr. Levin said it clearly will, but the focus is the greater good for the children. Councilman Myrin asked is alcohol next then marijuana. Dr. Levin replied it is a slippery slope. It is the greatest good for the youth. It will impact people’s choices, but it doesn’t ban it. Councilman Hauenstein said the Juul website says your journey starts here. 5. Mike, John and Brady Haisfield – for me it is not about dollars and bottom line. It is about sense. Over 21 should be able to make that decision. If it was about bottom line we never would have taken those products off our shelf. You can still buy them at the AABC. Mayor Skadron said talk about the reality of sales geography related to this product. Our case is different since it is just city market and your store. You can easily jump to the ABC and buy it. Mike said I want to focus more on education. It is not being done at the school. It would be more effective if Basalt and the county were included in a ban. This needs to be focused on what the youth are doing. Anything I think will be in the hands of kids will not be on our shelves. Education would be more effective rather than taking the choice away from someone over 21. John – junior at high school. From a student’s perspective the main problem at the school is e cig and vape products. You never see kids chewing or using zin. I think some of the statistics from 2015 showing kids have a higher chance of smoking cigarettes, right now Juul is the trend. If you eliminate the trend you eliminate the problem. Brady – in the school you can go in the bathroom and never see kids using tobacco. There are kids who will try selling you a Juul but not zin or dip. 6. Bob Morris said I manage the Aspen Mountain lodge and just replaced the carpet in a room where someone stepped on a cigarette. When someone signs in they sign that they will not smoke in the room without paying $250. We’ve charged that many times. 7. Toni Kronberg said it is the education that is really needed to deter anyone. Kids are driving to Glenwood and Carbondale to buy their products. Basalt has already overcollected on sales tax for the year and had to stop. Kids and adults are not taught how to cope and that is one of the reasons they turn into an addictive personality. Why are Aspen kids twice the rate of the rest of Colorado in picking up tobacco. I’m concerned of what will kids do if they don’t smoke cigarettes. I’m not advocating for them but what can we do to help them with their coping skills so they don’t turn to tobacco. 8. Kim Levine said I appreciate the comments. The idea here is to be a leader and have others follow. On education, I agree with what has been said. It is the key to changing culture. It is a much larger conversation. You have to attack addiction from all angles and use all the tools you have. We should use tobacco tax funds for education. Mayor Skadron closed public comment. Councilman Frisch said the focus on original legislation and vaping products. For 2 years we have been focused on a conversation of youth. I have a hard time answering the question of why not alcohol. I don’t know what to do about it and have a hard time squaring it up. I think we should focus on the vaping aspects of this then figure out what we want to do on a community level. I’m sure getting rid of alcohol would make the youth community healthier. I think we need to have tobacco be part of a broader community conversation. As much as I despise and hate tobacco, when I think about what is the best 23 Regular Meeting Aspen City Council May 20, 2019 6 thing to do for health I think there are a lot more touchier issues. I think for the integrity of future health conversations, we are left with high bar stuff, the best thing to do for the community is to get the vaping thing done and have the next council look at a broader public health level. While other cities and states have tackled this I’m pretty sure it came with public dialogue. I think more needs to be done and let the general public know we are going beyond youth, regionalism would be great. Councilman Hauenstein said it is not a black and white issue. It could be government over reach. If I were to tell you scooters caused 480,000 deaths a year and cost 370 billion dollars would it be easy to ban scooters. 480,000 people die each year from tobacco related issues. We sit up here and are expected to make rational decisions. Sometimes the brain and heart are in battle with each other. My heart is forcing me to make this decision. The health of our community, not just youth. We’ve heard valid and meaningful arguments that someone over 21 should be allowed to do what they want to do. I’ve given this so much thought this last week. I have so much for Mike taking vaping off the shelves. It is not unprecedented that government has reach. Maybe the rational argument outweighs the hear felt measure. City market said kids would be vaping without the nicotine. They do it because of the taste. I feel as a representative of the people of Aspen I have to do what is for the greater good, not only for youth but for adults. Maybe in 20 years we will say I can’t believe people smoke. Opioids are legal and heroin is not. Maybe because they don’t have a lobby putting millions of dollars into it. In the end, I guess I’m going to have to ask Adam to change his mind and support a full ban. Mr. True said for the record it is a full tobacco flavor ban. Not a ban on all tobacco sales. Councilman Myrin asked at what age can someone chose to ride a motorcycle without a helmet. It impacts all of us. We heard about use in the school bathrooms and sales on the school campus. I think that is where this conversation should be held, at the school campus. We elect a school board and they need to address that. There were several reasons to focus on the full ban. One the geographic limits. Another reason was to be a leader and set an example. I think that is not a reason to do something. Another reason raised tonight was the impact on businesses. That is also not a reason to me. I struggle with the 21 and setting an age. I would like people to be free to do what they want as long as it doesn’t harm others. This time I’m leaning to where Adam is with the vape ban. I would have the new council look at a ban on use in public places. I’m torn on this. Mayor Skadron said this is about protecting a private commercial interest as Bert and Adam said. Councilman Myrin said nope, that is not it for me. It is the 21 and how does it impact the youth because it is available. Mayor Skadron said my concern is the impact on commercial interest and the public non commercial interest. I like standing up and saying no to the tobacco industry. I like helping the next generation avoid addiction. I like doing that by limiting the availability and use of tobacco products. This touches on the life long Aspenite chapter of our community plan. I think it is incumbent upon me to support aggressive steps to reduce the availability of these products to our children. I will support Ward’s position and vote for the full ban. Councilman Frisch said I don’t think it is a values clash. I think there is an interesting dialogue to be had as to where should we spend our time and money regarding community health. We can wait for Ann to come back June 10th and tackle this there. The other case to be made is support the lower level because something is better than nothing. It was the original plan for the last 2 years. Councilman Myrin said I’m supporting a ban on the vape. Mayor Skadron said in the spirit of moving something forward would you support the flavor ban Ward. Councilman Hauenstein said I would support waiting for Ann. Mr. True said you pass ordinance 14 on page 65 then move to reconsider it on the 10th with the other language. You could do that, but you could continue this until the 10th. Councilman Myrin said it would let the community know this is coming. I would support that and the reconsideration. Mr. True said there is a way to do what you are suggesting. 24 Regular Meeting Aspen City Council May 20, 2019 7 Councilman Frisch said if that were done tonight and there are 3 votes to support page 72 would it delay the effective date. Mr. True replied correct. This is written to go in to effect January 1, 2020. It is not just a 30 day effective date. Councilman Hauenstein said I would like to see the full ban. If we don’t have the votes for it tonight it is reasonable to pass the ban discluding menthol and revisit it. if I vote against it I can’t vote to reconsider. I would prefer to vote against it. Councilman Myrin said it would help with transparity to the community. Mayor Skadron said the motion to support ord 14 from page 65. Mr. True said it is the amendment that was read at first reading. Mr. Oliver said this version would ban the sale of flavored vaping liquid only. Mr. True said the ordinance on page 65 would not affect zin. It talks about flavored electronic cigarette juices. Councilman Frisch said I appreciate the sincerity and how this will not delay the full ban. Councilman Myrin moved to adopt Ordinance #14, Series of 2019 from page 65; seconded by Councilman Frisch. Roll call vote. Councilmembers Myrin, yes; Frisch, yes; Hauenstein, yes; Mayor Skadron, yes. Motion carried. ORDINANCE #12, SERIES OF 2019 – Land Use Code Amendments for APCHA Referrals Mike Kraemer, community development, said at the last meeting council passed a motion to amend the APCHA IGA. Included was the make up of the board including elected officials on the board. Com dev identified land use code referral requirements for APCHA recommendation. Code changes will eliminate referral requirements with guideline compliance. 15 sections will get changed with this ordinance. Councilman Frisch said I’m support of this. We talked originally about a conflict of interest of elected making comments wearing an APCHA hat. What happens if the staff person proactively asks for advice from the board. Are they able to give it. Mr. True said as I mentioned last time, there is case law from the court of appeals, that indicated when you are on that kind of advisory board it doesn’t mandate a recusal when they have already heard a project in front of an advisory body. There may be cases when the elected official choses to recuse from the advisory body knowing it will come up before council or county. The best way is to keep it among a staff level. Councilman Frisch said I remain supportive. Mayor Skadron opened the public comment. There was none. Mayor Skadron closed the public comment. Councilman Frisch moved to adopt Ordinance #12, Series of 2019; seconded by Councilman Hauenstein. Roll call vote. Councilmembers Hauenstein, yes; Frisch, yes; Myrin, yes; Mayor Skadron, yes. Motion carried. ORDINANCE #10, SERIES OF 2019 – 119 Neale Avenue – Transferable Development Rights Amy Simon, community development, said this will sever two TDRs from 119 Neale Ave. Council agreed to this as part of a lawsuit and settlement. We have two changes. One to clarify a shed built without permits will be fully removed before the certificates are issues. The second is a 788 square foot portion of the property is not included or encumbered by the deed restriction. Staff recommends approval. Councilman Frisch said there have been a few people asking specifics about the process. There is a discussion out there about who owns what parcel and square feet. What staff is recommending is we have 25 Regular Meeting Aspen City Council May 20, 2019 8 no jurisdiction over that. What we are focused on is rectifying a situation regardless of disputed land. Our obligation is 2 TDRs. Ms. Simon said today we double checked the floor area calculations. Whatever happens with the 788 there is still enough floor area to sever the 2 TDRs. Councilman Myrin asked does that mean it is not built to maximum. Ms. Simon replied correct. There is still 879 square feet of floor area on the site. The TDRs remove 500. Mayor Skadron opened the public comment. 1. George Benninghoff said Amy addressed my concerns. I want the application to be clean. It is not. If the application is cleaned up I will have no objections. You won’t see me again if he is applying on his own property. I believe the additional language is not required. Mayor Skadron said we can’t litigate who owns the parcel. I’m hopeful the clarifications Amy made will not be included in the TDR restrictions or calculation. Mr. Benninghoff said I want the application to be clean and him to submit an accurate statement of his property. Mr. True said we are way beyond the application period. We’ve resolved this through litigation. We are not attempting to or suggesting the ability to amend the application as they have been filed prior to this time. We made modifications and I think council should move forward to this. I don’t think we can comply with Mr. Benninghoff’s request. I think the ordinance is written to address his concerns. The ordinance as written will not encumber this disputed area. That is what I have viewed Mr. Benninghoff’s request to be. Mr. Shoaf submitted documents that had a plat that was recorded that does included the disputed parcel. We cannot litigate or adjudicate the ownership of that. To address Mr. Benninghoff’s concerns was language in the ordinance that does not further encumber the property he alleges to own. Mr. Shoaf believes he has submitted the application for his property. Mayor Skadron closed the public comment. Councilman Myrin said what has changed is that the 785 square feet is not needed to calculate the TDRs. That is a key piece. The 785 is not encumbered. The 785 is no man’s land as far as council is concerned. Mr. True said that is what I tried to write. Councilman Myrin said I feel comfortable supporting it. Councilman Hauenstein said there is adequate space on the lot. Councilman Frisch moved to adopt Ordinance #10, Series of 2019; seconded by Councilman Hauenstein. Roll Call Vote. Councilmembers Frisch, yes; Hauenstein, yes; Myrin, yes; Mayor Skadron, yes. Motion carried. ORDINANCE #13, SEREIS OF 2019 – Transportation and Parking Land Use Code Amendments Phillip Supino, community development, said this ordinance contains minor amendments to transportation and parking management sections of the land use code. Improve some formatting and eliminate confusing terminology. None of the amendments change any development rights. Focused on definitions and accessibility standards. Better coordinated for off street and off site parking in regards to how it can be shared. Reference to removal or reconfiguration of parking has been removed since first reading. Councilman Myrin said page 130 limiting the need for redundant parking. If we are reducing the area of development consumed by parking does that change the requirement. Ms. Garrow said this defines what it means to have an accessory space. Councilman Myrin said 25% to be compact requirement. Ms. Garrow said it doesn’t change the number of spaces just the size. This will align the land use code with the engineering code. Mr. Supino said it is also a benefit to residents where there can be more open and green space on a parcel. 26 Regular Meeting Aspen City Council May 20, 2019 9 Mayor Skadron opened the public comment. There was none. Mayor Skadron closed the public comment. Councilman Hauenstein moved to adopt Ordinance #13, Series of 2019; seconded by Councilman Frisch. Roll call vote. Councilmembers Myrin, yes; Hauenstein, yes; Frisch, yes; Mayor Skadron, yes. Motion carried. Ms. Ott said we included the long range council schedule. Currently nothing is scheduled for work sessions until June 11th. Councilman Myrin said there are a few things we left on the table including affordable housing mitigation increase. We could work on an ordinance that reduces the ability of vested agreements to negotiate away their housing. Councilman Hauenstein said it makes sense we wait until the next council. Councilman Hauenstein moved to adjourn at 7:50 pm; seconded by Councilman Frisch. All in favor, motion carried. Linda Manning City Clerk 27 Page 1 of 3 MEMORANDUM TO:Mayor and City Council FROM:CJ Oliver, Environmental Health and Sustainability Director THROUGH:Jessica Garrow, Community Development Director MEETING DATE:June 10th, 2019, 5PM RE:Ordinance #14 Series of 2019- Banning the Sale of Flavored Tobacco and Nicotine Productsin Aspen UPDATES FROM PUBLIC HEARING: Ordinance #14, Series 2019 was passed at the Public Hearing during the regular City Council meeting on May 20th. Council passed the version of the ordinance that bans only the sale of flavored vaping liquids and does not include other flavored tobacco products such as menthol cigarettes and flavored chewing tobacco. Aspen City Council indicated that they may wish to reconsider this decision on June 10th when the full council is present. The following memo and attachments are from the May 20th meeting, should Council choose to reconsider the item. Members of the public who made comments at that meeting have been informed the item may be reconsidered and may be in attendance to provide public comment. SUMMARY: Youth tobacco and e-cigarette users are particularly attracted to flavored nicotine products. From the packaging and marketing of the products to the flavors themselves, they are geared towards youth and adolescents and they are the preferred product among younger users. Candy and fruit flavored cigarettes were banned by the Family Smoking Prevention and Tobacco Control Act in 2009 but menthol cigarettes, flavored chewing tobacco and e-cigarette cartridges/pods were not included in the ban and are available for purchase today. Restricting the sale of flavored nicotine products in Aspen would create an additional barrier for all users trying to obtain these products and couldplay a preventative role in youth picking up a tobacco or vaping habit. Aspen’s existing regulations, particularly raising the age to purchase tobacco/nicotine products to 21, along with a significant tax on tobacco and nicotine are also significant measures to decrease local accessibility to these items to our youth. STAFF RECOMMENDATION: Staff recommends approval of the proposed Ordinance, at the Public Hearing. 28 Page 2 of 3 BACKGROUND: During the March 12 th, 2019 work session with Aspen City Council, direction was providedto craft an ordinance that banned the sale of all flavored nicotine products in Aspen including vaping liquids, flavored cigarettes and cigars as well as flavored chewing tobacco. Additionally, Council directed staff to reach out to flavored tobacco retailers to let them know about the proposed ban on flavored products. Staff returned to Aspen City Council on May 6 th to update City Council on the results of the outreach efforts and request direction on how to move ahead based on the additional information. Several public health officials from state and local governments, local physicians, and school administrators spoke at the meeting in favor of a ban on the sale of flavored tobacco and nicotine products. Tobacco retailers in Aspen were resistant to the notion of a full flavored tobacco product ban due to the impact that it would have on their sales. The retailers did indicate that that they would support a vaping liquid ban. One of the retailers has proactively pulled vaping products from their shelves as a measure to protect youth health and another indicated that since the passing of Tobacco 21 in Aspen their sales of vaping products are low. DISCUSSION:Public health officials at the county and state levels encourage implementing a ban on all flavored nicotine products as it would provide the greatest level of public health protection. Officials from both Pitkin County and CDPHE have indicated that they support moving forward with a fullban because it also offers a stronger model for other communities to implement and it more thoroughly considers broader equity issues. Written comments from various interested parties who support a full ban on flavored nicotine products are provided as attachments to this memo. In brief, the information available on youth usage rates for e-cigarettes and tobacco use in the Aspen area show a concerning trend, and public health professionals want to take steps to get in front of this trend as soon as possible. Anecdotally, the change to Tobacco 21 has resulted in far fewer youths purchasing tobacco products in Aspen stores. This was a change that will have lasting positive results for the community, particularly youth. An additional action that could also make a difference is to restrict the sale of the items that are most desirable to youth consumers, the products that a significant majority of youth and young adult tobacco users report was their first tobacco or e-cigarette product -flavored tobacco and nicotine. There are still significant challenges related to restricting youth access to these products as they can be easily purchased online as well as being available in unincorporated areas of Pitkin County outside of the Aspen city limits. Pitkin County has indicated that they will begin to pursue similar restrictions to what Aspen currently has in place including Tobacco 21, retail tobacco licenses as well as potentially looking into a tobacco tax. A flavor ban in not currently on Pitkin County’s list for future actions. FINANCIAL/BUDGET IMPACTS: A full ban on all flavored tobacco will likely have a significant impact on tobacco sales at the retail level as described by the retailers that staff spoke with. That would also have a likely impact on tobacco sales tax dollars collected in Aspen, which will 29 Page 3 of 3 be used to help fund efforts for substance use and cessation programs along with mental health systems. NEXT STEPS: If Ordinance #14, Series 2019 enacting a ban on some or all flavored tobacco products, the ban will go into effect on 1/1/2020. Staff will work to ensure the community and businesses understands the ban and its implementation. Additionally, staff will return to council in the Summer of 2019 to present recommendations for the best uses for the tobacco tax dollars that have been collected through the City tax on tobacco and nicotine products. The recommendations will fit into the buckets that Aspen City Council identified as targets for these dollars when the local tax was passed. Those buckets include substance use prevention and cessation,as well as mental health. RECOMMENDED MOTION (ALL MOTIONS ARE PROPOSED IN THE AFFIRMATIVE): “I move to adoptOrdinance #14,Series of 2019, adopting a ban on flavored tobacco and nicotine products in the City of Aspen.” ATTACHMENTS: Attachment A- Ordinance#14Series 2019 Attachment B- Flavor Danger (Provided by Pitkin County Public Health) Attachment C-Written comments from Dr. Kim Scheuer Attachment D- Resolution on Flavored Tobacco Ban, Aspen Valley Hospital District Attachment E- Colorado School of Public Health Letter Attachment F- Public Health Partners Letter Attachment G- Letter from Aspen High School Attachment H- Letter from School District Nurse Attachment I- Letter From Mike Haisfield 30 ORDINANCE NO. 14 Series 2019) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ASPEN,COLORADO, AMENDING TITLE 13 OF THE MUNICIPAL CODE OF THE CITY OF ASPEN - HEALTH AND QUALITY OF ENVIRONMENT- TO ADD A NEW CHAPTER 13.26 ENTITLED: RESTRICTIONS ON THE SALE OF ELECTRONIC SMOKING DEVICE FLAVORING IN TOBACCO PRODUCT RETAIL ESTABLISHMENTS WHEREAS, Aspen area students report vaping rates among the highest in the nation. WHEREAS, 81% of youth who have ever used a tobacco product report that the first tobacco product was flavored. WHEREAS, flavored nicotine products promote youth initiation of tobacco use and help young occasional smokers to become daily smokers by reducing or masking the natural harshness and taste of tobacco smoke and thereby increasing the appeal of tobacco and nicotine products. WHEREAS, the full risk of vaping products is still largely unknown at this time. WHEREAS, the Centers for Disease Control and Prevention has reported a more than 800% increase in electronic cigarette use among middle school and high school students between 2011 and 2015. WHEREAS, nicotine solutions, which are consumed via electronic smoking devices such as electronic cigarettes, are sold in thousands of youth-appealing flavors, such as cotton candy and bubble gum. WHEREAS, the City Council finds that this ordinance furthers and is necessary for the promotion of the public health, safety, and welfare to reduce the appeal of tobacco to youth and to reduce the likelihood that youth will become tobacco users by prohibiting Tobacco Product Retailers from selling, offering for sale, or possessing with the intent to sell, flavored nicotine products. NOW THEREFORE,BE IT ORDAINED BY THE COUNCIL OF THE CITY OF ASPEN, COLORADO: Section 1. TITLE 13 OF THE MUNICIPAL CODE OF THE CITY OF ASPEN - HEALTH AND QUALITY OF ENVIRONMENT—IS HEREBY AMENDED TO ADD A NEW CHAPTER 13.26 ENTITLED: RESTRICTIONS ON THE SALE OF ELECTRONIC SMOKING DEVICE FLAVORING IN TOBACCO PRODUCT RETAIL ESTABLISHMENTS, WHICH CHAPTER SHALL READ AS FOLLOWS: 1 31 Chapter 13.26 RESTRICTIONS ON THE SALE OF ELECTRONIC SMOKING DEVICE FLAVORING IN TOBACCO PRODUCT RETAIL ESTABLISHMENTS Section 13.26.020 DEFINITIONS A. "Characterizing Flavor" means a Distinguishable taste or aroma or both, other than the taste or aroma of tobacco, imparted either prior to or during consumption of a Tobacco Product or any byproduct produced by the Tobacco Product. Characterizing flavors include,but are not limited to, tastes or aromas relating to any fruit, chocolate, vanilla, honey, candy, cocoa, dessert, alcoholic beverage,menthol,mint, wintergreen, herb, spice; provided,however,that a Tobacco Product shall not be determined to have a characterizing flavor solely because of the use of additives or flavorings or the provision of ingredient information. Rather, it is the presence of a Distinguishable taste or aroma or both, as described in the first sentence of this definition that constitutes a characterizing flavor. B. "Cigar"means any roll of tobacco other than a Cigarette wrapped entirely or in part in tobacco or any other substance containing tobacco. For purposes of this Chapter, cigar includes,but is not limited to tobacco products known or labeled as "cigar,""cigarillo," or"little cigar." C. "Cigarette" means any product that contains tobacco or nicotine that is intended to be burned or heated under ordinary conditions of use, and consists of or contains: 1) any roll of tobacco wrapped in paper or in any substance not containing tobacco; 2)tobacco in any form that is functional in the product, which,because of its appearance, the type of tobacco used in the filler, or its packaging or labeling, is likely to be offered to, or purchased by Consumers as a cigarette; or 3) any roll of tobacco wrapped in any substance containing tobacco that,because of its appearance, the type of tobacco used in the filler, or its packaging and labeling, is likely to be offered to, or purchased by, Consumers as a cigarette described above. 4)the term includes all "roll-your-own," i.e., any tobacco that, because of its appearance, type, packaging, or labeling, is suitable for use and likely to be offered to, or purchased by Consumers as tobacco for making cigarettes. D. "Constituent" means any ingredient, substance, chemical, or compound other than tobacco, water, or reconstituted tobacco sheet that is added by the manufacturer to a Tobacco Product, including an Electronic Smoking Device, during the processing,manufacture, or 2 32 packaging of the Tobacco Product, including an Electronic Smoking Device, that imparts a Characterizing Flavor. E. "Consumer"means an individual who purchases a Tobacco Product or Tobacco Paraphernalia for consumption and not for Sale to another. F. "Distinguishable" means perceivable by either the sense of smell or taste. G. "Electronic Smoking Device" means any product used by an individual to simulate smoking in the delivery of nicotine or any other substance, even if marketed as nicotine-free, through inhalation from the product. Electronic smoking device includes any refill, cartridge or component part of a product, whether or not marketed or sold separately. Electronic smoking device does not include any product that has been approved or certified by the United States Food and Drug Administration for sale as a tobacco cessation product or for other medically approved or certified purposes. H. "Establishment" means any store, stand,booth, concession or any other enterprise that Sells, offers for Sale, or does or offers to exchange for any form of consideration, Tobacco Products or Tobacco Paraphernalia including,but not limited to any retail location, stand, outlet, vehicle, cart, vending machine, structure or any grounds where Tobacco Products and/or Tobacco Paraphernalia are sold or offered for exchange. I. "Flavored Tobacco Product" means any Tobacco Product, including Electronic Smoking Device flavoring, that contains a Constituent or that imparts a Characterizing Flavor. J. "Ingredient"means any substance, chemical or compound, other than tobacco, water or reconstituted tobacco sheet that is added by the manufacturer to a tobacco product during the processing,manufacture or packing of the Tobacco Product. K. "Labeling" means written, printed, pictorial, or graphic matter upon any Tobacco Product or any of its Packaging. L. "License" means a Tobacco Product Retail License. M. "Manufacturer"means a Person, including any repacker or relabeler, who manufacturers, fabricates, assembles,processes, or labels a Tobacco Product; or imports a finished Tobacco Product for Sale or distribution into the United States. N. "Packaging" means a pack,box, carton, or container of any kind or, if no other container, any wrapping(including cellophane) in which a Tobacco Product(s) is sold or offered for Sale to a consumer. O. "Person" in this Chapter means any natural person,partnership, cooperative association, corporation, limited liability company, personal representative, receiver, trustee, assignee or other legal entity. P. "Sale or Sell" means any transfer, exchange,barter, gift, offer for sale, or distribution for a commercial purpose, in any manner, for any form of consideration or by any means whatsoever. 3 33 Q. "Tobacco Paraphernalia" means any item designed for the consumption, use, or preparation of Tobacco Products. R. "Tobacco Product" means: 1. any product which contains, is made or derived from tobacco or used to deliver nicotine, synthetic nicotine or other substances intended for human consumption, whether heated, chewed, absorbed, dissolved, inhaled, snorted, sniffed or ingested by any other means, including,but not limited to Cigarettes, Cigars, little Cigars, chewing tobacco,pipe tobacco, snuff,bidis, snus,mints,hand gels; and 2. an Electronic Smoking Device; 3. notwithstanding any provision of subsections 1. and 2., above to the contrary, Tobacco Product" includes any component,part, accessory or associated Tobacco Paraphernalia of a Tobacco Product whether or not sold separately. 4. The term"Tobacco Product"does not include: i) any product that contains marijuana; and ii) any product made from or derived from tobacco and approved by the Food and Drug Administration(FDA) for use in connection with cessation of smoking. S. "Tobacco Product Retailer"means any person who engages in the Sale of Tobacco Products and or Flavored Tobacco Products directly to the public from any store, stand,booth, concession, outlet, vehicle, cart, vending machine, structure or any grounds or any other enterprise that Sells, offers for Sale, or does or offers to exchange for any form of consideration. T. "Tobacco Product Retailing" means the act of selling, offering for sale or exchanging or offering to exchange for any form of consideration, Tobacco Products and or Flavored Tobacco Products. Section 13.26.030 SALE OR DISTRIBUTION OF ELECTRONIC SMOKING DEVICE OR CONSTITUENT THEREOF THAT IMPARTS OR CONTAINS A CHARACTERIZING FLAVOR PROHIBITED A.The Sale or distribution by a Tobacco Product Retailer of an Electronic Smoking Device that contains a Constituent or that imparts or contains a Characterizing Flavor, including any refill, cartridge or component part of a product, whether or not marketed or sold separately, is prohibited. B.A Tobacco Product Retailer, or any of the Tobacco Product Retailer's agents, or employees shall not sell, offer for sale or possess with the intent to sell an Electronic Smoking Device that contains a Constituent or that imparts or contains a Characterizing Flavor, including any refill, cartridge or component part of a product, whether or not marketed or sold separately. 4 34 C.There shall be a rebuttable presumption that an Electronic Smoking Device or a Constituent thereof imparts or contains a Characterizing Flavor if a Manufacturer or any of the Manufacturer's agents or employees, in the course of their agency or employment, has made a statement or claim directed to Consumers or to the public that the Electronic Smoking Device or a Constituent thereof has or produces a Characterizing Flavor, including,but not limited to,text, color; and/or images on the product's Labeling or Packaging that are used to explicitly or implicitly communicate that the Electronic Smoking Device or a Constituent thereof has a Characterizing Flavor. D. There shall be a rebuttable presumption that a Tobacco Product Retailer in possession of four or more Electronic Smoking Devices or Constituents thereof that imparts or contains a Characterizing Flavor, including any refill, cartridge or component part of a product, whether or not marketed or sold separately, including but not limited to individual products,packages of products, or any combination thereof,possesses such Electronic Smoking Devices or Constituents thereof with the intent to Sell or offer said products for Sale. Section 13.26.040 COMPLIANCE MONITORING A. Enforcement of this Chapter shall be monitored by the local police department and the City of Aspen Environmental Health Department. B. All Tobacco Product Retailers shall be subject to a compliance check for adherence to the provisions of this Chapter at least twice a year with violators being checked more frequently until two (2) consecutive checks are completed without a violation. Section 13.26.050 VIOLATIONS, PENALTIES AND FINES. A. Licensee Penalties and Fines. In addition to any other penalty authorized by law, if the City of Aspen Municipal Court determines,based on the evidence, that a Tobacco Product Retail Licensee, or any of the Licensee's agents or employees, has violated any of the requirements, conditions, or prohibitions of this Chapter, or has pleaded guilty, "no contest" or its equivalent, or admitted to a violation of any law related to the Sale of Electronic Smoking Devices or Constituent thereof as set forth herein the following penalties shall be imposed on the Licensee: 1.Upon the first violation, a penalty of five hundred dollars ($500) 2. Upon the second violation within thirty-six (36)months, a penalty of one thousand five hundred dollars ($1500). 3.Upon the third violation within thirty-six (36)months, court appearance shall be mandatory, and the Court may issue a penalty of up to the maximum amount allow by law or imprisonment for a period of up to one(1) year or both such fine and imprisonment at the discretion of the court. 4. Each day of violation constitutes a separate offense. 5 35 B. Suspension or Revocation of Tobacco Product Retail License. In addition to the penalties set forth about, the City of Aspen may suspend or revoke a Tobacco Product Retailer license issued pursuant to Chapter 13.25,pursuant to the terms set forth in such Chapter 13.25. A Tobacco Product Retailer whose License has been suspended or revoked pursuant to Chapter 13.25: 1. Shall not display Tobacco Products in public view during the time when the License is suspended or revoked; and 2.Advertisements related to Tobacco Products that promote the sale or distribution of said products from the location that could lead a reasonable person to believe that such products can be obtained from the location shall not be displayed. C. Remedies Cumulative. Remedies provided by this Chapter are cumulative and in addition to any other remedies available at law or in equity. In addition to the remedies provided by this Chapter or by any other law, any violation of this Chapter may be remedied by a civil action,brought by the City Attorney including,but not limited to injunctive relief. D. Causing, permitting, aiding, abetting or concealing a violation of any provision of this Chapter shall cause the offender to be subject to the penalties set forth herein or in the Aspen Municipal Code. Section 13.26.070 NO CONFLICT WITH FEDERAL OR STATE LAW. Nothing in this Chapter shall be interpreted or applied so as to create any requirement, power, or duty that is preempted by federal or state law. Section 2: Litigation This ordinance shall not affect any existing litigation and shall not operate as an abatement of any action or proceeding now pending under or by virtue of the ordinances repealed or amended as herein provided, and the same shall be conducted and concluded under such prior ordinances. Section 3: Severability If any section, subsection, sentence, clause,phrase, or portion of this ordinance is for any reason held invalid or unconstitutional in a court of competent jurisdiction, such portion shall be deemed a separate, distinct and independent provision and shall not affect the validity of the remaining portions thereof. The City Clerk is directed, upon the adoption of this ordinance, to record a copy of this ordinance in the office of the Pitkin County Clerk and Recorder. 6 36 f Section 4: Effective Date. This Ordinance shall become effective as of January 1, 2020 and in full force and effect on and after that date. Section 5: Public Hearin A public hearing on the ordinance shall be held on the 20th day of May 2019 in the City Council Chambers, Aspen City Hall, Aspen, Colorado, seven(7) days prior to which hearing a public notice of the same was published pursuant to the Aspen Municipal Charter. INTRODUCED,READ AND ORDERED PUBLISHED as provided y law,by t City Council of the City of Aspen on the 13th day of May 2019. Steve Skad n, Mayor ATfPEST: inda Manning, City Clerk FINALLY, adopted,passed and approved this 20th day of May 2019. l Steven Skadro , Mayor ATTEST: Linda Manning, City Clerk APPROVED AS TO FORM: es R. True, City Attorney 7 37 1 ORDINANCE NO. 14 (Series 2019) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO, AMENDING TITLE 13 OF THE MUNICIPAL CODE OF THE CITY OF ASPEN - HEALTH AND QUALITY OF ENVIRONMENT - TO ADD A NEW CHAPTER 13.26 ENTITLED: RESTRICTIONS ON THE SALE OF FLAVORED TOBACCO PRODUCTS, INCLUDING MENTHOL, IN TOBACCO PRODUCT RETAIL ESTABLISHMENTS WHEREAS, each day, about 2,500 children in the United States try their first cigarette; and another 8,400 children under 18 years of age become new regular, daily smokers. WHEREAS, 81% of youth who have ever used a tobacco product report that the first tobacco product was flavored. WHEREAS, flavored tobacco products promote youth initiation of tobacco use and help young occasional smokers to become daily smokers by reducing or masking the natural harshness and taste of tobacco smoke and thereby increasing the appeal of tobacco products. WHEREAS, menthol cools and numbs the throat to reduce throat irritation and make the smoke feel smoother, making menthol cigarettes an appealing option for youth who are initiating tobacco use. WHEREAS,flavorings such as mint and wintergreen in smokeless tobacco products encourage new users to start with milder flavors and progress to more full-bodied, less flavored products. WHEREAS, young people are much more likely than adults to use menthol-, candy- and fruit-flavored tobacco products, including not just cigarettes but also cigars, cigarillos, and hookah tobacco. WHEREAS, the Centers for Disease Control and Prevention has reported a more than 800% increase in electronic cigarette use among middle school and high school students between 2011and 2015. WHEREAS, nicotine solutions, which are consumed via electronic smoking devices such as electronic cigarettes, are sold in thousands of youth-appealing flavors, such as cotton candy and bubble gum. WHEREAS, the City Council finds that this ordinance furthers and is necessary for the promotion of the public health, safety, and welfare to reduce the appeal of tobacco to youth and to reduce the likelihood that youth will become tobacco users by prohibiting Tobacco Product Retailers from selling, offering for sale, or possessing with the intent to sell, flavored tobacco products. 38 2 NOW THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF ASPEN, COLORADO: Section 1. TITLE 13 OF THE MUNICIPAL CODE OF THE CITY OF ASPEN - HEALTH AND QUALITY OF ENVIRONMENT – IS HEREBY AMENDED TO ADD A NEW CHAPTER 13.26 ENTITLED: RESTRICTIONS ON THE SALE OF FLAVORED TOBACCO PRODUCTS, INCLUDING MENTHOL, IN TOBACCO PRODUCT RETAIL ESTABLISHMENTS, WHICH CHAPTER SHALL READ AS FOLLOWS: Chapter 13.26 RESTRICTIONS ON THE SALE OF FLAVORED TOBACCO PRODUCTS, INCLUDING MENTHOL, IN TOBACCO PRODUCT RETAIL ESTABLISHMENTS Section 13.26.020 DEFINITIONS A. "Characterizing Flavor"means a Distinguishable taste or aroma or both, other than the taste or aroma of tobacco, imparted either prior to or during consumption of a Tobacco Product or any byproduct produced by the Tobacco Product. Characterizing flavors include, but are not limited to, tastes or aromas relating to any fruit, chocolate, vanilla, honey, candy, cocoa, dessert, alcoholic beverage, menthol, mint, wintergreen, herb, spice; provided, however, that a Tobacco Product shall not be determined to have a characterizing flavor solely because of the use of additives or flavorings or the provision of ingredient information. Rather, it is the presence of a Distinguishable taste or aroma or both, as described in the first sentence of this definition that constitutes a characterizing flavor. B. “Cigar” means any roll of tobacco other than a Cigarette wrapped entirely or in part in tobacco or any other substance containing tobacco. For purposes of this Chapter, cigar includes, but is not limited to tobacco products known or labeled as “cigar,” “cigarillo,” or “little cigar.” C. “Cigarette”means any product that contains tobacco or nicotine that is intended to be burned or heated under ordinary conditions of use, and consists of or contains: 1)any roll of tobacco wrapped in paper or in any substance not containing tobacco; 2)tobacco in any form that is functional in the product, which, because of its appearance, the type of tobacco used in the filler, or its packaging or labeling, is likely to be offered to, or purchased by Consumers as a cigarette; or 39 3 3)any roll of tobacco wrapped in any substance containing tobacco that, because of its appearance, the type of tobacco used in the filler, or its packaging and labeling, is likely to be offered to, or purchased by, Consumers as a cigarette described above. 4)the term includes all “roll-your-own,” i.e., any tobacco that, because of its appearance, type, packaging, or labeling, is suitable for use and likely to be offered to, or purchased by Consumers as tobacco for making cigarettes. D. "Constituent"means any ingredient, substance, chemical, or compound other than tobacco, water, or reconstituted tobacco sheet that is added by the manufacturer to a Tobacco Product during the processing, manufacture, or packing of a Tobacco Product. E. “Consumer”means an individual who purchases a Tobacco Product or Tobacco Paraphernalia for consumption and not for Sale to another. F. "Distinguishable"means perceivable by either the sense of smell or taste. G. “Electronic Smoking Device”means any product containing or delivering nicotine intended for human consumption that can be used by an individual to simulate smoking in the delivery of nicotine or any other substance, even if marketed as nicotine-free, through inhalation from the product. Electronic smoking device includes any refill, cartridge or component part of a product, whether or not marketed or sold separately. Electronic smoking device does not include any product that has been approved or certified by the United States Food and Drug Administration for sale as a tobacco cessation product or for other medically approved or certified purposes. H. “Establishment"means any store, stand, booth, concession or any other enterprise that Sells, offers for Sale, or does or offers to exchange for any form of consideration, Tobacco Products or Tobacco Paraphernalia including, but not limited to any retail location, stand, outlet, vehicle, cart, vending machine, structure or any grounds where Tobacco Products and/or Tobacco Paraphernalia are sold or offered for exchange. I. "Flavored Tobacco Product"means any Tobacco Product, including Cigarettes, that contains a Constituent or that imparts a Characterizing Flavor. J. “Ingredient” means any substance, chemical or compound, other than tobacco, water or reconstituted tobacco sheet that is added by the manufacturer to a tobacco product during the processing, manufacture or packing of the Tobacco Product. K. "Labeling"means written, printed, pictorial, or graphic matter upon any Tobacco Product or any of its Packaging. L. “License”means a Tobacco Product Retail License. M. “Manufacturer” means a Person, including any repacker or relabeler, who manufacturers, fabricates, assembles, processes, or labels a Tobacco Product; or imports a finished Tobacco Product for Sale or distribution into the United States. 40 4 N. "Packaging"means a pack, box, carton, or container of any kind or, if no other container, any wrapping (including cellophane) in which a Tobacco Product(s) is sold or offered for Sale to a consumer. O. “Person”in this Chapter means any natural person, partnership, cooperative association, corporation, limited liability company, personal representative, receiver, trustee, assignee or other legal entity. P. “Sale or Sell”means any transfer, exchange, barter, gift, offer for sale, or distribution for a commercial purpose, in any manner, for any form of consideration or by any means whatsoever. Q. “Tobacco Paraphernalia”means any item designed for the consumption, use, or preparation of Tobacco Products. R. “Tobacco Product”means: 1. any product which contains, is made or derived from tobacco or used to deliver nicotine, synthetic nicotine or other substances intended for human consumption, whether heated, chewed, absorbed, dissolved, inhaled, snorted, sniffed or ingested by any other means, including, but not limited to Cigarettes, Cigars, little Cigars, chewing tobacco, pipe tobacco, snuff, bidis, snus, mints, hand gels; and 2. an Electronic Smoking Device; 3. notwithstanding any provision of subsections (1) and 2) above to the contrary, “Tobacco Product” includes any component, part, accessory or associated Tobacco Paraphernalia of a Tobacco Product whether or not sold separately. 4. The term “Tobacco Product” does not include: (i)any product that contains marijuana; and (ii)any product made from or derived from tobacco and approved by the Food and Drug Administration (FDA) for use in connection with cessation of smoking. S. “Tobacco Product Retailer”means any person who engages in the Sale of Tobacco Products and or Flavored Tobacco Products directly to the public from any store, stand, booth, concession, outlet, vehicle, cart, vending machine, structure or any grounds or any other enterprise that Sells, offers for Sale, or does or offers to exchange for any form of consideration. T. “Tobacco Product Retailing” means the act of selling, offering for sale or exchanging or offering to exchange for any form of consideration, Tobacco Products and or Flavored Tobacco Products. Section 13.26.030 SALE OR DISTRIBUTION OF FLAVORED TOBACCO PRODUCTS PROHIBITED. 41 5 A.The Sale or distribution by a Tobacco Product Retailer of a Flavored Tobacco Product(s) is prohibited. B. A Tobacco Product Retailer, or any of the Tobacco Product Retailer’s agents, or employees shall not sell, offer for sale or possess with the intent to sell a Flavored Tobacco Product(s). C.There shall be a rebuttable presumption that a Tobacco Product is presumed to be a Flavored Tobacco Product if a Manufacturer or any of the Manufacturer's agents or employees, in the course of their agency or employment, has made a statement or claim directed to Consumers or to the public that the Tobacco Product has or produces a Characterizing Flavor, including, but not limited to, text, color; and/or images on the product's Labeling or Packaging that are used to explicitly or implicitly communicate that the Tobacco Product has a Characterizing Flavor. D.There shall be a rebuttable presumption that a Tobacco Product Retailer in possession of four or more Flavored Tobacco Products, including but not limited to individual Flavored Tobacco Products, packages of Flavored Tobacco Products, or any combination thereof, possesses such Flavored Tobacco Products with the intent to Sell or offer said products for Sale. Section 13.26.040 COMPLIANCE MONITORING A. Enforcement of this Chapter shall be monitored by the local police department and the City of Aspen Environmental Health Department. B.All Tobacco Product Retailers shall be subject to a compliance check for adherence to the provisions of this Chapter at least twice a year with violators being checked more frequently until two (2) consecutive checks are completed without a violation. Section 13.26.050 VIOLATIONS, PENALTIES AND FINES. A. Licensee Penalties and Fines. In addition to any other penalty authorized by law, if the City of Aspen Municipal Court determines based on the evidence, that a Tobacco Product Retail Licensee, or any of the Licensee’s agents or employees, has violated any of the requirements, conditions, or prohibitions of this Chapter, or has pleaded guilty, “no contest” or its equivalent, or admitted to a violation of any law related to the Sale of Flavored Tobacco Products the following penalties shall be imposed on the Licensee: 1.Upon the first violation, a penalty of five hundred dollars ($500) 2.Upon the second violation within thirty-six (36)months, a penalty of one thousand five hundred dollars ($1500). 3.Upon the third violation within thirty-six (36)months, court appearance shall be mandatory, and the Court may issue a penalty of up to the maximum amount allow by 42 6 law or imprisonment for a period of up to one (1) year or both such fine and imprisonment at the discretion of the court. 4. Each day of violation constitutes a separate offense. B. Suspension or Revocation of Tobacco Product Retail License. In addition to the penalties set forth about, the City of Aspen may suspend or revoke a Tobacco Product Retailer license issued pursuant to Chapter 13.25, pursuant to the terms set forth in such Chapter 13.25. A Tobacco Product Retailer whose License has been suspended or revoked pursuant to Chapter 13.25: 1.Shall not display Flavored Tobacco Products in public view during the time when the License is suspended or revoked; and 2.Advertisements related to Flavored Tobacco Products that promote the sale or distribution of said products from the location that could lead a reasonable person to believe that such products can be obtained from the location shall not be displayed. C. Remedies Cumulative. Remedies provided by this Chapter are cumulative and in addition to any other remedies available at law or in equity. In addition to the remedies provided by this Chapter or by any other law, any violation of this Chapter may be remedied by a civil action, brought by the City Attorney including, but not limited to injunctive relief. D. Causing, permitting, aiding, abetting or concealing a violation of any provision of this Chapter shall cause the offender to be subject to the penalties set forth herein or in the Aspen Municipal Code. Section 13.26.070 NO CONFLICT WITH FEDERAL OR STATE LAW. Nothing in this Chapter shall be interpreted or applied so as to create any requirement, power, or duty that is preempted by federal or state law. Section 2: Litigation This ordinance shall not affect any existing litigation and shall not operate as an abatement of any action or proceeding now pending under or by virtue of the ordinances repealed or amended as herein provided, and the same shall be conducted and concluded under such prior ordinances. Section 3: Severability If any section, subsection, sentence, clause, phrase, or portion of this ordinance is for any reason held invalid or unconstitutional in a court of competent jurisdiction, such portion shall be deemed a separate, distinct and independent provision and shall not affect the validity of the remaining portions thereof. 43 7 The City Clerk is directed, upon the adoption of this ordinance, to record a copy of this ordinance in the office of the Pitkin County Clerk and Recorder. Section 4: Effective Date. This Ordinance shall become effective as of January 1, 2020 and in full force and effect on and after that date. Section 5: Public Hearing A public hearing on the ordinance shall be held on the 20th day of May 2019 in the City Council Chambers, Aspen City Hall, Aspen, Colorado, seven (7) days prior to which hearing a public notice of the same was published pursuant to the Aspen Municipal Charter. INTRODUCED, READ AND ORDERED PUBLISHED as provided by law, by the City Council of the City of Aspen on the 13th day of May 2019. _______________________ Steven Skadron, Mayor ATTEST: _____________________________ Linda Manning, City Clerk FINALLY,adopted, passed and approved this ___ day of ____, 2019. _______________________ Steven Skadron, Mayor ATTEST: _______________________ Linda Manning, City Clerk APPROVED AS TO FORM: __________________________ James R. True, City Attorney 44 FLAVOR DANGER Today, tobacco products come in hundreds of fruit flavors such as little cigars, chewing tobacco, hookah tobacco, or liquids for e-cigarettes. Flavors do not reduce the harm of tobacco products. In fact, flavors can mask the harsh taste of tobacco, making it easier to get hooked on nicotine. Once-Secret Tobacco Industry Documents Reveal Youth Are Targeted With Flavors · “It's a well known fact that teenagers like sweet products…”1 · “New users of smokeless tobacco ... are most likely to begin with products that are milder tasting, more flavored…”2 · “Menthol brands have been said to be good starter products because new smokers appear to know that menthol covers up some of the tobacco taste and they already know what menthol tastes like, vis-à-vis candy”3 Flavored Tobacco Products Attracting (and Addicting) Youth and Young Adults · At least two-thirds of youth tobacco users report using tobacco products “because they come in flavors I like .” 4 · Of teens and young adults who ever used tobacco, 81% of teens and 86% of young adults reported that their first product was flavored.4 Local E-Cigarette Use · Regular use of e-cigarettes among high school students has more than doubled from 21% to 45%.6 · More than 2/3 of high school seniors and 1/5 of 8th graders have tried e-cigarettes.6 · Colorado has the highest rates of e-cigarette use among youth in the nation, and the Roaring Fork Valley has some of the highest rates in in the state. 6 7 · Youth who use e-cigarettes are 4x more likely to pick up cigarettes. Aspen HAS seen an increase in cigarette use among high school students from 2015 to 2017.6 8 Current Youth Use of Flavored Tobacco · More than two-thirds of high school e-cigarette users are using flavored e-cigarettes.5 · 51% of youth e-cigarette use is mint or menthol.5 · 81% of youth who ever tried tobac- co chose flavored tobacco as their first tobacco product.5 45 Citations and References 1: SWAT (Students Working Against Tobacco) Florida Tobacco Industry Quotes and Facts Related to Flavor Tobacco http://swatflorida.com/uploads/fightresource/Flavored%20Tobacco%20Industry%20Quotes%20and%20Facts.pdf 2: SWAT (Students Working Against Tobacco) Florida Tobacco Industry Quotes and Facts Related to Flavor Tobacco http://swatflorida.com/uploads/fightresource/Flavored%20Tobacco%20Industry%20Quotes%20and%20Facts.pdf 3: Tobacco Control, January 2011, Menthol cigarettes and smoking initiation: a tobacco industry perspective https://tobaccocontrol.bmj.com/content/tobaccocontrol/20/Suppl_2/ii12.full.pdf 4: Ambrose, BK, et al., “Flavored Tobacco Product Use Among US Youth Aged 12-17 Years, 2013-2014,” JAMA. 2015;314(17):1871-1873. 5: National Youth Tobacco Survey, 2018. 6: Healthy Kids Colorado Survey, 2017. 7: U.S. Food and Drug Administration (FDA) 2018 NYTS Data: A Startling Rise in Youth E-cigarette Use https://www.fda.gov/TobaccoProducts/PublicHealthEducation/ProtectingKidsfromTobacco/ucm625887.htm 8: Healthy Kids Colorado Survey, 2015. 9: Flavored Tobacco Products, Counter Tobacco https://countertobacco.org/resources-tools/evidence-summaries/flavored- tobacco-products/ 10: Farley SM, Johns M. New York City flavoured tobacco product sales ban evaluation. Tobacco Control 2017;26:78-84. 11: States and Localities with Flavored Tobacco Restrictions, Campaign for Tobacco-Free Kids, 2019. Flavor Danger Fact Sheet, Updated January 2019 Federal Law on Flavored Tobacco Candy and fruit-flavored cigarettes were banned under the Family Smoking Prevention and Tobacco Control Act in 2009. However, all of the products shown below, including menthol cigarettes, non -cigarette smoked tobacco products and smokeless products, were not included in the ban. Impact of Flavored Tobacco Restrictions · The 2009 Family Smoking Prevention and Tobacco Control Act ban on flavored cigarettes was associat- ed with a 17% reduction in the probability of middle and high school youth becoming smokers and a 58% reduction in cigarettes smoked by current youth smokers.9 · In 2009, New York City passed a law restricting the sale of most flavored tobacco. By 2013, product sales decreased by 87%.10 Communities with Flavored Tobacco Restrictions Two states and over 180 communities have passed restrictions on the sale of flavored tobacco products (laws differ according to product and store type).11 What the City of Aspen Can Do Pass a comprehensive policy restricting the sale of all flavored tobacco products. · Restrict all flavors, including mint and menthol, for all types of tobacco products, including e-cigarettes · Restrict at all access points, including general stores and adult-only retailers. For more information contact Risa Turetsky Pitkin County Public Health (970) 618-1781 46 April 30, 2019 To: CJ Oliver City Council cjoliver@cityofaspen.com Regarding: Banning Flavored Tobacco Products Dear CJ Oliver and the Members of the City Council, I was asked to write you about any comments I may have on the proposal to ban flavored tobacco products in the City Of Aspen. As you may be aware, flavored tobacco products are marketed towards children to get them addicted at a young age. Unfortunately, children are particularly susceptible to the damages of tobacco; cancers including lung, tongue, mouth, throat, esophagus, pancreas, in addition to hypertension, strokes, heart disease, emphysema, chronic bronchitis, frequent colds, cavities etc. Children are also more vulnerable to the current marketing strategies used to sell products. Flavors do not mask the harms of tobacco but rather make the products less harsh so they can become easier to use more frequently. In fact, research shows, many children would not use nicotine products if it weren’t for the availability of tobacco in flavors they liked. Unfortunately, the children of The Roaring Fork Valley and Aspen are not immune to this and we have seen a significant increase in tobacco users over the last several years. This includes tobacco in the forms of vaping and of cigarette use. This is a health issue that is influenced by greed and disregard of public health. And it targets our most vulnerable citizens. Other cities have successfully banned flavored tobacco products resulting in a decrease in use among youth. Aspen should too. Sincerely yours, Kim Scheuer, MD Board Certified Family Practice, Board Certified Lifestyle Medicine, www.dokslifestylemedicine.com 970 309 8528 47 48 May 1, 2019 Dear Aspen City Council: Thank you for considering legislation that will provide further protections for Aspen youth from the harms of tobacco use and for, once again, providing a model policy for the rest of Colorado. The vaping epidemic seen across our state has drawn attention to the issue of flavored tobacco products and how flavors are used to hook kids on nicotine and create lifetime nicotine addicts and customers. Below we have provided information that we believe is compelling enough for the Aspen City Council to accept nothing less than a full ban on all flavored tobacco products. There is simply no other way to protect all youth from this dangerous and deadly addiction. Vaping • More than two-thirds (67.8 percent) of high school e-cigarette users are using flavored e- cigarettes. 1 • JUUL says it is committed to preventing youth use of its products but the company’s 80-plus lobbyists in 50 states are fighting proposals to ban flavored e-cigarette pods, which are big draws for teenagers; pushing legislation that includes provisions denying local governments the right to adopt strict vaping controls; and working to make sure that bills to discourage youth vaping do not have stringent enforcement measures.2 • Colorado has the highest e-cigarette use in the country and Health Region 12 (which includes Aspen) is among the top in the state.3,4 Menthol Cigarettes • Cigarette smoking causes more than 480,000 deaths each year in the United States. This is nearly one in five deaths.5 • It is estimated that 91,000 kids now under 18 and alive in Colorado will ultimately die prematurely from smoking.6 • Federal law prohibits the use of characterizing flavorings in cigarettes, except for menthol. 1 FDA 2018 2 NYTimes.com: In Washington, Juul Vows to Curb Youth Vaping. Its Lobbying in States Runs Counter to That Pledge.https://nyti.ms/2V27I26 3U.S. Food and Drug Administration (FDA) 2018 NYTS Data: A Startling Rise in Youth E-cigarette Use https://www.fda.gov/TobaccoProducts/PublicHealthEducation/ProtectingKidsfromTobacco/ucm625887.htm 4 Healthy Kids Colorado Survey, 2015 5 https://www.cdc.gov/tobacco/data_statistics/fact_sheets/health_effects/effects_cig_smoking/index.htm 6 The Health Consequences of Smoking: 50 Years of Progress. A Report of the Surgeon General, 2014 49 • Menthol cigarette smoking is more prevalent among smokers who are young7, female 8, part of a sexual minority 9, or part of a racial or ethnic minority 10. There is also significant menthol use among smokers with mental illness.11 • African-American smokers predominantly use menthol cigarettes. Nearly 9 in 10 African- American smokers (88.5 percent) aged 12 and older use menthol.6 • Tobacco companies have long known of menthol’s ability to mask the harshness associated with cigarette smoke, increase the ease of smoking, and provide a cooling sensation that appeals to many smokers, particularly new smokers.12 • Older industry marketing documents openly discuss the use of flavoring agents in cigarettes to attract the interest of young smokers.12 7 Giovino GA, Villanti AC, Mowery PD, et al. Differential trends in cigarette smoking in the USA: is menthol slowing progress? Tobacco control. 2015;24(1):28-37. 8 Caraballo RS, Asman K. Epidemiology of menthol cigarette use in the United States. Tobacco induced diseases. 2011;9 Suppl 1:S1. 9 Fallin A, Goodin AJ, King BA. Menthol cigarette smoking among lesbian, gay, bisexual, and transgender adults. American journal of preventive medicine. 2015;48(1):93-97 10 Rock VJ, Davis SP, Thorne SL, Asman KJ, Caraballo RS. Menthol cigarette use among racial and ethnic groups in the United States, 2004-2008. Nicotine & tobacco research : official journal of the Society for Research on Nicotine and Tobacco. 2010;12 Suppl 2:S117-124. 11 Hickman NJ, 3rd, Delucchi KL, Prochaska JJ. Menthol use among smokers with psychological distress: findings from the 2008 and 2009 National Survey on Drug Use and Health. Tobacco control. 2014;23(1):7-13. 12 US Surgeon General’s Report, March 8, 2012 50 Other Flavored Tobacco Products • Nearly 81 percent of youth ages 12 to 17 who had ever used a tobacco product reported that the first product they used was flavored.13 • Four of out five youth who were current tobacco product users reported they used a flavored tobacco product.12 • Youth use of flavored hookah products is even higher than youth use of flavored e-cigarettes.14 Older industry marketing documents openly discuss the use of flavoring agents in cigarettes to attract the interest of young smokers • FDA has proposed some restrictions on flavored tobacco products but they are not comprehensive (e.g. exclude menthol) and will likely take years to implement. Therefore local policy is critical for protecting youth. Based on the information above, only a comprehensive flavor ban (that includes all tobacco products) would protect all youth from the predatory practices of big tobacco and e-cigarette manufacturers and their youth-friendly products. 13 https://truthinitiative.org/news/hookah-most-popular-flavored-tobacco-product-among-youth 14 Source: Ambrose BK, Day HR, Rostron B, et al. Flavored Tobacco Product Use Among US Youth Aged 12-17 Years, 2013-2014. Jama. 2015;314(17):1871-1873. 51 Thank you again for taking this important step to protect Colorado’s youth. For more information, please contact the Colorado School of Public Health’s Tobacco Program at 303-724-4236. Sincerely, Jonathan M. Samet, MD, MS Dean and Professor Colorado School of Public Health Cerise Hunt, PhD, MSW Director Center for Public Health Practice Colorado School of Public Health Tracy Doyle, MPH Technical Assistance Coordinator Center for Public Health Practice Colorado School of Public Health 52 WWW.TOBACCOFREEKIDS.ORG April 29, 2019 Mayor Skadron & Aspen Councilmembers, Thank you for leading the way in protecting Colorado’s kids by considering legislation to ban the sale of flavored tobacco in Aspen. Prohibiting the sale of flavored tobacco, including menthol cigarettes, is an important step in protecting Aspen’s children from the unrelenting efforts of the tobacco industry to hook them to a deadly addiction. As you are aware, Aspen is the first community in Colorado to consider such legislation. The policy you adopt has the potential to be modeled across the state and therefore carries a great deal of weight. I ask that you consider the policy implications for all of Colorado as you debate the provisions of a flavor ban in Aspen. Nationally, more than two states and 180 communities have passed restrictions on the sale of flavored tobacco. San Francisco banned the sale of all flavored tobacco products with no retailer exemptions, in 2018. Sacramento is on the verge of doing the same. This is the policy that we support and recommend Aspen adopts for the following reasons: In recent years, there has been an explosion of sweet-flavored tobacco products, especially e-cigarettes and cigars.These products are available in a wide assortment of flavors that seem like they belong in a candy store or ice cream parlor –like gummy bear, cotton candy, wild berry and lemonade. The tobacco industry has a long history of using menthol cigarettes and other flavored products as “starter” product to attract new users, almost all of whom are under 18. Flavors improve the taste and reduce the harshness of tobacco products, making them more appealing and easier for beginners. A government study found that 81 percent of kids who have ever used tobacco products started with a flavored product. In Colorado, more than a quarter of high school students use e-cigarettes, one of the highest rates in the country. According to national data, 97 percent of high school e-cigarette users have used a flavored e-cigarette in the past month.53 WWW.TOBACCOFREEKIDS.ORG Among youth who smoke, more than half are smoking menthol cigarettes. Tobacco industry marketing, advertising, and promotional strategies for menthol cigarettes are often directed at low-income and minority communities, in addition to youth. The tobacco industry spends $140 million annually in Colorado to market its products. We must stay vigilant in protecting Colorado’s kids from the tobacco industry’s outreach and efforts to addict them. This policy will have a positive impact on public health and will save lives. Our organization works within the United States and around the world to advocate for public policies proven to prevent kids from using tobacco, help tobacco users quit and protect everyone from secondhand smoke. A ban on flavored tobacco products is just such a policy that will protect kids and save lives. For more information about our policy priorities, please visit our website, www.tobaccofreekids.org. If you have any questions, please feel free to contact me directly. Thank you again for your leadership and partnership to protect Aspen’s kids. Respectfully, Jodi L. Radke Regional Director Campaign for Tobacco-Free Kids 970-214-4808 jradke@tobaccofreekids.org Rebecca Dubroff State Government Relations Director American Heart Association 1777 S. Harrison St. | Denver | CO | 80210 M 303.880.7788 54 ASPEN HIGH SCHOOL 0235 HIGH SCHOOL ROAD ASPEN, COLORADO 81611 970-429-3539 May 3, 2019 Dear Aspen City Council, Vaping has rapidly become a national problem for teens, and our valley is seeing the impacts of vaping as more young people become addicted. Big tobacco has targeted youth through the allure of flavors; kids do not have to suffer the awful taste of regular cigarettes. Instead, they can ingest the equivalent of one pack of cigarettes per Juul pod in enticing flavors like cotton candy. Parents, students, and educators are worried about the effects of vaping on our community’s youth. We are so grateful that in Aspen you must be 21 to purchase tobacco, but we need to go a step further. Our kids are getting addicted quickly, and realizing, too late, how harmful vaping is, and how difficult it is to stop. A flavor ban, already instituted at Local’s Corner and the AABC Conoco, would help to combat the allure of vaping. AHS has participated in conversations with community and school partners, including our students, from here to Rifle. Our valley has one of the highest tobacco use rates in the state, and vaping is the number one reported substance used at AHS. Our students are clear about what needs to happen: all stores need to be 21 and over for tobacco products, and all stores need to implement a flavor ban. The best way to stop vaping is to never start. Sincerely, Tharyn Mulberry, Principal AHS Sarah Strassburger, Assistant Principal AHS Sarah Strassburger Aspen High School sstrassburger@aspenk12.net 970-925-3760 x1132 55 May 2, 2019 To: CJ Oliver cjoliver@cityofaspen.com Regarding: Flavored Tobacco Products Dear Aspen City Council Members, As the School Nurse of the Aspen School District, I am writing to express my very strong support of the proposal to ban the sale of flavored tobacco products in the City of Aspen. In the school environment, we are teaching, encouraging and practicing healthy behavior choices on a daily basis. We do this with the hope of preventing unhealthy habits and substance addictions in our youth. It is most concerning that products are created and marketed specifically toward adolescents and young adults that have the ability to cause lifelong addiction challenges and the potential for major negative health consequences. A review of current data and literature clearly shows that flavored products increase the sale and usage of tobacco at a younger age. I believe that it is the responsibility of our school and community leaders to create barriers, provide education and make appropriate policy decisions around creating a healthful community at large. Respectfully, Elise Dreher, BSN RN Aspen School District School Nurse 56 To City Council members, My name is Michael Haisfield, and I have been the owner and operator of the Aspen Store convenience store in town since 1996? The Aspen Store employs 20 full and part time employees, and we are one of only two businesses in town that sells tobacco products. I would like to speak about the City Council’s proposal to ban all flavored, mint and menthol tobacco products. I have talked to members of council and the general public and my impression is this has all started in order to protect our youth. In my opinion, vaping and e-cigs are the issue with young adults not the other tobacco products. This ban is imposing restrictions on grown adults, who are, despite assumptions to the contrary, the primary users of flavored tobacco products and should be allowed to make their own decisions. In December 2018 we decided to voluntarily eliminate all Vape and E-cigarette products from our stores here and in our two other down valley convenience stores because we saw a problem with these products in our youth up and down the valley. We took the initiative and were hoping to set the example for others to follow…including the city and county. Let’s try and work together with other communities in the valley as well and really make a difference with teen vaping and e-cig/juul usage. I believe we must educate our youth! As of now there has not ever been a class or seminar to Aspen students on the effects of tobacco. The city has raised over $300,000 from sales tax from tobacco product sales but has not taken any steps on trying to curb a young adult, through informative classes and seminars, from even wanting to try it. A ban won’t stop a young adult for wanting to try a product, especially when it is a car ride (3.6 miles) away, but education on the effects of tobacco most certainly will. Finally, I ask that this ban is reconsidered and for the attention to be directed to other forms of support, not personal taste. We live in a town where there are 7 dispensaries within walking distance that sell all flavors, sizes and packaging of cannabis. Flavored tobacco and chew are just options that a 21 year or over adult has. If this is about youth, than lets focus on those under 18 and what we can do to support and educate them to make smart choices. Sincerely, Mike Haisfield 57 Strengthening Community Through Workforce Housing 1 NOTICE OF AMENDMENTSTO THE EMPLOYEE HOUSING GUIDELINES TO:Aspen City Council FROM:Mike Kosdrosky, Executive Director MEETING DATE:June 10, 2019 RE:Notice of APCHA Resolution No. 04 (Series of 2019), Adopting Amendments to the Aspen/Pitkin Employee Housing Guidelines Redefining the Emergency Worker Procedure and Definition This memo is to initiate the option to use the Call-Up Procedure for Guideline changes recommended by the APCHA Board as required by the 5th Amended Intergovernmental Agreement. If you choose not to call up this policy change, it will go into effect 30 days after such notification to APCHA. PURPOSE OF MEMOAND PROPOSED AMENDMENTS: The Public Safety Council Policy Group (consisting of members from the Police Department, Sheriff’s Office, Aspen Valley Hospital, RFTA, Basalt Fire, Assistant County Manager) recommended amending the definition of an Emergency Worker along with the procedure approving an individual as an Emergency Worker. POLICY ISSUESADDRESSED: 1. The current definition of an “emergency worker” excluded some groups. 2. The procedure required the Public Safety Council to review each request and make the approval. BACKGROUND: Staff receives an average of 10 requests per year from individuals to be considered as an Emergency Worker – 80% of those requests are for priority in an APCHA Managed Rental and 20% are requests for Ownership. The APCHA places an average of 3 Emergency Workers in rental properties a year. An Emergency Worker can bid in a lottery as if they have a 4-year work history after 1-year of work as an Emergency Worker. However, they still must win the lottery. If the Emergency Worker wins and has not attained a four-year work history, that individual must remain as an Emergency Worker until such time he or she has been in that position for at least four years. Most individuals find housing outside of the APCHA system. The APCHA Board held 1st Reading of Resolution No. 04 (Series of 2019), Adopting Amendments to the Aspen/Pitkin Employee Housing Guidelines Redefining the Emergency Worker Procedure and Definition on April 3, and approved at the Public Hearing held April 17, 2019. DISCUSSION: The sections in the Guidelines referring to Emergency Worker include Part V APCHA RENTAL POLICIES AND PROCEDURES, Part VI APCHA PURCHASE AND SALE POLICIES AND PROCEDURES, and DEFINITIONS. Part V and VI would not require any change but are copied below for your reference. 58 Strengthening Community Through Workforce Housing 2 Part V, APCHA Rental Policies and Procedures, Section 1. Rental Priorities (APCHA Managed Properties) All tenants for deed restricted rental units must qualify through APCHA prior to moving in and/or executing a lease. Submission of application documents demonstrating qualification is required after a rental unit is offered to a prospective tenant and prior to signing a lease or occupying the unit. For properties under APCHA management that are advertised for rent, priority is established according to the duration of employment/work history; unless one of the following applies: A. Emergency Workers To be qualified as an Emergency Worker, the applicant’s employer must verify Emergency Worker Status by providing a statement providing a description of the individual’s position responsibilities and emergency schedule to confirm the on-call requirement to the APCHA Qualification Specialist. It is the responsibility of the Department Head to demonstrate that the employee is entitled to this priority for a one-year lease. A qualified Emergency Worker will be placed at the top of the priority list for APCHA managed rental properties. Verification of continued employment as an Emergency Worker is required for a one-year renewal of the lease. This requirement expires after two years of residency and service. Emergency worker priority does not extend to APCHA rental units under private property management. Part VI, APCHA Purchase and Sale Policies and Procedures To be qualified as an Emergency Worker, the applicant’s employer must verify Emergency Worker Status by providing a statement to the APCHA Qualifications Specialist. The individual who has been an Emergency Worker for at least one year may be given credit for four years of employment in Pitkin County, with a maximum of 5 chances in a lottery. All other criteria must be met; i.e., minimum occupancy, category, non- ownership of residential property within the OEZ. All such persons are required to maintain such employment until the completion of four years of service after acquiring the unit. If any such person leaves the emergency status position before that time, he or she is required to list the unit for sale in accordance with the deed restriction. The Emergency Worker priority shall have five (5) chances per lottery until such time as the Emergency Worker has worked within Pitkin County over eight (8) years. A certified emergency worker with such priority who leaves his/her position before completing four years of continuous service and certification shall lose priority and be required to list his/her ownership unit for sale. Part VII, DEFINITIONS –Emergency Worker Emergency Worker – An employee or volunteer, on call 24 hours/day, 7 days a week for human, life threatening emergencies, of a community based organization that provides on-scene assistance giving personal care to victims, including, but not limited to the following: Fire Department Workers, Mountain 59 Strengthening Community Through Workforce Housing 3 Rescue, Sheriff's Deputies, Police Officers, Hospital Emergency Room Technicians, Social Service Workers (mental health and abuse case workers), Ambulance Drivers, Emergency Medical Technicians, Communications Dispatchers through the Sheriff's Office or Police Department, etc. In order to qualify as an Emergency Worker, the person’s Emergency Service Department Head approval is required, whereby the supervisor must demonstrate the need of that agency to house the Emergency Worker in the Aspen area by requesting a formal approval with the Public Safety Council Housing Subcommittee. The attached resolution shows the changes requested in the Guidelines FISCAL IMPACT: Adoption of Resolution No. 04(Series of 2019) has no fiscal impact. RECOMMENDATION: Accept Resolution No. 4 (Series of 2019), Adopting Amendments to the Aspen/Pitkin Employee Housing Guidelines Redefining the Emergency Worker Procedure and Definition without initiating a call-up. Attachments: Resolution No. 04(Series of 2019) 60 61 62 63 64 65 Strengthening Community Through Workforce Housing 1 NOTICE OF AMENDMENTSTO THE EMPLOYEE HOUSING GUIDELINES TO:Aspen City Council FROM:Mike Kosdrosky, Executive Director MEETING DATE:June 10, 2019 RE:Notice of APCHA Resolution No. 05 (Series of 2019), Adopting Amendments to the Aspen/Pitkin Employee Housing Guidelines Creating a Hearing Officer Position and Adopting a Schedule of Fines(Notice of Callup) This memo is to initiate the option to use the Call-Up Procedure for Guideline changes recommended by the APCHA Board as required by the 5th Amended Intergovernmental Agreement. If you choose not to call up this policy change, it will go into effect 30 days after such notification to APCHA. PURPOSE OF MEMOAND PROPOSED AMENDMENTS: 1. Under the Fifth Amended and Restated IGA for Aspen/Pitkin County Housing Authority, the APCHA Board is requesting City Council and Board of County Commissioner approval of the attached amendments to the Employee Housing Guidelines; or call-up for further discussion and direction. 2. To establish the position of a third-party Hearing Officer to be appointed by the Board of Directors to hear Enforcement (Notice of Violationor NOV), Special Review, and Grievance cases. 3. To adopt a Schedule of Fines as part of the APCHA’s Employee Housing Guidelines as one of several enforcement options to help increaseprogramcompliance and integrity. POLICY ISSUESADDRESSED: 1. APCHA has threedifferent processes for handlingquasi-judicial decisions: APCHA’s Special Review process,Enforcement or NOVprocess, andits Grievance process.Havingthree differentquasi- judicial processes creates unnecessary program complexity and increases the risk of causing unintended but detrimental program precedents. 2. APCHA’s current NOV process isone of extremes –it is either too lenient or too harsh.Instead of having an “all or nothing” approach, fines are intended to improve program accountability and fairness by extending the overall due process period for alleged violators prior to forced sale or eviction, and by establishing fines that fit the violation, but remain effectively deterrent. BACKGROUND: In the fall of 2018, the APCHA Board adopted Resolution No. 05 (Series of 2018) to establish an independent Hearing Officer to hear special reviews, enforcement hearings, and grievances, and to establish a Schedule of Fines to incentivize program compliance and ensure systemwide accountability. The City Council and BOCC reviewed the proposed amendments in early 2019 and requested changes. The following changes have been incorporated intothe Hearing Officer and Schedule of Finds policy: 1. The fine schedule shall be adjusted annually based upon the Consumer Price Index currently used by APCHA. 2. Language has been added specifying that the Board has the option of having more than one hearing officer available for this process. 66 Strengthening Community Through Workforce Housing 2 3. The intent is to have an attorney as a Hearing Officer. The criteria will be listed in the Request for Proposal for this position. 4. Appeals to the Board will only be allowed for procedural issues, not for challenging the merits of the decision. On April 3, 2019, the APCHA Board held the 1st Hearing to review Resolution No. 05 (Series of 2019) and held Public Hearing on April 17, 2019, adopting Resolution No. 05 (Series of 2019) to establish an independent Hearing Officer to hear special reviews, enforcement hearings, and grievances, and to establish a Schedule of Fines to incentivize program compliance and ensure systemwide accountability incorporating the changes suggested by the BOCC and City Council. DISCUSSION: Hearing Officer APCHA’s existing processes for conducting special reviews, enforcement hearings, and grievances under the Employee Housing Guidelines are outdated, costly, and administrativelyburdensome. Each type of case requires a different process using different people. The Board of Directors wants to standardize APCHA’s quasi-judicial reviews using an independent third-party Hearing Officer. The Board’s goals for doing so are: To increase programmatic accountability, integrity, and public trust; To increase operational standardization and processes; To reduce the potential for quasi-judicial errors and the risk of legal liability to the program; To remove any public misperception that the compliance process can be compromised; and To increase overall transparency and improve overall decision making associated with APCHA’s compliance and enforcement. The APCHA Board can delegate its enforcement authority to a Hearing Officerin cases whereaproperty’sdeed restriction permits it, including evidentiary hearings and initial enforcement decisions.Commonly, Public Housing Authorities (PHAs) use hearing officers for case hearings, including the hearing of investigations. For example, the Jackson/Teton Housing Authority Board occasionally conducts contested case hearings and appeals of decisions of the Authority using an independent, third-party Hearing Officer. Resolution No. 5 (Series 2019)attachedincludes the proposed amendmentsto the Guidelines to create athird- party Hearing Officerposition with the changes stated above incorporated into the final document. Civil Penalties and Fines APCHA is committed to achieving 100% compliance through increased public education and enforcement. A recent survey of deed restricted homeowners shows that 45% of respondents (246 households in total) said that preventing fraud, abuse, and noncompliance should be one of APCHA’s top two policy concerns. It is said that perception becomes reality and unfortunately the public’s perception is that fraud, abuse, and noncompliance are serious concerns for the APCHA program, which policy makers should address. In August 2018, APCHA hired a full-time Compliance Manager. However, without adequate enforcement measures or 67 Strengthening Community Through Workforce Housing 3 penalties in place to guaranteecompliance, APCHA is severely limited in obtaining voluntary compliance from the variousprogram participants(owners, renters, landlords, property managers, and businesses). The Board provided the following criteria to create a fine system (Schedule of Fines). Fines should be simple, consistent, logical, graded by severity, punitivewhen necessary,and deter further or repeat noncompliance.A system of fines must be simple enough to communicate to the public and promote public education and voluntary compliance. Statelaw requires specificity as to the range of penalties applicable for anytype of violation(i.e. fines must not be discretionary).Such specificity gives notice to the public of what the penalty is for a violation and helps prevent unequal treatment of violators.The Schedule of Fines adopted by the APCHA Board covers all violations stated in theEmployee HousingGuidelines and for most deed restrictionsin place today. Fines are meant to deter owners, renters, and landlords(including property managers and businesses serving as landlords) from intentionally or unintentionally breaking the affordable housing rules. Through public education and outreach, APCHA willclearly communicate expectations forprogram compliance. The Board has created five stages of violations and fines. The more severe the violation, the steeper the fine. The fines range from $250 for a Stage 1 violation up to $5,000 for a Stage 5 violation. Stage 1 violations cover the least severe compliance violations while Stage 5 violations cover the most severe compliance violations impacting the housing program. Each violation stage allows for a 15-day cure period from the time of Notice of Violation (NOV)1, which can carry over into all five levels of the Schedule of Fines, givingalleged violators (in all but the most severe casesor when asevere pastviolation cannotbe cured) more time to cure and/or appeal an alleged violation prior to potentially losing their home. Although fines are progressive, they are not cumulative. It is important to note that fines collected will not be used to pay for APCHA’s ongoing operations butwill be used to pay for the cost of a hearing officer and for public education and engagement. Today, alleged compliance violators are allowed only 15 days to cure a NOV. Failure to cure or appeal a NOV within 15 days is grounds for losing one’s affordable home or rental unit. But under the APCHA Board’s proposed NOV and Schedule of Fines process, an alleged violator who fails to requalify (a Stage 1 violation in this case) would receive up to 90 days to cure or appeal a NOV before ever facing the penalty of losing their home.2 This extends the current due process period substantially – by up to five or six times longer –than the current cure period. Resolution No. 5 (Series 2019) includes the proposed Schedule of Fines. 1 Prior to issuing the first NOV, APCHA will issue a Notice of Investigation at its discretion, to determine whether a violation has occurred. This would allow most alleged violators up to an additional 15 days to cure or appeal their alleged violation. 2 This policy would not prevent private and public landlords, like APCHA, from exercising their contractual rights under a lease agreement and/or under Colorado law to demand compliance within a shorter timeframe prior to a Notice of Eviction.68 Strengthening Community Through Workforce Housing 4 FISCAL IMPACT: Adoption of Resolution No. 05 (Series of 2019) will likely require additional funds to be budgeted in 2020 through the Budget Supplemental process to pay the services of a hearing officer. Fines collected by APCHA will be used to offset the cost of a hearing officer in future years and will be used to provide educational materials and public outreach concerning the APCHA program.Based on preliminary research, APCHA expects to pay around $175 per hour for a hearing officer. At around 350 hours per year, a budget of $60,000 will be requested in the 2020 budget cycle. RECOMMENDATION: Accept the APCHA Board Resolution No. 05 (Series of 2019), Adopting Amendments to the Aspen/Pitkin Employee Housing Guidelines Creating a Hearing Officer Position and Adopting a Schedule of Fines without initiating a call-up. Attachments: Resolution No. 05 (Series of 2019) 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 Strengthening Community Through Workforce Housing 1 CALL-UP MEMO NOTICE OF AMENDMENTS TO THE EMPLOYEE HOUSING GUIDELINES TO:Aspen City Council FROM:Mike Kosdrosky, Executive Director MEMO DATE:June 3, 2019 MEETING DATE:June 10, 2019 RE:Notice of Resolution No. 02 (Series of 2018), Adopting Amendments to the Aspen/Pitkin County Housing Authority Employee Housing Guidelines adopting an Affordability Standard, New Minimum Net Livable Square Feet for new Affordable Housing,and Minimum Household Income Requirements to Bid on Ownership Units set on a Per Unit Basis Using Cost of Ownership, and adding Definitions of Affordability, and other terms. PURPOSE OF MEMO AND PROPOSED AMENDMENTS: 1.Establish a Definition and Standard of Affordability for the Housing Program. 2.Part III APCHA Affordable Housing Development Policies and Procedures, Section 5: Minimum Net Livable Square Footage for Affordable Housing Development: a)Eliminate (strike) Subsection A (1) Permitted Adjustments to Net Minimum Livable Square Footage; b)Amend Table VII: Minimum Net Livable Square Feet (SF) for Affordable Housing by 20% across all unit types; and c)Renumber Subsection A (2) Permitted Addition of Square Footage to Subsection A (1). 3.Part VI APCHA Purchase and Sale Policies and Procedures, Section 3. Bid Process: a)Amend Subsection B. Bid Submission, Paragraph 1, to establish a policy based on minimum incomes to bid. 4.Adding definitions of affordability and other terms to Part VIII, Definitions. BACKGROUND: The APCHA Board of Directors unanimously approved at Public Hearing APCHA Resolution No. 2 (Series of 2018) in 2018; however, the Aspen City Council has not reviewed these recommended amendments to date.In late 2018, the Pitkin County Board of Commissioners reviewed and approved these amendments to the Employee Housing Guidelines except for #2 which amends Part III, Section 5 of the Guidelines by reducing by 20% the Minimum Net Livable Square Footage for Affordable Housing Development across all new deed restricted unit types. DISCUSSION: Establish a Definition and Standard of Affordability APCHA’s Employee Housing Guidelines do not have an established standard or definition of affordability. Without such a standard –a basic principle for any affordable housing program -it is difficult to evaluate whether the workforce housing program is meeting its affordability objectives now and over time. 88 Strengthening Community Through Workforce Housing 2 According to APCHA’s 2016 Policy Study, “prices are not determined consistently based on an adopted standard for affordability. In some categories, rents and prices are too high, about right, or too low relative to income, yet affordability is a clear object of the Housing Program”(2016 Policy Study: Executive Summary,p. 15; 2016).In other words, without a definition or standard of affordability, policy makers cannot consistently or objectively determine sales prices, rents, or household income limit qualifications. The benefits of defining affordability: Provides an objective standard for evaluating whether APCHA households are cost burdened or not; Helps policy makers evaluate APCHA’s effectiveness in serving specific targeted income households and helps decision makers objectively compare APCHA to other housing programs; Supports better decision making, including establishing initial sales prices (i.e. newly deed restricted home prices), rental rates, appreciation limitations, as well as income qualification criteria; and Helps guarantee the long-term affordability of rental and ownership inventory within the community. The 2016 Policy Study recommended defining affordability based on housing costs equaling 30%of gross income. Most private lenders and government agencies in the U.S. measure affordability against this standard including all of Aspen’s peer mountain resort communities. The Department of Housing and Urban Development (HUD) and Colorado Housing and Finance Authority (CHFA)use affordability measures to determine the allocation of public funds by measuring the level of cost burden in communities and to regulate access to and set rental rates for public housing units. HUD uses a simple share of income approach stating that housing is not affordable if housing costs exceed 30% of the household’s gross (pre-tax) income.1 This standard originated for HUD public housing programs in the United States Housing Act of 1937. The 30% ratio has evolved over time, beginning at 20% in 1940, rising to 25% in 1968 and to 30% in 1981.2 A household is defined as cost-burdened by their housing payment when housing costs exceed 30% of a household’s gross (pre-tax) income. Households are severely cost-burdened when rent or mortgage comprises 50% or more of gross income. Cost burdened households, particularly those in lower income groups may be forced to make tradeoffs to meet other necessary household expenses, such as food, healthcare, and transportation, or in the safety, quality, and location of their housing. The application of the 30% ratio of housing costs to income varies. The calculation may compare just rent or mortgage to a household’s income or may include the cost of utilities in the calculation. For example, for rents in public housing projects, federal regulations limit the amount of rent plus an allowance for 1 Income is measured for public housing programs as defined in 25 C.F.R. § 5.609. 2 See the Housing and Urban Development Act of 1968 and Housing and Community Development Amendments of 1981, Public Law 97-35 (8/13/81), 95 Stat. 400.89 Strengthening Community Through Workforce Housing 3 utilities to be no more than 30% of income.3 The Colorado Housing Finance Authority (CHFA), however, allows rents plus utilities for low-income housing tax credit rentals (LIHTC) to comprise up to 40% of a qualifying household’s income.4 Although HUD’s standard is applied with some variation and has some deficiencies, it is the most widely used standard in federal,state, and local housing programs. Its simplicity and universal acceptance as an affordability indicator, or index,make it a good starting point for APCHA because it is computed from readily available federal census-based data and is easy to understand and track over time. Tying affordability to 30% of gross household income is meant to ensure that not only APCHA households have enough money to pay for other nondiscretionary costs but to create a comparatively equitable and objective standard for pricing newly deed restricted homes and maximum monthly rental rents for APCHA owners and renters. The 30% affordability standard is not without weaknesses. For example, the flat 30% ratio does not consider the varying ability for households at different income levels to afford non-housing essentials such as food, clothing, transportation, healthcare and childcare.Households earning $100,000 per year have much more disposable income left over after paying 30% of their income towards rent or mortgage than do households earning less than $30,000 per year. Also, the 30% ratio does not account for the cost differences in food, shelter, transportation, and other living expenses that occur from one housing market to another, affecting the total cost of living in an area and, therefore, what a household can realistically afford to pay for housing to meet other expenses.Finally, the 30% ratio does not take into consideration the physical condition, safety, or location tradeoffs that households must make (or are willing to make)to afford their housing; nor does it consider investments that owners may need to make to repair substandard properties (e.g. properties with a lot of deferred maintenance issues). Different approaches for determining affordability have long been debated without resolution. Beyond a flat 30% ratio approach, APCHA could always consider stepping up the affordability ratio, or percentage, as household incomes increase.High cost communities like Aspen serve higher income households (based on Area Median Income, or AMI) on average compared to most HUD-assisted communities. Aspen and other resort-based communities like it provide the environment for a scaled residual-income approach; however, APCHA knows of no other housing authorities to have adopted this approach. Low Income APCHA Renter Households According to the U.S. Census Bureau, for households at the bottom rungs of the income ladder, the use of the 30% affordability standard as an indicator of a housing affordability problem is as relevant today as it was four decades ago.The 2016 Policy Study found that about 23% of existing APCHA renters are cost- burdened (pay more than 30% of their income) for rent. Cost burden is particularly acute for Category 1 and 2 households (Table 1) and higher for 1-adult households compared to other types of households. 3 Reference CFR sections here. 4 See Colorado Housing and Finance Authority LIHTC Regulations, http://www.chfainfo.com/arh/asset/Pages/lihtc- compliance.aspx 90 Strengthening Community Through Workforce Housing 4 However, based on the recent data available, APCHA’s specified rents in relation to maximum incomes for every income category are affordable (Table 2). Table 1. Households Paying Over 30% of Income for Rent: APCHA Renters 2015 1-adult 2-adults 3-adults Total Households % Cost-Burdened 29.9%18.0%9.1%23.0% Category 1 Category 2 Category 3 Category 4 % Cost-Burdened 61.5%32.4%0.3%0.0% Source: 2015 Employee Survey Table 2.Average Affordability of APCHA’s Maximum Rents (2015) Cat1 Cat2 Cat3 Cat4 Average income range*$49,667 $77,667 $125,667 $204,000 Average rent**$721 $1,178 $1,612 $2,038 Ratio of monthly rent to monthly income*** 17%18%15%12% *Simple average of 1-, 2-and 3-adult maximum incomes specified by APCHA. **Simple average of maximum rents specified for each unit type. ***Ratio of average rent divided by average income. Affordability for APCHA Owners According to APCHA’s 2016 Policy Study, cost burden is not a significant problem for current APCHA owners. In fact, an estimated 10% of current APCHA owners are cost-burdened and pay more than 30% of their gross income toward a mortgage. This is lower than for homeowners employed in Pitkin County overall (19% total).5 When HOA fees are also added, cost burden affecting APCHA owners rises to an estimated 15%. Evaluated by unit income category and household type (Tables 3 and 4): Cost-burden mostly affects APCHA ownership households occupying units in Category 1 (55.4% of households) and Category 2 (23.8% of households). A similar percentage of households by dependent type are cost burdened by their mortgage payment, ranging between about 7.5% and 11%. This rises to near 16% for zero-and one- dependent households when HOA fees are added. Table 3. Households Paying Over 30% of Income for Mortgage: APCHA Owners 2015 0-dependents 1-dependent 2-dependents 3-dependents*TOTAL owners % cost-burdened 10.8%10.6%7.5%11.0%10.0% Including HOA 15.6%16.6%9.3%--15.0% *Small sample size for 3+ dependent households, consider this with interpretation. 5 See Section 1 –APCHA Affordable Housing Program for this data.91 Strengthening Community Through Workforce Housing 5 Table 4. Category 1*Category 2 Category 3 Category 4 Categories 5 - 7** % cost-burdened 55.4%23.8%4.7%4.1%1.3% *Category 1 had a small sample size,so this must be taken into consideration. **Categories 5, 6, and 7 are consolidated due to small individual sample sizes. Source: 2015 Employee Survey Affordability Definition or Formula APCHA’s proposed affordability definition and formula: Affordable housing is based on the concept of affordability. Affordability is a primary policy objective of APCHA. APCHA measures housing affordability on a simple share of income approach which states that housing becomes less affordable the more that housing payments exceed 30% of a household’s gross (pre-tax) income. Households are generally more cost-burdened when their housing payment (mortgage or rent) exceeds 30% of their gross (pre-tax) income. A mortgage is defined as an owner-occupied household’s payment of Principal, Interest, Taxes, and Insurance (PITI). Rent is defined as a tenant’s regular payment to a landlord for the use of property, excluding utilities. The inputs used to calculate the 30% affordability standard vary among housing agencies and peer communities. APCHA does not recommend including the cost of utilities for two reasons. First, utilities are not factored by any of APCHA’s peer communities’ ownership or rental programs. Second, calculating the cost of utilities as an input into affordability is difficult, at best, because the cost and types of utilities (e.g. water, electric, cable/internet, etc.) vary widely and are difficult to estimate and track over time. Homeowners’ Association (HOA) fees are not included in the definition of affordability for owner- occupied units. Like the cost of utilities, the cost of monthly HOA operating assessments very widely and cover different types of expenses. There is no “apples to apples” method for calculating and comparing HOA operating and capital reserve assessments. Including HOA fees as an input of the homeownership affordability standard would skew what may or may not be affordable. Therefore, HOA fees should be looked at on a case-by-case basis when APCHA qualifies the income and affordability eligibility of owner- applicants. Minimum Net Livable Square Footage for Affordable Housing Development Under Part III APCHA Affordable Housing Development Policies and Procedures, Section 5, APCHA Board recommends eliminating (i.e. striking) Subsection A (1) Permitted Adjustments to Net Minimum Livable 92 Strengthening Community Through Workforce Housing 6 Square Footage allowing developers of affordable workforce housing the opportunity to seek reductions of up to 20% in the minimum net livable square feet for new deed restricted units, regardless of unit type. Eliminating the exemption would not only streamline the community’s review (Community Development’s and APCHA’s) process for new affordable housing projects but would eliminate potential inconsistencies with the way these decisions are handled. APCHA believes reducing Minimum Net Livable Square Feet for Affordable Housing (Table VII) across all unit types by 20% and eliminating exemptions from square footage reductions is a better policy alternative to continuing to exempt projects on a case-by-case basis using a set of ill-defined criteria under Part III, Section 5.A.1, specifically providing concessions for: significant storage space located outside the unit; above average natural light; efficient, flexible layout with limited hall space and staircase space; availability of site amenities; unit location within the development, etc.APCHA believes the criteria to allow square foot reductions are too vague and subjective. Over the last two years, all affordable housing development applications have requested and received some type of exemption, or reduction,under the Permitted Adjustments to Net Minimum Livable Square Footage,including South Aspen Street, 404 Park Avenue, 210 W. Main, 331-338 Midland Park, 834 W. Hallam, 488 Castle Creek Road, 802 W. Main, and 517 Park Circle. In 2017, there were nine affordable housing development projects with a total of 112 units reviewed by APCHA. Out of those 112 units, 107 units requested and received a reduction in net livable square footage –i.e. 96% of all units with an average reduction of 10% and a maximum reduction request of 22% (slightly beyond the allowable SF reduction under the Guidelines). Square foot reductions (exemptions) have become the norm. Therefore, it calls into question whether the Minimum Net Livable Square Feet for Affordable Housing (Table VII)are presently too high or the criteria to evaluate permitted reductions in square footage are inadequate, or both? Reducing minimum square footages for new affordable housing development (Figure 1) by 20%, which again is the maximum reduction currently allowed in the Guidelines, has several advantages: 1.Adds clarity to the Employee Housing Guidelines (i.e. reduces unnecessary complexity); 2.Eliminates future square foot reduction exemptions beyond the new minimums; 3.Increases policy and decision-making consistency; 4.Reduces review staff time and cost in evaluating new affordable housing development applications; 5.Improves project cost effectiveness for both public and private developers; and 6.Better aligns APCHA with peer communities’ minimum square foot requirements. 93 Strengthening Community Through Workforce Housing 7 Figure 1 APCHA staff researched other housing authorities’ minimum square footage (size)requirements: Town of Breckenridge Minimum unit size permitted to qualify as employee housing is 250 SF. They are considering increasing to 300 or 350 SF per employee generated. Teton County Like APCHA, they allow up to a 20% reduction. However, they have different standards for rental units vs. ownership units. Rental units can be smaller. They also have SF minimum and maximums. With a 20% reduction, they allow: Studio 320 SF 1-Bedroom 480 SF 2-Bedroom 680 SF 3-Bedroom 960 SF Each Add.BR 120 SF Vail Residential developments require 300 SF minimum and 1,200 SF maximum. Dormitory units must contain 200 SF for each person occupying the unit. Creating a Minimum Household Income to Bid on any Ownership Unit set on a Per Unit Basis Using Cost of Ownership (Part VI APCHA Purchase and Sale Policies and Procedures, Section 3. Bid Process) Subsection 3B, Bid Submission, allows for qualified households to bid up in category: Only qualified APCHA applicants may submit bids on ownership units. Bids at a price higher than the listed sale price, which is ordinarily the maximum sales price permitted by the Deed Restriction, shall not be accepted. If otherwise qualified, ownership applicants may be permitted to bid for a unit in a higher category.However, bidding in a lower category is not permitted. Unit Type Current Min. SF 20% Proposed Min. SF Studio 500 100 400 1-Bedroom 700 140 560 2-Bedroom 900 180 720 3-Bedroom 1200 240 960 Single Family Detached 1500 300 1200 Net Minimum Livable Square Feet For Affordable Housing (Table VII) Current vs. Proposed 94 Strengthening Community Through Workforce Housing 8 Any household, regardless of current income category, may bid on and potentially purchase a higher category (higher priced) home all the way up to and into Resident Occupied (RO). Although the sales price of upper category units is set at a deed restricted amount, buyers of these units still must pay free market costs for HOA assessments and home maintenance. Therefore, while some lower-income households may be able to acquire financing for higher category units, the actual cost of ownership is often not considered, leading to cost-burden concerns (households spending more than 30% of their gross annual income on housing payment).Allowing unlimited “bidding up” for lower-income households could lead to higher rates of default and foreclosure, HOA assessment delinquencies (which is a frequent compliance issue), HOA funding issues (i.e. shortages in operating and capital reserves funds),etc. Eliminating or limiting the policy of bidding up may minimize future affordability issues within the ownership program. Limiting applicants to bid up only on properties they can afford should help curb financial issues down the road and force more realistic bidding by applicants. In its discussion on November 15, 2017, the Board agreed with staff’s affordability concerns with allowing households to bid up in category without limit; however, the Board also expressed a desire to allow some option to bid up, e.g. possibly no more than one category. Unfortunately, there is an issue with limiting prospective buyers to bid up only one category –in some cases, lower category households that could afford to purchase and own a higher category unit might be excluding from bidding. For example, the 2017 maximum sales price for a newly deed restricted Category 6, three-bedroom unit is $505,000; however, there is currently a Category 6, three-bedroom unit at Burlingame with a maximum resale price of only $356,000 –slightly above the maximum sales price for a newly deed restricted unit at Category 4. Clearly, there is a difference between the sales price of an existing versus newly deed restricted unit. This is because resale prices are not directly linked to the current category income limits, but are determined by the unit sales history (i.e. original purchase price; total number of sales; capital improvements to unit, etc.). Therefore, some existing higher category units have resale prices far below the maximum sales price for a newly deed restricted unit in the same category. Figure 2 shows a sample of upper category sales listings from 2017. The Estimated Annual Cost of Ownership (red column)includes mortgage payments, property taxes, insurance, and HOA assessments (i.e. PITI + HOA). The Minimum Income for No Cost-Burden (blue column)shows the annual household income necessary to spend less than 30% of gross income towards housing costs. The Minimum Category with No Cost Burden (orange column) identifies what category a household making the Minimum Income for No Cost-Burden would fall in. 95 Strengthening Community Through Workforce Housing 9 Figure 2 Although both Hunter Creek units are Category 4,2-bedroom units, the first unit listed above would be affordable to a household in the Category 3 income range, while the second unit listed above would be affordable to a Category 2 household. The Hoagland Ranch unit is also a Category 4 unit, yet the analysis shows that a household income in the Category 4 income range is necessary for that unit to remain affordable. The Woody Creek and Burlingame Ranch units, Category 6 and 7 respectively, would still be affordable to some Category 4 households. Therefore, allowing prospective homeowners to only bid up one category would exclude certain households from bidding even though they have the financial capacity to do so. Figure 3 Also, the impact that HOA assessments (dues) have on cost of ownership is shown in Figure 3 comparing two Category 4, 2-bedroom units, one at Smuggler Run and the other at Twin Ridge. While the Smuggler Run unit was priced more than $50,000 higher than the Twin Ridge unit, the cost of ownership is Property Unit Category Number of Bedrooms Purchase Price Total Estd. Monthly Payment* Estd. Annual Cost of Ownership Min. Income for No Cost-Burden** Min. Category w/ No Cost-Burden Hougland Ranch 4 3 Bed 383,206$ $2,317 $27,800 $92,668 Category 4 Hunter Creek 4 2 Bed 226,503$ $1,531 $18,366 $61,221 Category 3 Hunter Creek 4 2 Bed 163,305$ $1,192 $14,299 $47,662 Category 2 Woody Creek 6 3 Bed 463,165$ $2,725 $32,705 $109,015 Category 4 Burlingame Ranch 7 3 Bed 540,155$ $3,431 $41,175 $137,251 Category 4 Who Can Afford to Own Upper Category Units? (December 2017) *Total Estimated Monthly Payment includes PITI and HOA fees; Mortgage payments assume 5% down payment, and a 30 year loan with 5% interest **As of 12/4/17, no affordability standard has been established and approved by the APCHA Board 96 Strengthening Community Through Workforce Housing 10 higher for the Twin Ridge unit because of significantly higher HOA assessments. A policy that sets the minimum household income required to bid up on a unit must also account for this. Therefore, APCHA recommends that the minimum household income to bid on any ownership unit be set on a per unit basis using the cost of ownership for that unit and the adopted affordability standard herein (i.e.30% of annual household gross income). RECOMMENDATION: To approve Resolution No. 02 (Series of 2018), A Resolution of the Aspen/Pitkin County Housing Authority Board Adopting an Affordability Standard and Adopting Amendments to the Aspen/Pitkin Employee Housing Guidelines Pertaining to Minimum Net Livable Square Feet for Affordable Housing and Creating a Minimum Household Income to Bid on any Ownership Unit set on a Per Unit Basis Using Cost of Ownership. Attachment: Resolution No. 02 (Series of 2018) 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 MEMORANDUM TO:Mayor and City Council FROM: Linda Manning, City Clerk DATE OF MEMO:June 5, 2019 MEETING DATE:June 10, 2019 RE:City Councilmember appointments to various boards and commissions Typically, each January and when Council changes over every other year, members of Council elect who will serve on what board. Attached is the list of the 13 boards with Councilmember participation. There is time on the work session agenda on June 11 th for Council to discuss. Staff is recommending that Council elect at least a Mayor Pro Tem at the June 10th regular meeting. 112 Boards Meeting date Mayor Pro Tem Ann Mullins CAST https://coskitowns.com/calendar/meeting-agenda/ Steve Skadron June 20 – Breckenridge(CML Conference) Aug 22-23 – Frisco Oct 24-25 Aspen RFTA https://www.rfta.com/board-meetings/ Steve Skadron / Ann Mullins 2nd Thursday of the month – 8:30am Carbondale Town Hall DRGW Covenant Enforcement https://www.rfta.com/trail-documentation/ https://www.rfta.com/wp-content/uploads/2017/04/cec- background-new-member-2017-memo.pdf Ann Mullins Annual meeting – Typically November NWC Council of Government http://nwccog.org/about/meetings/ Ward Hauenstein / Bert Myrin 7-11, 8-22, 10-24, 12-5 See attached Aspen Chamber Resort Association https://www.aspenchamber.org/boards-committees Steve Skadron / Bert Myrin Last Tuesday of the month – 8:30am – Aspen Square Ruedi Water & Power Authority https://www.rwapa.org/board-roster/ Ann Mullins Meets once per quarter – River Center in Basalt – June 27 th (tentative) CORE Board https://aspencore.org/our-staff-board/ Adam Frisch / Ward Hauenstein 3rd Thursday of the month 9- 11am Occasionally 8:30-11 Sister Cities Ward Hauenstein / Adam Frisch 2nd Thursday of the month, 4:30 Sister Cities room Burlingame Housing Inc Pete Strecker & Sara Ott As needed CML Policy Advisory Board https://www.cml.org/home/advocacy-legal/Policy- Development Ann Mullins Oct, Dec, Feb league building Denver Nordic Council Adam Frisch / Ward Hauenstein 3rd Wednesday of the month. Noon in Sister Cities or Council Chambers. Board of Health Ann Mullins Quarterly – July 18 230-4:30 BOCC meeting room Oct 17 – 2:30-4:30 Maroon Bells room Compact of Colorado Communities https://www.compactofcoloradocommunities.org/events Adam Frisch Aug 7, Oct 7. 1:00 pm APCHA 113 2019 MEETING SCHEDULE January 16-18 Teton Village, WY March 7 Denver June 20 Breckenridge* August 22-23 Frisco October 24-25 Aspen Previous Meeting Locations 2018 Mountain Village, Vail*, Mt. Crested Butte, Winter Park 2017 Ketchum, Breckenridge*, Silverthorne, Silverton 2016 Whistler, Vail*, Fraser, Pagosa Springs 2015 Dillon, Breckenridge*, Vail, Estes Park 2014 Jackson, Breckenridge*, Durango, Ouray 2013 Telluride, Vail*, Crested Butte, Basalt 2012 Steamboat Springs, Breckenridge*, Minturn, Glenwood Springs 2011 Snowmass, Vail*, Grand Lake, Park City 2010 Mt. Crested Butte, Breckenridge*, Aspen, Avon 2009 Mountain Village, Vail*, Breckenridge, Grand Junction 2008 Winter Park, Steamboat*, Estes Park, Vail 2007 Frisco, Snowmass*, Durango, Jackson 2006 Telluride, Breckenridge, Silverthorne, Jackson - meeting cancelled 2005 Winter Park, Vail, Crested Butte, Grand Junction 2004 Breckenridge, Steamboat, Snowmass, Frisco 2003 Vail, Steamboat, Fraser 2002 Grand Junction, Aspen, Crested Butte 2001 Minturn, Steamboat, Aspen 2000 Park City, Grand Lake, Silverthorne 1999 Glenwood Springs, Mt. CB, Winter Park 1998 Grand Junction, Frisco, Gunnison 1997 Telluride, Steamboat, Vail * CML Conference 114 2019 NWCCOG COUNCIL MEETING SCHEDULE PO Box 2308 ● 249 Warren Ave ● Silverthorne, CO 80498● 970-468-0295 ● Fax 970-468-1208 ● www.nwccog.org Thursday, January 24, 2019 Full Council, EDD Board & NLF Board Meeting Location: Colorado Mountain College Vail Valley, 150 Miller Ranch Rd., Edwards, CO Time: 10:00 a.m.-2:00 p.m. Primary Agenda Items: Introduction of new members/representatives; elect executive committee & officers; annual NLF Board meeting; EDD Board meeting & election of officers. Thursday, March 28, 2019 Full Council Meeting Location: Council Chambers, 50 Lundgren Blvd. Gypsum, CO Time: 10:00 a.m. – 2:00 p.m. Primary Agenda Items: Approval of final 2018 financials; program updates. Thursday, May 23, 2019 Full Council & EDD Board Meeting Location: Breckenridge Grand Vacations Community Center Hopefull/Discovery Room Time: 10:00 a.m. – 2:00 p.m. Primary Agenda Items: Review/acceptance of the 2018 audit Thursday, July 11, 2019 Full Council Meeting Location: Colorado Mountain College, 1402 Blake Ave., Glenwood Springs, CO Time: 10:00 a.m. – 2:00 p.m. Primary Agenda Items: Approval of 2020 dues; approval of 2019 budget revisions; discussion re: Annual Planning Meeting Agenda Thursday, August 22, 2019 Full Council & EDD Board Annual Planning Meeting Location: Summit County Community & Senior Center Hoosier Room, Frisco, CO Time: 10:00 a.m. – 2:00 p.m. Agenda Items: Strategic Planning for 2020 Thursday, October 24, 2019 Full Council Meeting Location: Grand View Community Space, 395 E. Lionshead Circle, Vail, CO Time: 10:00 a.m. – 2:00 p.m. Primary Agenda Items: Review of draft 2020 budget Thursday, December 5, 2019 Full Council, EDD Board & Foundation Board Meeting Location: NWCCOG Office, Silverthorne, CO Time: 10:00 a.m. – 1:00 p.m. Primary Agenda Items: 2019 budget revisions; approve 2020 budget; adopt 2020 meeting schedule; annual NWCCOG Foundation Board meeting. 115 2019 Annual C.E.C Member Letter TO: Covenant Enforcement Commission Members FROM: Angela Henderson- Assistant Director, Project Management & Facilities Operations DATE: June 5, 2019 RE: Annual Meeting and Background of the CEC Dear Commission Members: Thank you for agreeing to serve on the Covenant Enforcement Commission (“CEC”). The CEC usually meets once a year to review whether RFTA has lived up to its obligations concerning stewardship of the Aspen Branch of the Denver & Rio Grande Western Railroad Corridor (the “Corridor”). A little history is helpful here. The CEC was established because of an agreement between RFTA’s predecessor, the Roaring Fork Railroad Holding Authority (“RFRHA”), and the Board of Trustees of Great Outdoors Colorado (“GOCO”). GOCO provided funds for the purchase of the Corridor in 1997. Originally, RFRHA was required to place a conservation easement on the entire Corridor. Based on concerns about securing federal funding for future RFRHA transportation projects, the Conservation Easement was removed from the entire 34 miles of the Corridor and replaced with Conservation Covenants, in nine areas. The obligations of the Conservation Covenants now belong to RFTA. GOCO allowed modification of its original grant agreement in return for RFRHA making the covenants and setting up the CEC. As a CEC member, you report on compliance with the Covenants to the RFTA Board of Director’s and ultimately GOCO. In practice, a consultant and a RFTA staff member with familiarity of the Corridor and the Covenants performs an inspection of the Covenant areas annually and each presents a report to the CEC. Based on the annual CEC meeting, the report is reviewed and updated, comments are collected and then a letter is sent on the CEC’s behalf to the RFTA Board of Director’s, along with a copy of the report. Once the RFTA Board has reviewed the comments, then a letter and copies of both reports are sent to GOCO. The focus of the Conservation Covenants is compliance with policies defining the types of uses that may be permitted within the Corridor. The CEC determines whether or not a proposed or existing encroachment is compatible with the transportation, recreation and conservation values set out by the 2001 Encroachment Policy Memo. At the CEC 116 Page 2 of 2 meeting, you will be asked to review the draft report as well as RFTA’s staff report on any actions taken to determine the contents of a final report. The annual assessment is usually completed between August and September with the annual meeting generally scheduled sometime in mid-November. If you have any questions please feel free to contact me at 970 384-4982 or Abbey Pascoe at 970-384- 4971. Sincerely, Angela M. Henderson RFTA - Assistant Director, Project Management & Facilities Operations 117