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HomeMy WebLinkAboutordinance.council.078-82 ORDINANCE NO. ~ (Series of 1982) AN ORDINANCE SUBJECT TO RATIFICATION BY VOTE OF THE PEOPLE PROVIDING FOR A NEW OCCUPATION TAX DISTINCT FROM AND IN ADDITION TO THE TAX IMPOSED BY ARTICLE V OF CHAPTER 21 OF THE MUNICIPAL CODE, WHICH NEW TAX, TO BE CALLED THE ASPEN RESORT SERVICES OCCUPATION TAX, IS DESIGNED TO RAISE REVENUE FOR MUNICIPAL APPROPRIATIONS MADE IN ACCORDANCE WITH, AMONG OTHER AUTHORITY, SECTION 31-i5-901(1) (b), C'R.S. 1973; DEDICATING REVENUES RAISED BY THE TAX TO THE ADVERTISING, PROMOTING, AND MARKETING OF THE BUSINESS, SCENIC AND RECREATIONAL ATTRACTIONS, THE NATURAL RESOURCES, AND THE SOCIAL AND EDUCATIONAL ADVANTAGES OF ASPEN; AUTHORIZING THE CITY OF ASPEN TO CONTRACT WITH A NON PROFIT GENERIC ASPEN RESORT SERVICES ORGANIZATION TO PROVIDE SUCH ABOVE-DESCRIBED RESORT SERVICES USING APPROPRIATIONS FROM REVENUES GENERATED BY THE NEW TAX; PROVIDING A THREE-YEAR CEILING ON THE TAX RATE; SETTING FORTH REQUIREMENTS OF THE ORGANIZATION OF ANY ENTITY CONTRACTING WITH THE CITY HEREUNDER; PROVIDING FOR THE AMENDABILITY AND REPEALABILITY (ONLY WITH VOTER APPROVAL) OF THE ORDINANCE; AMENDING SECTIONS 12-34 AND 12-58 OF THE MUNICIPAL CODE FOR CONSISTENCY WITH THIS ORDINANCE; AND SETTING FORTH CIVIL AND CRIMINAL PENALTIES FOR THE VIOLATION THEREOF. WHEREAS, the business community of Aspen, as represented by the Aspen Chamber of Commerce, has proposed to the City Council of the City of Aspen that it is in the best interests of the citizens and community of Aspen to create a unified and effiCient method of advertising the recreational, scenic, cultural, business, environmental and educational resources of Aspen ~ advertising, promoting and marketing those resources and by providing related services to the visitors and businesses of Aspen; and WHEREAS, the said business community of Aspen has further proposed that a specialized organization, which would provide advertising, promotion, marketing, central reservation services and other related services, is vital to maintaining the status of Aspen as a preeminent national and international all-season resort; and WHEREAS, the City Council believes the economic, social and educational welfare of the citizens and community of Aspen is closely intertwined with its ability to be strongly competitive with other national and international all-season resorts; and WHEREAS, among other authorizing legislative provisions, Section 31-15-901(1) (b), C.R.S. 1973, as amended, grants the governing body of each municipality the power "to appropriate moneys for the purpose of advertising the business, social, and educational advantages, the natural resources, and the scenic attractions of each municipality;" and WHEREAS, among other authorizing legislative provisions, Section 31-15-501(c), C.R.S. 1973, as amended, grants the governing body of each municipality the power "to license, regulate, and tax, subject to any laws of this state, any lawful occupation, business place, amusement, or place of amusements and to fix the amount, terms, and manner of issuing and revoking licenses issued therefor;" and WHEREAS, the City of Aspen has previously enacted other occupation taxes for the purpose of raising revenue for municipal activities, which shall remain in full force and effect and continue to produce revenues for the purposes stated therein; and WHEREAS, the said business community has proposed to the City Council that an additional occupation tax on businesses within the City of Aspen containing the rates, classifications, incidence and apportionment as described below, with revenues therefrom to be expended for purposes in furtherance of those outlined in Section 31-15-901(1) (b), --2-- C.R.S. 1973~ as amended, is and will be the best method of generating revenues and is a proper, just, rational and equitable distribution of tax burdens within the City for the purposes outlined herein; and WHEREAS, the said business community has further proposed the formation of a specialized advertising~ promotion and marketing organization to be a generic Aspen resort services organization, which will have as its voting members all those who pay the occupation tax proposed herein; and WHEREAS, the said generic Aspen resort services organization shall have the ability to contract with the City of Aspen to provide the resort services and accomplish the purposes stated herein with its revenues to be provided by the revenues of said occupation tax; and WHEREAS, the said business community represents that any contractual relationship between the City and the said generic Aspen resort services organization should be operative for at least a five-year period in order to provide sufficient stability, continuity and efficiency to accomplish its stated purposes, while at the same time providing for annual review and renewal of any contract and retaining all the other rights and powers as may be provided by law and/or required for and by the City of Aspen; and WHEREAS, the said business community of Aspen has proposed the following ordinance as representing a consensus of the said business community as being the best manner in which to accomplish the purposes as stated herein; and WHEREAS, the City Council, in response to the concerns, representations and proposals of the Aspen business community, has agreed to refer the following ordinance to the people for their review and judgment at a special municipal election called for February 15, 1983; and -3- WHEREAS, City Council has found after public hearings that evidence supports the tax rates, classifications, incidence and apportionment as set forth herein and concludes that such classifications are proper, just, rational, and equitable and are in the best interest of public health, safety, and welfare; and WHEREAS, the City Council hereby declares that acceptance by the electors of the following ordinance at the said special election will demonstrate that the provisions contained therein are in the best interest of the health, safety and welfare of the citizens of Aspen; NOW, THEREFORE, be it ordained by the City Council of the City of Aspen, Colorado: Section 1 Tax Ordinance. That a new Article VI be and the same is hereby added to Chapter 21 of the Municipal Code of the City of Aspen, to read as follows: "ARTICLE VI - ASPEN RESORT SERVICES OCCUPATION TAX Sec. 21-120. Definitions. Whenever in this article the words hereinafter defined or construed in this section are used, they shall, unless the context requires otherwise, be deemed to have the following meaning: (a) "Business" shall mean any business, trade, occupation, profession or calling of any kind, including but not limited to the rental of short-term lodging accommodations, as further defined herein. (b) "Engaged in Business" shall mean to carry on or take part in the operation of a business as owner, operator or agent, whether such business has a permanent site, a temporary site or mobile site (~.~., deliveries and taxicabs). (c) "Full-time Employee Equivalent (FTEE)" means any person (or the hours worked by two or more persons added together) working for pay under the control and direction of an employer, whether the business is seasonal or otherwise, whose services (individually or combined) are required for at least 35 hours per week in the establishment in which he is employed computed on a monthly average. For example, five individuals working seven hours per week each in one month in one business establishment shall be counted as one FTEE for that month. Only employees working in the City shall be counted. The number of FTEE for a new business shall be computed on the estimated monthly average for the ensuing calendar year. For the purpose of this section, a working owner shall be counted as one FTEE. The monthly average FTEE shall be rounded to the nearest full FTEE, and shall not be less than one FTEE. The tax herein provided is upon business in the performance of local functions and is not a tax upon the functions relating to interstate commerce. (d) "Person" includes any individual, partnership, association, organization or corporation. (e) "Studio" shall mean any sleeping area which also contains hot plates, stoves, microwave ovens and/or refrigerators. (f) "Restaurant (Class I)" shall be defined as any restaurant establishment employing 5 or more FTEE. (g) "Restaurant (Class II)" shall be defined as any restaurant establishment employing 4 or less FTEE. (h) "Retail (Class I)'~ shall be defined as any establishment with 50% or more of gross revenues derived from retail sales employing 3 or more FTEE. (i) "Retail (Class II)" shall be defined as any retail establishment with 50% or more of gross revenues derived from retail sales employing 2 or less FTEE. (j) "Short-term accommodations" shall mean any accorm~odations rented or offered for rent with rental periods of 30 days or less. (k) "Unit" or "unit equivalents" or fractions thereof, shall mean any sleeping area enclosed by a minimum of one wall of heated, interior space, excluding sofas and hide-a-beds. "Units" in lodges, hotels, motels, condominiums, houses and all other tourist accommodations shall be further defined numerically Type of Accommodation Unit Equivalent Lodge roo~ without bath .50 units Lodge room with bath .75 units Studio of 319 sq. ft. or less .75 units Studio of 320 sq. ft. or more 1.00 units Studio lofts and 1 bedrooms 1.50 units 2 bedrooms, or 1 bedroom plus 2.00 units loft 3 bedrooms, or 2 bedrooms plus 2.50 units loft 4 bedrooms, or 3 bedroom plus 3.00 units loft In excess of the above .50 units per additional sleeping area, as defined in (k) Sec. 21-121. Legislative intent. The purpose of the Aspen Resort Services Occupation Tax shall be to provide a source of funding to advertise, promote and market the business, scenic, and recreational attractions, the natural resources, and the social and educational advan- tages of Aspen in order to maintain the status of the city as a preeminent international all-season resort. It is expected that the revenues from this tax shall be spent for advertising, marketing and promotion of tourism to Aspen through a specialized promotional and marketing organization. The advertising of Aspen as a resort shall be deemed to include promotion, marketing, central reservations, visitor services, business services and related legal and administrative services. Sec. 21-122. Special Fund Created. The revenues derived from the Aspen Resort Services Occupation Tax shall be placed in a special fund, separate and distinct from the city's general fund. Expenditures from such fund shall be made only for the purposes as set forth in section 21-121. Sec. 21-123. Tax Levy. There is hereby levied for the period January 1 to December 31 of each year, commencing January 1, 1983'/ an Aspen Resort Services Occupation Tax upon ever~ business (or entity engaged in business) within the City of Aspen and not specifically exempted from the provisions of this article, based upon the following: Occupational taxes for all businesses shall be processed through the City~ Finance Department in the following categories: Classification Tax Short-term Lodging $100 per unit Accommodations (as defined in Section 21-120(k), above) */For the taxable year commencing January 1, 1983, and only ~or that year, businesses subject to the tax provided by this article shall be assessed at a rate of 21/24 of the usual annual tax due, since the services provided for by the ordinance will necessarily commence after February 15, 1983. -6- j Restaurant (Class I) $300 per estab- lishment and $25 per FTEE Restaurant (Class II) $150 per estab- lishment and $25 per FTEE Retail (Class I) $300 per estab- lishment and $25 per FTEE Retail (Class II) $150 per estab- lishment and $25 per FTEE Professional (medical $150 per doctors, lawyers, dentists, establishment architects, engineers, and $25 per FTEE veterinarians, chiropractors, real estate brokers, account- ants, psychologists) Service/Wholesale/Other (a) Service Class I $150 per estab- (contractors, plumb- lishment and ers, builders, $25 per FTEE other trade services and all others engaged in business and not covered by classes (b), (c) and (d), below.) (b) Service Class II $1,000 per (savings & loan establishment institutions) and $25 per FTEE (c) Service Class III $2,000 per (commercial banks) establishment and $25 per FTEE (d) Service Class IV $150 per (property management establishment companies) and $25 per FTEE Section 21-124. Exemptions. The following are exempt from payment of an occupation tax: (a) An employee; (b) Any business exempted by Federal or State Law; (c) Any business or enterprise specifically described in Section 12-32 of the Municipal Code as being exempt from the requirement of procuring a business license. (d) The owner of any condominium or house or other lodging accommodation that is rented or offered for rental for short-term purposes for a total of 30 days or less over the course of a calendar year and rented or offered for rent in not more than four (4) increments. (e) Skiing companies shall be exempt from the payment of this tax for any year in which such companies make a combined contribution (by contract, donation or otherwise) of at least twenty-five percent (25%) of the total expenditure budget of any Aspen resort services organization up to a combined maximum of $400,000.00 in any year. Sec. 21-125. Business Tax Return. Every person engaged in business in the City of Aspen, unless exempt from the occupation tax by law, shall make and file a business tax return with the Finance Director on a form provided by the city. The return shall show the name and address of the place of business, the type of businesst the number of full-time employees equivalents (FTEE) and persons engaged in the operation of the business, and such other information as may be required by the Finance Director. The return shall be filed and the tax paid on or before January 1 of each year. However, a new business shall file its first return prior to the starting of the business and thereafter on or prior to January 1 of each succeeding year.*_~*/ Sec. 21-126. Tax Payment. If not paid on or before the first day of January of each year the tax shall become delinquent on January 2nd of the same year as to all persons engaged in business. All persons engaged in business for a period of less than one year shall have the tax become due and payable prior to the time the person engages in the business, and shall pay the full amount of the tax for each year or any portion thereof. Upon receipt of the tax, it shall be the duty of the Finance Director to execute and deliver to the person paying the tax a revenue receipt showing the name of the person paying the tax, the date of payment, the business paying the tax, the period for which the tax is paid, and the place in which the person conducts his business. No refund shall be made to any person who discontinues business during the taxable year. Interest shall accrue on all delinquent taxes from the day of delinquency until paid or collected at the rate of one and one-half (1½) per cent per month.***/ **/For the taxable year 1983, and only for that year, the return shall be filed no later than April 15, 1983, or such time as is established by the City's Finance Department. ***/For the taxable year 1983, and only for that year, the tax shall be paid no later than April 15, 1983, or such time as is established by the CitY's Finance Department. -8- Sec. 21-127. Fees - Cumulative. The payment of the tax imposed by this article is separate and distinct from the payment of the occupation tax imposed by Article V of this chapter, and shall not relieve the person paying the same from the payment of any other tax now or hereinafter imposed by any ordinance for any business he may carry on unless so provided by the ordinance imposing the tax, it being the intent of this article that the Aspen Resort Services Occupation Tax prescribed in this article shall be cumulative except where otherwise specifically provided. Sec. 21-128. Separate Tax for separate place of business. Every person doing business in more than one permanent or temporary store, stand or other place of business shall pay a separate tax for each such permanent or temporary place of business unless such places of business are contiguous to each other or the places of business are essentially mobile (e.g., deliveries and taxicabs). The business may be transferred from one location to another without the payment of additional tax, after giving written notice to the Finance Director. Sec. 21-129. Applications for exemption - abatements - review - erroneous assessments - procedures. The burden shall be on any person engaged in business in the City of Aspen, as defined by this ordinance, to show facts sufficient to support an exemption from payment of an occupation tax pursuant to Section 21-124, to show that the City of Aspen has not placed the business in a class or sub-class of business in accordance with the classification scheme of this ordinance, or to show that an abatement or refund of taxes erroneously or illegally levied must be made. Every application claiming exemption, improper classification, or erroneous or illegal levy of taxes shall be made on forms prescribed and furnished by the Finance Director, shall contain such information as may be required by the Finance Director, and shall be signed by the owner of such business or his authorized agent° The Finance Director shall examine and review each application submitted, and return a written decision thereon with reasons relied upon within ten (10) working days of receipt of the application° If it is determined by the Finance Director that the relief therein claimed is justified and in accordance with the intent of this ordinance, the requested exemption, reclassification, or abatement shall be granted. If the Finance Director finds an application for relief pursuant to this section is justified, or that the taxes paid are erroneous or illegal, he shall give full particulars as to the exemption, reclassification, or abatement in his approval of the application. --9-- If the Finance Director finds an application for relief pursuant to this section to be unjustified, the tax due shall be immediately due and payable with interest thereon as provided in Section 21-126. Sec. 21-130. Unlawful Procedure. It shall be unlawful for any person or his agent to engage or carry on a business within the city for which an Aspen Resort Services Occupation Tax is required without first having paid the tax and obtained a revenue receipt as herein provided. For the purpose of this section, the opening of a place of business or offering to sell followed by a single sale or the doing of any act or thing in the furtherance of the business shall be construed to be engaging in or carrying on such business. Sec. 21-131. Civil action for recovering tax due. The City shall have the right to recover all sums due under the terms of this article by judgment and execution thereon in a civil action in any court of competent jurisdiction. Such remedies shall be cumulative with all other remedies provided herein for the enforcement of this article. Sec. 21-132. Violation - Penalty. Failure to comply with the terms of this article by payment of taxes, filing of a return and otherwise complying with the terms of this article shall constitute an offense in violation thereof, punishable, upon conviction, by a fine of not more than Three Hundred Dollars ($300.00) or by imprisonment for not more than ninety (90) days or both such fine and imprisonment. Each day that any person shall carry on or engage in any business without payment of the tax shall be deemed a separate offense." Section 2 Tax Rate c~i~ing. The Aspen Resort Services Occupation Tax rate and/or tax classifications and/or tax incidence and/or tax apportionment, as contained in this ordinance, may not be amended by City Council for a three-year period after the effective date of this ordinance without ratification by vote of the electorate; except that City Council shall have, within said three-year period, the power to amend the tax at the request of the contracting entity to allow for an inflation adjustment increases as reflected by the Denver CPI-W, and the power to make minor adjustments in the tax -10- classifications and other provisions without changing the over-all effect of this ordinance. Section 3 Contractual Authority. The City is hereby authorized to contract with a generic Aspen resort services organization,'which is yet unformed but shall be formed or found to conform to the requirements as outlined in Section 5, below, to effectuate the purposes of this ordinance, providing that such an Aspen resort services organization shall be paid for services rendered only as revenues are received under the provisions of this ordinance and appropriated by a contract between the City and any such organization, which contract shall be entered into in accordance with this ordinance, the City Code, City Charter and Colorado law. It is the intent of the City Council that the contract for advertising, promotional services, marketing services and related services with any Aspen resort services organization shall be reviewed and renewed annually for a period of at least five (5) consecutive years in order to maintain stability, continuity and efficiency in accomplishing the purposes of this ordinance, to the extent such commitment is consistent with this ordinance, the City Code, City Charter and Colorado law. Section 4 Ratification Election Required. This occupation tax ordinance shall become effective upon the approval of a majority of the qualified electors of the City of Aspen voting at a special municipal election to be held on February 15, 1983. Section 5 Requirements of Contracting Entity. (a) A nonprofit generic Aspen resort services organization, which may contract with the City for advertising and related services hereunder, shall be a nonprofit Colorado corporation. (b) Each person paying the Aspen Resort Services Occupation Tax hereunder shall be a voting member of such an Aspen resort services organization. -11- (c) City Council, upon passage of this ordinance, shall appoint a committee composed of 13 individuals who shall be selected to represent constituencies within the community according to the formula contained in Section 5(d), below. This committee shall, within 60 days of its appointment, nominate candidates for a Board of Directors for the organization, and conduct an election at which such Board shall be elected by at least a majority of the members of an Aspen resort services organization voting or a greater number if the committee shall so provide, and this committee shall adopt rules for such election. The members of the regular Board of Directors of the organization, elected as provided above, shall serve staggered terms of office. The election shall be by approval of at least a majority of the organization's members voting, who shall vote as follows: Voti~: If there are classifications of membership, such classifications essentially shall be according to the formula contained in Section 5(d), below. All members shall have one vote per $100 increment (or fraction thereof) of this occupation tax paid. (d) The initial appointed organizing committee and the Board of Directors of the organization shall be a 13-member Board according to the following formula: two (2) members representing the condominium lodging community; two (2) members representing the single-ownership lodging community; two (2) members representing the skiing companies; one (1) member representing retai~ establishments; one (1) member representing restaurants; one (1) member representing the professional community; one (1) member representing the service/wholesale and other businesses in the community; one (1) member representing City Council; and two (2) at-large members. Lodging members shall vote for the candidate competing for the at-large seat elected in even-numbered years. All remaining classes shall vote for at-large seat elected in odd-numbered years. (e) The Articles of Incorporation of the organization shall be approved by at least a majority of the -12- organization's members voting, or a greater number if the original Board shall so determine. (f) The original Board of Directors, as named by the aforementioned organizing committee, shall adopt the Bylaws of the organization. Additionally, said Bylaws shall be approved by vote of at least a majority of the organization's members voting, or a greater number if the Articles of Incorporation so provide. (g) Subject to the tax-rate three-year ceiling provision in Section 3, above, the Articles of Incorporation and/or Bylaws of the organization shall provide that any change in the occupation tax rate and/or tax classifications and/or tax incidence and/or tax apportionment shall be submitted to the City Council for its approval by ordinance only after such change shall have been approved by at least a majority of the organization's me~bers voting or a greater number if the Articles of Incorporation and/or Bylaws so provide. (h) The Articles of Incorporation and/or Bylaws of the organization shall provide that any fundamental change in the bylaws and/or operating procedures of the organization shall be approved by vote of at least a majority of the the organization members voting or a greater number if the Articles of Incorporation and/or Bylaws so provide. (i) The Articles of Incorporation of any Aspen resort services organization shall provide that it may lawfully do business only for the following primary purpose and incidental purposes: (1) To provide advertising services for Aspen as a resort community consistent with the purposes outlined in Section 31-15-901(1) (b), C.R.S. 1973, as amended, including, without limitation, advertising, marketing services, promotional services, a central reservations service, related research and planning, public relations and related functions as follows: (aa) Reservations: The process (and necessary hardware, software, personnel and materials) of pre-arrival booking of the visitor to Aspen into lodging, transportation, skiing, events, restaurants and the like. Reservations includes the purchase and/or lease, maintenance and operations of central telephone systems and computer data-base links. (bb) Services to Visitors: Those post-arrival things done to ease, enliven and enrich the resort experience of visitors, including, without limitation, visitor information, consumer protection, special'events and emergency services. (cc) Services to Business: Those year-around services to member business to enhance and coordinate the purposes of the organization and its reservation system and visitor services, including, without limitation, employee training and motivation, management training and motivation, quality control, research, planning and statistics. (dd) Administrative: Necessary administrative costs, including salaries and legal expenses, incidental to the accomplishment of the purposes of the generic Aspen resort services organization. (j) The Articles of Incorporation and/or Bylaws of any Aspen resort services organization shall provide that any contract with the City of Aspen to provide advertising and related services hereunder shall first be approved by vote of at least a majority of the organization's members voting, or a greater number if the Articles of Incorporation and/or Bylaws so provide, before said contract is submitted to the City of Aspen, for approval by a duly executed ordinance. (k) Any Aspen resort services organization shall provide that the short term lodging community shall contribute forty-five percent (45%), or as near thereto as is practicable, of the organization's annual expenditure budget, up to a budget maximum of one million dollars ($1,000,000.00) annually, for a period of three (3) years, whether such total contribution is made by payment of the Aspen Resort Services Occupation Tax or by prepaid commissions, voluntary assessment, override commissions or other mechanisms. Section 6 Ordinance Amendable and Repealable by Council. Subsequent to ratification of this ordinance by the electorate, the City Council of the City of Aspen may amend or alter this ordinance, except as provided in Section 2, above, by a duly-enacted ordinance of the City Council of the City of Aspen. Such amendment or alteration need not be submitted to the electors of the City of Aspen, Colorado, for their approval; provided, however, any proposed repeal of the ta~ must be so submitted to the electors. Section 7 Code Amendment. Section 12-34(a) of the Aspen Municipal Code is hereby repealed and re-enacted to read as follows: "(a) No license required by this article shall be issued until the occupation taxes provided for in Article V and VI of Chapter 21 of the Municipal Code has been paid, or it is determined that the person applying for a license is exempt from the payment of said tax." Section 8 Code Amendment. Section 12-58 of the Aspen Municipal Code is hereby repealed and re-enacted to read as follows: "Sec. 12-58 Payment of occupation taxes. No license shall be issued under the provisions of this article until the occupation taxes provided for in Article V and VI of Chapter 21 of the Municipal Code has been paid, or it has been determined that the person applying for a license is exempt from the payment of said tax." Section 9 Severability. If any section, subsection, sentence~ clause, phrase or portion of this ordinance is for any reason held invalid or unconstitutional by any court of competent jurisdiction, such portion shall be deemed a separate, distinct and independent provision and such holding shall not affect the validity of the remaining portions thereof. Section 10 Public Hearing. A public hearing on the ordinance shall be held on the 10th day of January, 1983, at 5:00 p.m. at City Hall, Aspen, Colorado. INTRODUCED, READ AND ORDERED published as provided by law the City Council of the City of Aspen, Colorado on the ~ day of ~ , 198~. ,~- HE~Y~O~ ATTEST: ~ .~~ CITY CLERK FINALLY adopted, passed and approved on the /~/)~C~day of ATTEST: