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HomeMy WebLinkAboutFinally Adopt Ordinance No. 1765, Creation of a Tourism Business Improvement DistrictFinal Adoption of Ordinance 1765: An Ordinance of the City Commission of the City of Bozeman, Montana, Creating a Tourism Business Improvement District Page 1 of 4 Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Greg Sullivan, City Attorney Chris Kukulski, City Manager SUBJECT: Final Adoption of Ordinance 1765: An Ordinance of the City Commission of the City of Bozeman, Montana, Creating a Tourism Business Improvement District. MEETING DATE: August 10, 2009 AGENDA ITEM TYPE: Regular Agenda RECOMMENDATION: Finally adopt Ordinance 1765: An Ordinance of the City Commission of the City of Bozeman, Montana, Creating a Tourism Business Improvement District. BACKGROUND: Over the past two months you have participated in the creation of a Tourism Business Improvement District. You previously adopted two resolutions to regarding this issue: Resolution 4172 (a Resolution of Intent) and Resolution 4182 (a final Resolution). Pursuant to Sect. 7-12-1121(1), MCA, you must also adopt an ordinance. Tonight’s action is final adoption of the ordinance. Should you give approval, it will become effective September 9, 2009. On July 27th, you made two motions resulting in three amendments to the provisional ordinance which have been codified and highlighted in yellow in the attached final ordinance. Those changes are below: 1. Addition to Sect. 2.90.020.A: 10. Authorize the acquisition and disposal of real property upon the consent of the City Commission. 2. Addition to Sect. 2.90.020.E: 1. Each year, at a date and in a format established by the Bozeman Finance Director, the Board of Trustees shall submit to the Bozeman City Commission a report of its activities for the preceding year. The report shall contain an audit of the district’s finances. In addition, the board shall, at the same time, submit to the Bozeman City Commission, a work plan and 91 Final Adoption of Ordinance 1765: An Ordinance of the City Commission of the City of Bozeman, Montana, Creating a Tourism Business Improvement District Page 2 of 4 budget for the ensuing fiscal year pursuant to the requirements of Title 7, Chpt. 12, Part 11, MCA. The Bozeman City Commission shall have final authority to approve the work plan and budget. 3. Addition to 3.22.020: Work Plan and Budget. The Board of Trustees for the BTBID, in consultation with the Bozeman Convention and Visitors Bureau, shall annually prepare a work plan, audit, and budget and submit the same to the Bozeman City Commission. The Commission shall provide notice work plan and budget have been submitted and shall hold a public hearing on objections to the work plan and budget and may modify the work plan and budget as it considers necessary and appropriate. Upon approval of the work plan and budget the Commission shall levy the assessments as described in Sect. 3.22.020.F. No other changes were made to the proposed ordinance at provisional adoption. As for the amendments you made on July 27th regarding an audit, Finance Director Anna Rosenberry brought to my attention that the TBID will be required to perform an audit every two years pursuant to state law (see the highlight in yellow, below): 2-7-503. Financial reports and audits of local government entities. (1) The governing body or managing or executive officer of a local government entity, other than a school district or associated cooperative, shall ensure that a financial report is made every year. A school district or associated cooperative shall comply with the provisions of 20-9-213. The financial report must cover the preceding fiscal year, be in a form prescribed by the department, and be completed within 6 months of the end of the reporting period. The local government entity shall submit the financial report to the department for review. (2) The department shall prescribe a uniform reporting system for all local government entities subject to financial reporting requirements, other than school districts. The superintendent of public instruction shall prescribe the reporting requirements for school districts. (3) (a) The governing body or managing or executive officer of each local government entity receiving revenue or financial assistance in the period covered by the financial report in excess of $200,000 shall cause an audit to be made at least every 2 years. The audit must cover the entity's preceding 2 fiscal years. The audit must commence within 9 months from the close of the last fiscal year of the audit period. The audit must be completed and submitted to the department for review within 1 year from the close of the last fiscal year covered by the audit. (b) The governing body or managing or executive officer of a local government entity that does not meet the criteria established in subsection (3)(a) shall at least once every 4 years, if directed by the department, or, in the case of a school district, if directed by the department at the request of the superintendent of public instruction, cause a financial review, as defined by department rule, to be conducted of the financial statements of the entity for the preceding fiscal year. Director Rosenberry stated that because the Commission appoints the board members and can “impose its will” via approval of the annual budget, she believes the TBID should be considered a component unit. I agree. Thus, the TBID must comply with the above statute. Please consider whether you would like to continue with the yearly audit (pursuant to your motion of the 27th) or follow state law which, for the TBID, will require an audit every two years. 92 Final Adoption of Ordinance 1765: An Ordinance of the City Commission of the City of Bozeman, Montana, Creating a Tourism Business Improvement District Page 3 of 4 You have discretion as to whether you would like the audit provided on a one-year or two-year cycle. If you choose to follow state law and have the audit provided on a two-year basis, I suggest the following amendments, as shown highlighted below: 1. Sect. 2.90.020.E: 1. Each year, at a date and in a format established by the Bozeman Finance Director, the Board of Trustees shall submit to the Bozeman City Commission a report of its activities for the preceding year. In addition, the board shall, at the same time, submit to the Bozeman City Commission, a work plan and budget for the ensuing fiscal year pursuant to the requirements of Title 7, Chpt. 12, Part 11, MCA. The Bozeman City Commission shall have final authority to approve the work plan and budget. Every two years, the Board shall prepare and submit to the Commission an audit pursuant to the Montana Single Audit Act (Title 2, Chpt. 7, MCA). 2. 3.22.020: Work Plan and Budget and Audit. The Board of Trustees for the BTBID, in consultation with the Bozeman Convention and Visitors Bureau, shall annually prepare a work plan and budget and submit the same to the Bozeman City Commission. The Commission shall provide notice work plan and budget have been submitted and shall hold a public hearing on objections to the work plan and budget and may modify the work plan and budget as it considers necessary and appropriate. Upon approval of the work plan and budget the Commission shall levy the assessments as described in Sect. 3.22.020.F. Every two years, the Board shall prepare and submit to the Commission an audit pursuant to the Montana Single Audit Act (Title 2, Chpt. 7, MCA). Finally, I was asked to propose language for your consideration at final adoption that would create a Commission liaison to the Board of Trustees. This liaison would not be a voting member of the TBID Board of Trustees. I offer the following possible language, underlined below, to be included in proposed Sect. 2.90.020.B.1: 1. All appointments to the BTBID shall be made by the Bozeman City Commission. The Commission shall appoint a member of the City Commission to act as a liaison to the Board of Trustees. The Commission liaison shall not be a voting member but shall receive all information submitted to the board of trustees, shall attend board meetings, and shall report back to the City Commission on the affairs of the BTBID. An amendment reflecting language similar to the above may be made at final adoption without requiring an additional final reading because the above is not a material change in its effect as 93 Final Adoption of Ordinance 1765: An Ordinance of the City Commission of the City of Bozeman, Montana, Creating a Tourism Business Improvement District Page 4 of 4 the Commission liaison is not a voting member of the Board of Trustees but will facilitate communication between the board and the Commission. FISCAL EFFECTS: As stated to the Commission in the staff memorandum prepared for your consideration at both the Resolution of Intent and final Resolution, the annual assessments for the district will be based on actual number of occupied room nights and is estimated to total $511,000 in the first year of assessment. As of the date of creation of the district, the BTBID will require each assessed property owner to record the occupied room nights at their hotel. This information will be accumulated on a fiscal year (July 1 - June 30) basis and then billed to each property owner the following October. Once collected, the city will remit assessment dollars to the Board to be used according to their Commission-approved annual work plan and budget. Sect. 7-12-1132, MCA. If the district is created according to the proposed timeline, the assessments will be first collected in November 2010. ALTERNATIVES: As suggested by the City Commission. Attachments: Ordinance 1765(FINAL) Report compiled on: July 30, 2009 94 ORDINANCE NO. 1765: Creation of Bozeman Tourism Business Improvement District Page 1 of 11 ORDINANCE NO. 1765 AN ORDINANCE OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA, CREATING A TOURISM BUSINESS IMPROVEMENT DISTRICT WHEREAS, on July 6, 2009, the City Commission of the City of Bozeman adopted Resolution 4182, creating the Bozeman Tourism Business Improvement District; and WHEREAS, Sect. 7-12-1121(1), MCA, the City Commission, in addition to a resolution as describe above, must adopt an ordinance to implement the Bozeman Tourism Business Improvement District; and WHEREAS, the recitals and findings made during adoption of Resolution 4182, including those made in the adoption of Resolution 4172, a Resolution of Intent to Create a Tourism Business Improvement District, are hereby incorporated as legislative findings for the adoption of this Ordinance. NOW THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA: Section 1 That the table of contents of Title 2 of the Bozeman Municipal Code be added to so that such table of contents shall read as follows: Title 2 ADMINISTRATION AND PERSONNEL Chapters: 2.01 Code of Ethics 2.04 City Commission 2.05 Acquisition and Transfer of City Property 2.06 Municipal Court 2.08 City Manager 2.10 Assistant City Manager 2.12 Administrative Departments Generally 2.16 City Attorney Department of Law 95 ORDINANCE NO. 1765: Creation of Bozeman Tourism Business Improvement District Page 2 of 11 2.20 Health Officer 2.30 Office of the City Clerk 2.32 Department of Finance 2.36 Division of Recreation 2.40 Department of Public Safety 2.44 Department of Public Service 2.48 Department of Public Welfare 2.56 Library Board of Trustees 2.64 City County Planning Board 2.66 City Planning Board 2.72 City Employees 2.76 Cemetery 2.78 Bozeman Area Bicycle Advisory Board 280 Historic Preservation Advisory Board 2.84 Bozeman Beautification Advisory Board 2.88 Tax Increment Financing Industrial District Board 2.90 Business Improvement Districts Boards of Trustees 2.92 Bozeman Tree Advisory Board 2.96 Bozeman Senior Citizens Advisory Board 2.98 Quality Jobs and Living Wage Section 2 That there shall be added to Title 2 of the Bozeman Municipal Code, the following chapter: Chapter 2.90 BUSINESS IMPROVEMENT DISTRICTS BOARDS OF TRUSTEES Sections: 2.90.010 Purpose and Intent 2.90.020 Bozeman Tourism Business Improvement District Board of Trustees 2.90.010 Purpose and Intent The purpose and intent of this chapter is to provide for boards of trustees for the several business improvement districts within the City of Bozeman created pursuant to Title 7, Chpt. 12, Part 11, MCA. The boards of trustees for each business improvement district shall have the powers enumerated herein with respect to the program for each business improvement district as described in Chapter 3.22 of this code. Each board of trustees is a public body and shall comply 96 ORDINANCE NO. 1765: Creation of Bozeman Tourism Business Improvement District Page 3 of 11 with all laws of the State of Montana regarding notice and opportunity to be heard, open meetings, public participation, and maintenance of public records. 2.90.020 Bozeman Tourism Business Improvement District Board A. Creation – Powers and Duties. The Bozeman City Commission creates the Bozeman Tourism Business Improvement District (BTIBD) Board of Trustees and authorizes the BTIBD Board of Trustees to exercise any of the following business improvement district powers, in conjunction with administration of the BTBID created pursuant to Chpt. 3.22 of this code: 1. Sue and be sued; 2. Enter into contracts to carry out the function of the BTBID; 3. Hire and terminate personnel needed for its purposes; 4. Provide adequate liability insurance for the affairs of the BTBID; 5. Promote private investment and business expansion in the BTBID; 6. Provide for the management and administration of the affairs of the BTBID; 7. Promote business activity by advertising, decorating, marketing, and promoting and managing events and other actions designed for the general promotion of business activities in the BTBID; 8. Perform such other functions as are necessary to carry out the purposes of this chapter and to further the objectives of the BTBID; 9. Adopt bylaws, subject to the approval of the Bozeman City Commission, for the operation of the board and develop procedures for the collection and maintenance of BTBID records and the protection of district members’ trade secrets to the extent allowable by Montana law; and 10. Authorize the acquisition and disposal of real property upon the consent of the City Commission. B. Members – Appointments and Terms. 1. All appointments to the BTBID shall be made by the Bozeman City Commission. 2. Upon creation, there shall be seven (7) members of the Board of Trustees and there shall always be at least five (5) but not more than seven (7) members of the Board of Trustees for the BTBID, amendable from time to time by duly 97 ORDINANCE NO. 1765: Creation of Bozeman Tourism Business Improvement District Page 4 of 11 adopted resolution of the Bozeman City Commission. The terms of the initial seven members shall be as follows: three members to serve for terms of 1, 2, and 3 years, respectively, from the date of their appointments, two must be designated to serve for terms of 4 years from the date of their appointments. For a seven-member board of trustees, there must be two additional appointments for terms of 2 years and 3 years, respectively. 3. Each board member shall hold office until his or her successor has been appointed and has qualified. 4. A board member shall receive no compensation for his or her service. Board members shall be entitled to previously authorized expenses, including travelling expenses, incurred in the discharge of his or her duties. 5. Any persons may be appointed as board members but only if they are owners of real property subject to the jurisdiction of the BTBID or a formally appointed representative of a real property owner. 6. A board member may be removed by the City Commission for inefficiency, neglect of duty, or misconduct, in office. C. Director. The director of BTBID Board of Trustees shall be the duly appointed executive director of the Bozeman Convention and Visitors Bureau and shall serve in an advisory and administrative role for the Board of Trustees in the administration of the affairs of the BTIBD. D. Meeting – Election of Officers. 1. The BTBID Board of Trustees shall hold meetings as it deems necessary to execute its powers and duties provided for in Section 2.90.020.A and Chapter 3.22 of this code. 2. The BTBID Board of Trustees shall adopt bylaws enabling it to elect officers, set officer terms, and establish regular meeting times. E. Annual Budget, Work Plan, and Report/Recommendation on Levy. 1. Each year, at a date and in a format established by the Bozeman Finance Director, the Board of Trustees shall submit to the Bozeman City Commission a report of its activities for the preceding year. The report shall contain an 98 ORDINANCE NO. 1765: Creation of Bozeman Tourism Business Improvement District Page 5 of 11 audit of the district’s finances. In addition, the board shall, at the same time, submit to the Bozeman City Commission, a work plan and budget for the ensuing fiscal year pursuant to the requirements of Title 7, Chpt. 12, Part 11, MCA. The Bozeman City Commission shall have final authority to approve the work plan and budget. 2. At the time the Board of Trustees submits a report, annual budget, and work plan, the board shall also submit a recommendation to the Bozeman City Commission on a method of levying an assessment on the property within the BTBID pursuant to the requirements of Title 7, Chpt. 12, Part 11, MCA. If the method of assessment is to be different than that described in Sect. 3.22.020.F, the Commission must adopt an ordinance amending said section. 3. The work plan and budget shall comply with the provisions and procedures of Sect. 3.22.020.G. F. Duration. The Board of Trustees for the BTBID shall remain in effect as long as the BTBID remains in effect. G. Ethics Ordinance. All board activities and members are subject to all other provisions of this code, including Chpt. 2.01, Code of Ethics. H. Liability/Property Insurance Required. The Board of Trustees shall obtain liability insurance coverage, at the sole expense of the BTBID, insuring the BTBID, the Board of Trustees, and the City of Bozeman against legal liability for personal injury and property damage in an amount not less than the liability and property exposure limits established for governmental entities in Title 2, Chpt. 9, Part 1, MCA. (Ord. 1765, § 2, 2009). 99 ORDINANCE NO. 1765: Creation of Bozeman Tourism Business Improvement District Page 6 of 11 Section 3 That the table of contents of Title 3 of the Bozeman Municipal Code be added to so that such section shall read as follows: Title 3 REVENUE AND FINANCE Chapters: 3.04 Collection of Taxes 3.08 Transfer of Surplus Funds 3.12 Police Reserve Fund 3.16 Special Improvement District Revolving Fund 3.20 Tax Increment Financing Industrial District Program 3.22 Business Improvement District Programs 3.24 Impact Fees 3.28 Advertisement Space on Municipal Property (Ord. 1765, § 3, 2009). Section 4 That there shall be added to Title 3 of the Bozeman Municipal Code, the following chapter: Chapter 3.22 Business Improvement District Programs Sections: 3.22.010 Purpose and Intent 3.22.020 Bozeman Tourism Business Improvement District Program 3.22.010 Purpose and Intent The purpose and intent of this chapter is to provide for the specific program components of each of the several business improvement districts within the City of Bozeman created pursuant to Title 7, Chpt. 12, Part 11, MCA. The districts shall be administered as provided by the boards of trustees for each district created pursuant to Chpt. 2.90 of this code. The purpose of a business improvement district is to serve a public use, promote the health, safety, prosperity, 100 ORDINANCE NO. 1765: Creation of Bozeman Tourism Business Improvement District Page 7 of 11 security, and general welfare of the inhabitants of the district and of the people of this state and be of specific benefit to the property within the boundaries of each district. 3.22.020 Bozeman Tourism Business Improvement District Program. A. Creation of District. The Bozeman City Commission creates and establishes the Bozeman Tourism Business Improvement District (BTBID). B. Specific Purpose of District. In addition to the purposes enumerated in Sect. 3.22.010, the purposes of the BTBID are to aid in tourism, promotion, and marketing within the BTBID. C. District to be Administered by Board of Trustees. Pursuant to Sect. 2.90.020, the affairs of the BTBID are to be administered by the BTBID Board of Trustees. D. Limits and Boundaries of District. 1. The outer limits of the BTBID within which properties used for the purpose of providing overnight stays at lodging facilities are be subject to the jurisdiction of the district shall mirror the City of Bozeman’s corporate limits. As the corporate boundaries of the City of Bozeman change by reason of annexation or otherwise, the outer limits of the area within which a property shall be included in the BTBID shall be similarly changed. 2. Within the limits described in Sect. 3.22.020.D.1, it is acknowledged not all properties or facilities are to be subject to the jurisdiction of the BTBID; rather, specific non-contiguous properties used for the purpose of providing overnight stays at lodging facilities, as described herein, shall be the only properties or facilities that comprise the BTBID. The properties and facilities that shall be subject to the BTBID assessments are only those that are being used for the identified purpose of providing ten (10) or more rooms for temporary overnight accommodations, lodging, dwelling, or sleeping facilities for transient guests and, as such, shall include all hotels, motels, inns, bed and 101 ORDINANCE NO. 1765: Creation of Bozeman Tourism Business Improvement District Page 8 of 11 breakfast establishments, hostels, and other similar uses, structures, or portions thereof with ten (10) or more rooms. 3. Any facility meeting the requirements of Sect. 3.22.020.D.2 that begins service within the city limits of the City of Bozeman after the effective date of Ordinance 1765 shall be subject to the requirements of this chapter. In such a case, the facility will automatically become subject to the jurisdiction of the BTBID and subject to the assessments described in Sect. 3.22.020.G, below. This provision shall also apply to any property or portion thereof annexed into the City of Bozeman after the effective date of Ordinance 1765 whether such property or portion thereof contains an existing facility meeting the requirements of Sect. 3.22.020.D.2 or whether a facility meeting the requirements of Sect. 3.22.020.D.2 is developed on the property after annexation. E. General Character of the Services to Be Performed. The services to be performed by the BTBID shall include the funding of all uses and projects for tourism promotion within the City of Bozeman as specified in the BTBID annual work plan and budget, as required by Sect. 2.90.020.E, and as approved by the Bozeman City Commission. The services shall be designed to, among others, benefit local tourism and lodging businesses within the City of Bozeman and shall include the marketing of Bozeman at convention and trade shows, the marketing of Bozeman to the travel industry generally, and the marketing of Bozeman as a viable location for major sporting events. F. Assessments. Finding the benefits derived by each property or facility are proportional, the Bozeman City Commission shall annually assess the entire cost of the BTBID against the BTBID in the amount of one dollar ($1.00) per occupied room night. The properties to be assessed shall be those meeting the requirements of Sect. 3.22.020.D.2. The assessments described herein shall be subject to the provisions of Chpt. 3.04 of this code. 102 ORDINANCE NO. 1765: Creation of Bozeman Tourism Business Improvement District Page 9 of 11 G. Work Plan and Budget The Board of Trustees for the BTBID, in consultation with the Bozeman Convention and Visitors Bureau, shall annually prepare a work plan, audit, and budget and submit the same to the Bozeman City Commission. The Commission shall provide notice work plan and budget have been submitted and shall hold a public hearing on objections to the work plan and budget and may modify the work plan and budget as it considers necessary and appropriate. Upon approval of the work plan and budget the Commission shall levy the assessments as described in Sect. 3.22.020.F. H. Records/Trade Secrets Pursuant to Montana law, the public shall have reasonable access to the records of the BTBID. To ensure there is sufficient protection of the trade secrets of any facility subject to this chapter the board of trustees shall adopt procedures for creation and maintenance of records of the BTBID and procedures for balancing the right of the public to access to said records with the interest of the member entities’ right to maintain the confidentiality of any valid trade secrets. These procedures shall be approved by the Bozeman City Attorney and incorporated into the bylaws. I. Duration of District The BTBID shall remain in effect for 10 years from the effective date of Ordinance 1765 unless otherwise extended or modified by the Bozeman City Commission. (Ord. 1765, § 5, 2009). Section 5 Repealer. All provisions of the ordinances of the City of Bozeman in conflict with the provisions of this ordinance are, and the same are hereby, repealed and all other provisions of the ordinances of the City of Bozeman not in conflict with the provisions of this ordinance shall remain in full force and effect. 103 ORDINANCE NO. 1765: Creation of Bozeman Tourism Business Improvement District Page 10 of 11 Section 6 Savings Provision. This ordinance does not affect the rights and duties that matured, penalties that were incurred or proceedings that were begun before the effective date of this ordinance. Section 7 Severability. That should any sentence, paragraph, subdivision, clause, phrase or section of this ordinance be adjudged or held to be unconstitutional, illegal, or invalid, the same shall not affect the validity of this ordinance as a whole, or any part or provision thereof, other than the part so decided to be invalid, illegal or unconstitutional, and shall not affect the validity of the Bozeman Municipal Code as a whole. Section 8 Effective Date. This ordinance shall be in full force and effect thirty (30) days after final adoption. PROVISIONALLY PASSED by the City Commission of the City of Bozeman, Montana, on first reading at a regular session held on the 27th of July, 2009. ____________________________________ KAAREN JACOBSON, Mayor ATTEST: _______________________________ STACY ULMEN City Clerk 104 ORDINANCE NO. 1765: Creation of Bozeman Tourism Business Improvement District Page 11 of 11 APPROVED AS TO FORM: _________________________________ GREG SULLIVAN City Attorney FINALLY PASSED, ADOPTED AND APPROVED by the City Commission of the City of Bozeman, Montana on second reading at a regular session thereof held on the ____ day of August, 2009. The effective date of this ordinance is September __, 2009. _________________________________ KAAREN JACOBSON, Mayor ATTEST: _______________________________ STACY ULMEN City Clerk APPROVED AS TO FORM: _________________________________ GREG SULLIVAN City Attorney 105