Title
Update on the Lodgers & Auto Rental Tax (LART) Event Application Review Process
Presenter:
Charae McDaniel, Chief Financial Officer
Body
Summary:
The LART Citizen’s Advisory Committee’s (CAC) role is to make recommendations to the City concerning the expenditures of the LART Fund (City Code 2.9.110). The process the LART CAC undertakes to formulate the recommendations to City Council for event funding has been updated over the past year. This item provides an update on the process to City Council for their information, and to ensure Council is aware of the thorough process that the LART CAC conducts that results in their recommendations to City Council.
Background:
The LART Tax, 2% on lodging and 1% on auto rental, was established in 1978 with the purpose of attracting visitors and enhancing the economy of the City and Pikes Peak Region (City Code 2.9.102).
A number of events in the community have been designated by Council resolutions over the years as “City-sponsored events” and are supported in whole or in part by LART funds. The remaining funds are allocated to projects and events in the community through an application process and extensive review by the LART Citizen Advisory Committee, which results in their recommendation to City Council for events and projects to fund from the LART Fund.
Previously, the LART CAC evaluated applications using criteria that meet the purpose of LART funding, such as ability to attract out-of-area visitors, economic impact (hotel room nights, increasing visitation), however did not make use of a formal evaluation rating/scoring mechanism.
The number of applications that have been submitted for review has increased over the last number of years, ranging from around 60 in 2017 to over 90 in the past two years. This increased volume of applications has placed greater demands on the LART CAC. Also, in anticipation of the possibility of greater revenue generation to the LART fund, it is expected that the volume of applications will become even more voluminous in, hopefully, the near future. These factors led the City to consider various ways to prepare for the increased volume of applications, while maintaining acceptable demands placed on the volunteer LART CAC. The approach that was taken was to employ the four contracted entities to provide the first, in-depth review of the applications that are in their areas of expertise - visitor and convention promotion (Visit COS), business tourism and economic development (The Greater Colorado Springs Chamber and EDC), cultural tourism promotion (Cultural Office of the Pikes Peak Region (COPPeR)), and sports-related visitor promotion and development (Colorado Springs Sports Corporation). The contracted entities would then provide their input and guidance on the applications to the LART CAC for their consideration in developing the recommendations to City Council.
In the summer of 2022, a UCCS graduate student, Rachael Maxwell, was preparing to conduct her capstone project and was interested in focusing her efforts on the LART process. Miss Maxwell approached a number of people involved in the LART process and interviewed them to gain input on what would be the most helpful research or product that she could provide to the City and to the LART CAC. The input she received led her to research, evaluate, and create a scoring rubric for the LART CAC’s use in evaluating the LART event applications. Miss Maxwell researched best practices used by comparable cities to evaluate tourism-based grant applications and conducted a review of the City’s LART applications between 2022-2023 to determine if the criteria supported the past recommendations of the LART CAC. The value of the proposed rubric is that it offers a numerical evaluation and scoring tool which fosters accountability in decision making, improves transparency with applicants and the community, and provides consistency in the application review process. The capstone poster that Miss Maxwell created which provides a summary of the project is attached.
The LART CAC reviewed the rubric that Miss Maxwell had created and was very appreciative of the consistency and transparency provided by the standardized evaluation tool. The initial rubric contained four evaluation criteria, as outlined below. It was determined by the LART CAC and the contract entities that are members of the CAC, that it would be helpful to add a fifth evaluation criteria that is specific to the particular industry to which it relates - visitor and convention promotion, business tourism and economic development, cultural tourism promotion, and sports-related visitor promotion and development. This resulted in the current rubric which contains 5 evaluation criteria, four of which are the same across industries, and one that is specific to each industry. The LART CAC supported the contract entity’s use of the rubric in evaluating the event applications and providing that information to the CAC for final evaluation of the applications.
The evaluation categories included in the rubric are:
- Attracting Visitors: generating LART tax revenue, capacity to attract visitors to the region, size of anticipated participation including attendees, vendors and staff
- Enhancing the Economy: enhances economic growth, generates tax revenue for the City, adds to the diversity and uniqueness of events and experiences in the region, supports positive regional brand
- Program Merit: aligns with mission of LART, likelihood event will continue in subsequent years, serves broad population including underserved areas
- Administrative Ability: demonstrates competency required to complete the event, presents a reasonable budget with diversified revenue streams, commitment to measure program effectiveness, displays track record of success in related efforts
- Industry-specific criteria: visitor and convention promotion, business tourism and economic development, cultural tourism promotion, and sports-related visitor promotion and development.
The process that the LART CAC has developed for the evaluation of event applications is that the applications are sorted into the appropriate industry, then the contract entity for each industry reviews and evaluates the application using the rubric. The rubric results and applications, along with an estimated economic impact provided by Visit COS (if applicable), is provided to the LART CAC. The LART CAC then reviews these pieces of information and, as a committee, discusses each application and comes to agreement on what the Committee will include in its recommendation to City Council.
Previous Council Action:
On November 8, 2022, City Council recommended LART expenditures to be included in the 2023 budget (Resolution No. 191-22). On December 13, 2022, City Council approved the 2023 Budget per Ordinance No. 22-90, which included the appropriation of funds for the LART Fund.
On May 8, 2023, City Council received a presentation providing an overview of the role of the LART CAC, the mission of the LART Fund, and the application review process. The City Council was also provided with a LART Fund supplemental appropriation ordinance which reflected the event funding recommendations of the LART CAC for the 2023 off-cycle requests.
On May 23, 2023, City Council provided the first vote, in support, of the 2023 off-cycle supplemental appropriation for event funding as recommended by the LART Citizen’s Advisory Committee.
Financial Implications:
N/A
City Council Appointed Board/Commission/Committee Recommendation:
The LART Citizen Advisory Committee has been discussing and developing the new process beginning in the summer of 2022
Stakeholder Process:
N/A
Alternatives:
N/A
Recommended Action
Proposed Motion:
N/A
Summary of Ordinance Language
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