Finance & Services Committee - Regular Meeting

Welcome back to this biweekly meeting of the Budget and Policy Committee of Denver City Council. Join us for the discussion as the Budget and Policy Committee starts now.

Good afternoon, everyone. Thank you for joining us on this beautiful June afternoon. We have two exciting proposals in front of us, but before we get started, let's do a round of introductions. I'll start on my right, and then we'll go to the council members online.

Jamie Torres, West Denver District 3. Good afternoon. Diana Romero-Campbell, Southeast Denver District 4.

Good night, Denver's perfect day.

Laura Alvidrez, Lucky District 7.

good afternoon paul cashman south denver district six good afternoon daryl watson fine district nine hi everyone serena gonzalez gutierrez one of your council members at large and then we can go to the council members online um sarah parity your other council member at large good afternoon amanda sawyer district five

Awesome. And I think I may have forgot to introduce myself, Councilwoman Sandoval, Northwest Denver District 1. With that, I'll pass it over to my colleagues, Councilmember Alvarez, Councilmember Hines. Take it away. Great. Councilwoman Lewis.

Councilwoman Lewis, District 8. Wonderful. Thank you so much for having us. You all know us pretty well. But I'll give Councilman Haynes a chance to introduce himself again and talk. Any starting remarks you want to make, and then I'll jump in.

Chris Hines, Denver City Council District 10. This is actually our third time to Budget and Policy and really have done a fair amount of socializing. We're excited to give you the updates that we've had since the last time we came to Budget and Policy about best value contracting.

So we've been working on this for over a year now, at least. And we have been having ongoing conversations with the mayor's office, city departments, and a wide range of stakeholders from local unions, as well as some industry groups and community members. One of the things that has come up across all these conversations is the growing need for transparency in how the city spends its money and how we are choosing contractors. Denver is taking on more and more projects. Obviously, we all know about the Vibrant Bond and other projects coming to the city. And we have a lot of capital investment coming down the pipeline, which is really exciting. And people want to know if those dollars are being spent in a way that reinvests in our city, the workers, our local small businesses. We've completed the initial draft of the ordinance. It's currently under review. It's been shared. It's on Legistar. And one thing worth noting is that we've been deliberating about separating out contracts and service functions with the BVC process, and we'll get more into that. We're also actively coordinating with the mayor's office on Executive Order 8, which has been a topic of conversation. And this process has been built through real engagement, moving forward in a thoughtful, coordinated way. So what is best value contracting? This procurement method would move us away from low bid contracting and closer to best value. The reason we're pursuing this is that Denver currently lacks a consistent citywide standard for best value contracting. Today, procurement practices can vary across departments. In some cases, it still remains lowest bid as the primary determining factor. That approach may save money upfront, but it doesn't always account for project quality, workforce development, safety, contractor performance, or long-term value. We also hear regularly from small businesses and contractors that expectations can be inconsistent and difficult to navigate. This results in a system that doesn't always reflect the values Denver has repeatedly said are important, transparency, accountability, local economic opportunity, and responsible stewardship of public dollars. So what is best value contracting?

Oh, did I skip one?

Best value contracting allows the city to evaluate proposals based on multiple objective criteria instead of relying on one price alone. Cost remains an important factor, but it becomes one factor among several under this model. I'll hand it over to Councilman Hines. Thanks.

So we have eight evaluation criteria that we have so far. Legal, compliance, financial capacity, past performance, workforce practices, safety, compensation and benefits, project approach, and finally cost. Just to be clear, we're not saying that we should ignore the cost and if there are values, we should pay for them at any price. What we're saying is that it's more important that we think of cost in a suite of values, not just cost on its own. So the ordinance does touch on subcontractors. So we have in the past passed legislation about up the chain liability. This ordinance doesn't change the up the chain liability. So basically the values of the subs have to also reflect the values of the prime. Part of the process is the bidder submits the full subcontractor list with the bid and they should also have the same certifications. The gist here, just as when we talked about up the chain liability in legislation in the past, is we want to make sure that if If we are providing a contract to someone reflective of the values that the people of Denver want us to have, everyone should have that value, the GC and the subs. There are some appeal processes and emergencies should that be necessary. Really those are meant for just that, emergencies. So this has already been passed in both Adams and Pueblo counties. And if you have questions about Adams and Pueblo counties, we have people here in the audience who can help go into the details of those questions. contracts. So Adams County passed their best value contracting back in 2014. So they've had a dozen years to iron out the kinks to determine whether it was useful or not for them to pass best value contracting in Adams County. They reported, we met with Adams County elected and their county manager and they both agreed that they received as response to the legislation, they received higher quality contracts, the baseline standards were higher, a rising tide lifts all boats and the job sites were safer because the vendor wasn't having to worry about being on the clock so much Because of the importance of apprenticeship, Adams County was training their future employees as well. Again, Adams County was adopted in August of 2014. It applies to all builds and major remodels of at least a million dollars. Not only did they find the higher construction quality and that projects were completed on time more often, They believe that, at least in the Adams County implementation, that their costs actually went down. So before best value contracting was adopted, They only took cost as a consideration. There are two major relief valves that bidders would get otherwise to make up for that low-cost bid. The first is stealing wages from your employees, and the second is from change orders, as in, oh, you want this? Well, we'll have to change the topic or the... the nature of the contract and won't have to charge you for it. So it also created additional transparency as in the initial bid was far more likely to be actually what was provided. Obviously there are change orders, particularly in contracts that are sizable amounts, but they found that the change orders significantly decreased. So why now? As Council Member Alvidrez mentioned, I mean, we've got more than two and a half billion dollars in the pipeline, $920 million from National Western, $950 million from the Vibrant Dipper Bond, $530 million from the DDA, Downtown Dipper Authority, which actually is starting to get reinvested. And then we also have two, bonds from 2021 and 2017 that are also wrapping up their construction starts. All of those are capital projects. We've got a lot of things starting. We continue to authorize additional construction projects. Our airport is also undergoing additional construction projects. Along with all of those dollars, we wanna make sure that we have quality, safety, that we're reinvesting. If we're using Denver dollars, why does my voice go out now? I don't know. But if we're gonna use Denver taxpayer dollars or in the airport still Denver dollars, it would be best if we reinvested those funds back into Denver. We want to care about our climate. All of us care about equity and that transparency builds public trust too. Thanks. So again, the opportunity, there's the bonds and the capital improvement projects. Services, just again to identify it, at an earlier slide, council member Avijra has mentioned that we wanted to focus on construction projects with this first stab because services, most services, include a different set of stakeholders and they might even have a different set of values. So we want to make sure that if we're doing something like best value contracting that we can limit the scope of the conversation we're having. So this first pass is just for construction projects. So we have in the Council Member Alvarez said more than a year. I think we're getting close to two years that we've been discussing best value contracting and we have labor, labor's here. We have reached out to contractors, small and minority women owned businesses, the Hispanic Contractors Association. We've also had public engagement and we've reached out over social media as well. So in addition to coming back to budget and policy, we do have outreach. We do intend to do additional outreach. And we did have a meeting with the mayor's office last Wednesday, where we had the mayor's office, Dottie, and Den there to provide some additional context. And I'll talk about that more in a minute. And here we are at questions and discussion. I do, before I ask for questions, I do have a couple of questions I wanna ask myself and I wanna ask the mayor's office, Mr. Moreno, if you'd come to a microphone somewhere. Last Wednesday in our meeting with the mayor's office, I was asked two questions. If you could give a stab at those. The first question, if this were to pass, I know that multiple council members are curious about how rules and regulations will be created because it's my understanding and others that the mayor's office doesn't really do rulemaking. And so how does the mayor's office expect rulemaking to happen?

uh thank you uh madam chair uh councilman heinz uh dominic reno deputy chief operating officer in the mayor's office uh just want to thank uh the council sponsors for the time that we spent together last week talking through some of the uh intricacies of the proposal obviously so we do have um some ordinance language to respond to now which has been very very helpful um and already have seen some changes in the current draft that's uploaded to legistar from prior drafts which has been very helpful A couple things that I would just say related to kind of the questions that Councilman Hines posed. One is that, so we do have Executive Order 8, which has a provision that does contemplate best value contracting criteria. I would say the one piece there is that the executive order is specific to pre-qualification. This ordinance does anticipate pre-qualification and evaluation. So that's something that we would have to sort through of how we handle that. That could possibly happen through a revised executive order or something else. So we would work very closely with you all to figure that out. The other piece would be obviously one of the things that Councilman Hines and Councilman Alvidrez have rightly pointed out is that sometimes standards can vary between departments or agencies that are issuing the RFP and conducting the evaluation. And so, part of that is solving for that rules, the rules piece of the implementation of this. Rules and regulations, that's the word I was looking for. And so that could be conducted individually between each department and the mayor's office kind of making sure that there's consistency between each of them. The other option obviously is perhaps to utilize Executive Order 8 in a revised manner in that to kind of set forth kind of a consistent and uniform expectation from agencies where it relates to best value contracting.

And my second question, which you rolled into the first question, was if this were to pass, how would the administration modify X08? So thank you for that.

I just wanted to take a moment to thank you for your collaboration. I also want to thank all the unions here and Emma in particular. You've been helpful to get this to this point as well. And I wanted to mention we did talk to HCC and also the Black Construction Group. Just add that to our list of outreach that we've done and we're open to talking to more people if there's anyone we've missed.

So in addition to the two questions on the slide, is there anything missing from the engagement list? Are there other types of contracts that should be considered? I do want to propose this as a question. Our ordinance, as is in LEGISTAR now, talks about those eight criteria which are in the slides. having weighting associated with each of the criteria where each criteria would have a minimum of 25%, or excuse me, minimum weight of 5% and a maximum weight of 25%. So with eight criteria, weighting at 5%, that's 40%, which gives them a fair amount of range to choose how to weight the criteria, but it also doesn't allow them to do 95% price and 5% something else. So and I think that's it.

Thank you. We have several members in the queue. We have Councilman Torres, Councilman Sawyer, Councilman Lewis, and Councilman Pro Tem Ramiro-Campbell. Councilman Torres, go ahead.

Thank you so much and thanks to the sponsors. Good work. A couple questions because I do remember procure like general services coming to do kind of a presentation on where lowest bid is applied and where it's not. But can you remind me where exactly are we required to take lowest bid right now that this would modify?

I think overall when we looked at the city charter, you are required, it's an option on any contract to do lowest bidder, but I think General Services is here. They may be able to better answer. Director Gibson. Thank you so much.

Good afternoon. Michael Romero, General Services procurement director. So basically our charter basically lays out for goods and related services not construction that study for goods related services We're compelled to basically to take low bid meeting specification low responsive bid Essentially we lay out the requirements this product must do XYZ We allow for competition as long as the low bid that comes in meets the requirements of XYZ we're compelled to take that low bid and

This still doesn't touch goods, so goods are still taking lowest bid. Or services. Or services.

Good related services. In addition, there's another provision that's in the charter that says, also stipulated by code, we can also do requests for proposals. So we have a blend of options we can use. We can do a low bid. Or we could also do an RFP, which basically we can set up a criteria and essentially kind of lay it out. Most of the times we do an RFP, we usually do about 70% technical, 30% price. Sometimes that can fluctuate on the percentages. But in RFP, we're looking for more, not just a little bit. That's not always the ideal situation for us. So for more complex procurements, systems, platforms, just engagements that are just more complex, we'll typically use an RFP.

So this would be the area that would be most impacted by this change?

I guess it depends on how you ultimately lay this out. Right now it looks like it's just construction. If you were to basically put this into a general services area for goods and related services, it would basically be more applicable for an RFP instance.

Okay. Okay. Where we're currently allowed, you could choose which path you want to take. This one would obligate us to best value contract.

I can see there's some of those alignments because of what a little bit of what you have in best value is actually, actually a lot of what you have in best value actually is in alignment with basically what we're requesting for RFPs anyways. Background experience, sometimes benefits, things like that.

And so for construction projects, General Services doesn't always do those, right? You do none of them. So let me ask, so are you with the City Department? Yeah, did you wanna speak to that? Come on up. Introduce yourself for me, please.

Good afternoon. I'm Dave Ems with DOTI.

Oh, great.

Director of procurement and contracts. I understand it's subject to just construction at this time. Yes. Correct. Yeah, over the weekend, I was able to do a study of the top 200 U.S. cities in the country by population with references in quotes, and not a single one has eliminated lowest bid. And the federal government would take exception to that on some grants. So I just wanted to share that information. And I sent that to the mayor's office this morning. Good.

Okay, a question for you. You're currently allowed the two paths either, right? How do you determine which one you're gonna do right now?

Yeah, all but four of those 200 cities all do a hybrid approach and we do it based upon specification and or funding. Sometimes funding will tell us what to use. Because the more you have a defined spec, go build this bridge, federal government can say, give me lowest price. I know exactly what the requirements are. So many feet of runway, they know what the requirements are. And that's pretty cost effective. So that's how we basically decide. It comes from the specifications, known and unknown.

Remind me your name?

Dave Ems, E-M-S.

Thank you so much, Dave. That I think helps me clarify, I think, the lane that we're operating in. I do have a question for Dominic, if you can come up again real quick. Just what's involved in Best value contracting and evaluation and what has to be built out. I will say Santa Fe Streetscape's bids being done for best value contracting. It's great. Obviously, we don't have a path right now for applying best value contracting in evaluation, so I don't know what that means. that this would create for that.

Yep, thank you Madam Chair, Councilman Torres. So we're also kind of sorting through some of that. Most of how we apply best value criteria currently is all in the pre-qual. I think the intention of the sponsors, and I'll let them speak to it more, is to create a set of baseline values that you would also evaluate a bid from in terms of scoring a bid, and you would score them against those defined values set out in ordinance. Is that roughly correct, Councilmembers?

And I think as Council Member Alvidrez said, I really want to thank you for the meeting last Wednesday because we learned some things last Wednesday that kind of didn't know before. And so one of the conversations was about charter language. And Council Torres, I took another look at the charter, and they referenced one spot I think immediately below it. It even talks about the terms qualified, responsible, and responsive. Sorry. responsible and responsive and competitive selection process as used in this section may also be defined by ordinance. So the charter gives us the ability to define those terms. And while it wasn't in the specific charter snippet that we discussed last Wednesday, it is immediately below it. So I think as we're having new conversations with the mayor's office about the charter specifically, one of the things that we might talk about for discussion is instead of the ordinance right now or the proposed ordinance right now talks about attestation in the pre-qualification stage, perhaps these values would be in the pre-qualification stage which would which would allow for the price to be in the actual, you know, the evaluation stage. And that's just something that we learned last Wednesday in that conversation. Thank you again for bringing that charter language forward.

Okay. I guess I'll just leave with maybe a follow-up conversation about the hybrid. And if we're eliminating the possibility for Dottie or Parks or whoever does construction projects to do lowest bid, is there any circumstance where that boomerangs back to us in a negative way? If no other cities, according to Dave, are totally eliminating it, if they've channeled it for these limited options or whatever that is. That would be my only lingering question.

Yeah, I think that's helpful. When we're thinking about that, going through the pre-qual process would allow that to still exist for those federal reasons. So it would still be a hybrid. It would still be a hybrid. Okay.

Okay. I'll just have follow-up questions. Okay. Thank you.

If we were to move one of the values to the pre-qualification stage, then once the evaluation, the formal evaluation, you know, pre-qualification would be whether a vendor is responsive or not. And if they're marked non-responsive, then they can't actually be evaluated. And then the evaluation after we've provided our values and we have said that this vendor in bid matches our values, then in the actual evaluation we could evaluate price.

Got it. All right. Thank you. Thanks. Thank you. Councilwoman Sawyer?

Madam President, thanks so much, you guys, for this. I'm very supportive of it. Having looked into it and had conversations about it previously, I will say the Charter allows this. It is Executive Order 8 that is the challenge, because it is Executive Order 8 that says, and I quote, the lowest responsible bidder. So that is the space that needs to be edited in order to allow an ordinance like this to move forward because, and that is an executive order, city council does not have the authority to overturn that, neither do the voters of the city of Denver. That can only be done by the mayor's office, I think. So just flagging that for you all, I know that the mayor's office has committed to updating executive order eight, but that's the language that has to be changed in order to allow us to move forward. Question for you about, or maybe this is for general services, about how this works for like our small business contractors, kind of our, maybe we be an SBE programs, because if we're kind of looking at a list of qualifications that are written in ordinance and they're a growing small business that may not meet all of those qualifications yet, does it then, Disqualify them from, um, you know, from from taking work with the city of Denver. I just, I guess I need a little bit more clarity about how you go.

I just want to share part of the reason why we've been talking to, like, the Hispanic contractors and the black construction group to really add. And I think 1 of the things we're exploring is where do we add that value in here? Um, as far as utilization and existing some small business minority, maybe babies. minority women-owned business enterprises and the other thing that we, Councilman Hines and I have been talking about is do we take a tiered approach where one million to two million has a different criteria than up to over ten million because clearly a company that's over ten million will much more easily be able to have the apprenticeships and programs and you know, all of the benefits that they can possibly give an employee, whereas a smaller business would have more of a struggle meeting those requirements. So that's something we're thinking through and considering changing on. So I think those are really important questions. Go ahead.

Thank you, Councilwoman Alvidrez. Drina Gibson, Executive Director of General Services, and then we have the Compliance and Business Utilization section of the Division of Small Business Opportunity. To your question, Councilwoman Sawyer, I think those are really important flags, and we've had several conversations with Councilwoman Alvidrez and with Councilman Hines related to the Best Value Ordinance. In the conversations that we've had, it's really important, especially again, separating the construction side from the services side, whereby the governance for DSBO has an ordinance of its own, whereby it is talking about the oversight and the protections that exist currently for small businesses. When we start to talk about prequal, I would want to be, as Councilman Alvidrez has shared, really careful about the additional requirements that we put into the ordinance and attaching it to prequal, as that's already a very big barrier for small businesses. I understand what it does for the city in terms of its protections, but for small businesses, it's sweat equity to have to have all of this bandwidth around them in moving forward with pre-qual requirements. So I would want to see how we can alleviate that strain with anything that's tied to pre-qual, specifically for construction, because there are no pre-qual requirements as it relates to services. So that would be separate and distinct. As it relates to the MWBEs, again, protections, I think, are always wonderful in making sure that they have a leg in and a piece of the pie with regards to city contracting. So, again, as we continue to move forward, I'd love to continue the conversations about how to get that within the projects that come out through the city in ways that it fosters relationships between the city and small businesses, and then with small businesses and the large contractors.

One thing that I'll add is I have been having and I know Councilman Watson has been having conversations with contractors about the pre-call process being burdensome. I think the idea here with having to put this into the pre-call process would be how can we make the pre-call process maybe not less burdensome but remove the burden of the RFP process, potentially, where they won't have to fill out their apprenticeship and their EMR, their safety modification rate, and all of those other things because it's already been covered into the pre-qual. So that's a conversation we need to have with the small businesses themselves, but something we're thinking through because, again, we just found this out last week and just found out other information over the weekend. So thank you.

Council Member... Go ahead, Council Member Hines. Sorry, Council Member Sawyer, to your point about X08 and how it's the, that's where the meet, that must be changed. I'm not gonna say Trump's, but legislation supersedes any executive order. So we would hope that the executive branch would modify X08 in relation to this ordinance should it pass.

Okay, really? Yeah, thanks. Really appreciate that. And it's my understanding that the mayor's office is absolutely willing to do that. Is that right, Tom? I think you already said that. Sorry, you're like having to walk. Putting steps in.

Thank you. No worries. Thank you, Councilman Sawyer. Yes, we're open to having conversations with the sponsors around revisions on that. And I know they have been very open on having conversations about language in the ordinance. So we're working really well together. So appreciate that.

So last question, I know there are other members in the queue and I will probably have some follow up questions as some of these details start to get ironed out. But how does this work for the on call contract contracting process? Because I know we have kind of many of our agencies have a stable of on call contractors and sometimes when they put out quick work. task orders for bid they put them out only to those on-call contractors um and so just curious whether this would impact the on-call contracting process at all because some of those on-calls are construction um so just need to kind of i guess a little clarity around that if you don't mind

Yeah, I think that the procurement process for the on-call process happens when we assign that on-call contract and so they would be evaluated prior to receiving that on-call contract. Now when they submit their on-call proposal, they will put their values and everything into those as well as if we do move this into the pre-qual process then they would have done that even before they get to the RFP process. So I don't think it will directly impact how on-calls are assigning contracts. I think that's a good conversation and also part of the ordinance that they're working on reauthorizing around that process. Did you want to add anything to that?

We're getting nods from Dottie in the audience. But if you want them to say it.

Yes.

Okay, no, that's great. I really appreciate it. Just wanted to check and make sure that we weren't undermining that process because, you know, when we're talking about doing on call contracts to, you know. Everything from filling potholes to building, repay, resurfacing tennis courts. There's just a lot that could. I think get missed in this. I will say the other thing is that those on call contracts like for Dottie, for example, we just approved those and their five year contracts, I believe, or their three year contracts with two one year extensions. So they will be five year contracts. So I guess. Have you thought through the kind of long rollout that is going to happen with this when we pass it because of the. Just because of the number of existing contracts that we have.

It would be only effective for the new contracts. It wouldn't be retroactive for the contracts that have already been assigned. Unfortunately.

Right. I know that, but that's why I'm asking, like, so those contracts will not come up for another five years, right? So by the time we are instituting best value contracting principles with our on-call contractors, that will be 2031. Correct. Yes.

If we do it today, all the contracts in the future, we have to, you know, at some point we'll pass it and that's when we'll get the. Uh, you know, I would love for us to 2 years ago or 5 years ago, but.

It's great that we do it today and there's still lots of contracts that we assign every single week. So it will be effective. It will not be effective for the on call contracts that are already in existence though.

Okay, I appreciate it. Thank you. Thanks, Madam President. Thank you, Councilwoman Lewis, followed by Councilmember Parity.

I asked you to take me out. I'm in toys. I actually get to make lessons. Okay. Thank you.

Councilmember Parity? Hi, guys. Can you hear me okay? Yes. Great. Thank you. The first question I had is going back to the E08 issue. I think that we just heard an answer to this from Councilmember Hines, but I just want to make sure from our city attorneys, if someone's there in the room, that there's nothing unusual about the charter in the area of contracting standards that that changes the general standard that like legislation would um take precedence over an executive order i just want to make sure that that you know that operates as normal here and that there's no reason why um an executive order would um take precedence over an ordinance in this area i don't know if there's anyone there who knows the answer to that oh i see i see something working hi john uh jonathan griffin deputy legislative council

Did John join in?

Okay.

I don't think that the executive order issue is a big concern. Robert Wheeler? City Attorney's Office. Thank you. I don't see the X08 issue as being a big concern. You asked kind of two questions. Could you?

Yeah, my question is just, is there anything about the charter that would make an executive order take precedence over an ordinance in this area?

Not that I'm aware of. I think there are charter issues that we still need to work through in terms of low-qualified responsive bidder being embedded in the charter, and we'll continue to work through those issues, but I don't think that's tied to X08.

Right. I love the race of the attorneys. And then my other question is for the sponsors. First, I just want to thank you for this. I also am a big fan of it. And I'm really grateful to you guys for being the ones to put your shoulders to the wheel because a lot of us have been interested in this for some time. And it really just took a ton of work. And I know that it did. So thank you. And also to the general services and the administration and the unions and everyone else who's been working on it. My question is just a small one. There's a few, and I don't remember exactly what you have in your draft ordinance as far as types of worker violations that you intend to screen for, but I think that we may want to flesh those out a little bit more and just make sure that we're capturing slightly more worker protections in that. We've emailed about it a little bit, I think, between myself and Council Member Albedrez's office, because she's the one that did my briefing. But I just want to kind of re-up that ask and keep that on the table a little bit, because I think if we're, we just want to make sure that we're being comprehensive and there's a lot of different worker protection schemes out there that we should kind of be concerned with. So just want to put that flag down again.

Thank you, I would just say, thanks for meeting with us and all your recommendations and including the groups that you asked us to reach out to. I'm really excited to have your questions because of your experience in this area. And I think 1 of the things we're being careful with is just because a contractor has been accused of something, not wanting that to count against them, but also wanting to make sure they have good worker practices as well. So, I think we're balancing those as well as open to talking about what those worker worker violations are, because we definitely.

that's one of the main goals here is how do we support workers across our city okay yeah and i would be more like less concerned about trying to narrow down the difference between a complaint and something that was founded like i agree that would be fine to narrow things in that way more concerned about capturing the different types of protections that are out there not limiting it to just wage violations so capturing things like um discrimination law with disability, those kinds of things. But I understand. I think in my suggestions, I said complaints, and I understand the desire to narrow that down to things that went further than that. So that part, I have no problem with.

That makes sense. I appreciate that. Did you want to add anything? Thank you.

Thank you. Next up, we have Councilman Torres. Or no, can we go to Councilman Gonzalez-Gutierrez in the back, of course? Oh, Councilman Pro Tem, sorry.

Thank you. Thank you, Madam President. And thank you for bringing this forward. I know it's been a lot of work and the briefing was very informative. I did have a question about the capacity building for the small businesses and what would the requirements you had mentioned possibly a tiered system, but are there components in place to be able to not unintentionally exclude businesses and being able to build their capacity? to meet all the requirements.

So one of the thoughts, and I'm glad you're asking this again because this is a question that we have that you don't have to, not everyone has to respond right now, but we're still interested, is what if we set up a tiering system where any contract that's below $2 million it's priority for small businesses. I don't know exactly what that looks like, but if it's a basic, the value statement is if this is a contract size that a small business can readily accept, how can we prioritize giving that to small businesses? But we also have contracts that are a billion dollars. So, you know, a runway is one and a half billion dollars. And if we were to have large bids, obviously a small business would be, you know, would have trouble taking a $1.5 billion contract. So, question number one, what do you think about that tiered system? Question number two, if you're okay with the tiered system, what is that number? Is it $2 million, $5 million? And so I don't think we have to discuss and answer that now, especially since we have another presentation after this, but that's an open conversation that I'd be curious to get feedback.

Yeah, and I would just also say working with general services is important in their mentor-protege program and thinking about how can that be maybe, how would that factor into these criteria because I think that has been a great opportunity for small businesses to build a capacity is to be paired with a larger contractor on a project.

Thank you. And then I know that we've had other conversations of DISBO bringing forward some changes. Can you speak a little bit more? Maybe it's, Adrena, maybe you can speak a little bit more about how this all fits together or not. Well, I mean, because I feel like, I think I had those two briefings back to back and it just, they felt like they were very, yeah, can you just talk how they fit together? Because both of my briefings happened and it seemed like we were having very similar parallel conversations and I just want to know how they are.

Yeah, thank you. And I am inviting Adib up also, as the Division of Small Business Opportunity is living in both spaces. So I wanted to ensure that he has an opportunity to speak on his behalf as well. So I also want to make sure that they live in concert together. This is a huge endeavor where the Division of Small Business Opportunity is reauthorizing this ordinance for the next five to seven years. And we are trying to make sure that we have everything wrapped in there to protect and to grow small businesses. My hope is that the ordinance for best value will further amplify that and work in parallel with it rather than it being confusing for a small business or even a prime to comply with. So we've, again, had conversations, Councilman Alvidrez's office and our office on what those two areas look like. And so I think in the space of contract requirements, that's where the ordinance is really bolstering. And we've had some follow up and feedback that we've putting together in a memo, just that we want to make sure that it is clear with regards to kind of what DSBO can legally and defensively do so that it doesn't, you know, shut down the program, as well as where there is added benefit to support and bolster these small businesses. As it relates to the capacity building component of it with the citywide mentor protege program that lives within DETO and would be happy if you wanted to expand upon that a bit.

Executive Director Adit Khan with DETO. I'd just be happy to really engage in some dialogue. I know this is, at least from my perspective, I've kind of gotten the latest and greatest version of what it looks like today. I do have concerns about us creating additional processes. So, for example, the idea of putting all of this in the pre-qualification process puts a greater burden on businesses who might not actually be able to attain an RFP of just having to go through that process. component. I would love to think strategically as we go through the reauthorization to make sure that we're thinking about small businesses, we're thinking about their capacity, we're thinking about how much burden we're placing on them for the intended outcomes that we want to achieve. I think there's a way to get there. To be short, engaging in more dialogue, we'd be happy to be part of that.

I think it would be great if the if like all of the areas that the best value is speaking to small business that we can maybe with even the ordinance that you guys have drafted it redirect or reference the DISPA ordinance just so that there isn't a cross pollination in that space. So thank you.

Thank you, Madam President. Council Member Watson and Council Member Wallace Gutierrez and then Torres.

Thank you, Council President. I'll be quick. Thank you all for pulling this together. I think that makes sense. I know that we are in discussions on pre-qual. I'm very curious to continue those discussions and see what those impacts are. For best value, my recollection, and I don't remember if it's in the presentation, there are some DOTI contracts we've been in. that are best value. Is that correct? And can someone speak very briefly to that, whether it's the sponsors or someone from DOTI? A quick synopsis. I just want to refresh my brain if that exists.

Yes, Dave Ems again with DOTI. We do. On the on-call phase, we do qualifications-based, that entire round's qualifications-based. So are other hard bids and other types of contracts that we do. We do put criteria on there in addition to pre-qualification because we know what we're building better, longer down the road versus pre-qualification is good for two years. But specific proposal does have qualification factors in there as well. And you guys also have homework because you've asked me for some examples.

We did ask for it. Okay. All right. I think that's been part of our struggle through this process is they put out an RFP, they being a city department, and then it goes into this gray area where it's evaluated by appointees to a group. And what are the criteria they're looking at? It came up with the VO contract, it came up with the most recent airport contract that we had at Transportation Committee last week. And so thinking about how do we make that more transparent so we know what the criteria, it'll make our jobs easier because I know what we ask often is how is this, you know, the line workers came and talked about that contract and how it was affecting them. And is this better for workers that they're not gonna be on a W, for not a contract employment basis and what does that look like and so that we don't have to dig in every single time to what those details are, but we know that the criteria that we care about is being applied and being at least a minimal factor in that gray evaluation process that we don't get to see always those scoring sheets. I really appreciate that Dent did show us what their criteria are where we haven't always gotten that.

Love that. I look forward to continuing engaging in pre-qual discussions. Thank you, Madam President.

Thank you. Councilwoman Gonzalez-Gutierrez. Yeah, I'll just be really quick. Thank you so much for bringing this forward. Really appreciate it. I also had some questions around the pre-qualification piece as well, and I'm very interested in that conversation, especially in figuring out how we thread that needle to have some kind of pre-qualifications. I also think it might be interesting to know from some of the peer city, or you talked about Adams County, to find out what was the impact on small businesses for Adams? And it sounds like maybe Pueblo, right? Because Pueblo, as we know, they're a union town, right? And so they do a lot of this work. And so I think it would be really interesting to, as we are looking at lessons learned, to find out what has that impact been, if any. And so there's that, but then I am very interested in the attestation list before the pre-qualifications for any bidders to represent those city values. That is something that I think is really important that we are working to incorporate into this. So that's it. Thank you.

Anything else about Adams County or your conversations around that?

In the interest of time, no. We do have experts that were part of the process for both Adams County and Pueblo here, but I think we're over time.

And Councilman Hines mentioned some of the outcomes at the beginning.

Councilman Torres. Thank you so much. Councilwoman Sawyer asked a really important question about how this is applying to current on-call contractors for DOTI. We are using best value contracting in the bid for Santa Fe Streetscape with existing on-call contractors. So this isn't something we have to wait for, but it's something we can do now. So my future question to you guys will be, what are we, like, intrinsically changing with the ordinance change that isn't already captured in what we do now just like really like in a brief right and that can be the follow-up just because I know we need to transition I would just high level

quickly say that right now we don't know what weight is given to what what's we don't have a minimum floor for different things and so we don't get those score sheets so if we had those score sheets i could tell you more clearly but since we don't get those always it's a very gray area what happens in the selection committees and different agencies legally supposed to be pretty closed

It's meant to be closed, but you should have the score sheet publicly available. The scores themselves isn't as important as the score sheet.

Bacterias that aren't being scored.

Also, another question that we're trying to solve is different agencies have different approaches and we want there to be a more uniform approach citywide.

Okay. All right. Thank you. Thanks. Thank you. I will just say I'll take a briefing. I didn't have a chance to so I'd love to have a briefing on this because I have questions but in the same time I'll just postpone mine. Okay. Thank you. Next up we have seat tax for safe route to school proposal by Councilmember Parity and Alvidrez.

Do I have to?

I was trying to tell you to back down. I'll go ahead and just start by introducing myself and the policy and then we'll, well, I don't really, for the public, Flora Alvidrez, Councilwoman for District 7.

I just want to talk about something we're all aware of as we have come to another difficult budget cycle where we're being told that next year's sales tax revenue may actually come in lower than this year's revenue. At the same time, many of our transportation programs are already operating on a shoestring budget. Since I've been on council, I have moved a budget amendment for safe routes to school every year and it's a fight every single year to get the minimal funding that we get. The reality is that we've adopted really meaningful plans that are ambitious, that have community input, but we have not provided the funding necessary to achieve them. The Denver Moves Everyone 2050 identified transportation investments approaching $800 million a year to meet our long-term mobility, safety, climate, and infrastructure goals. Yet today, outside funding opportunities are shrinking, federal priorities are changing, and state budget pressures are increasing. The same story exists for Safe Routes to School. In 2021, Denver adopted a plan with a simple vision, make it safe, convenient, and fun for children to walk, bike, and roll to school. The plan sets goals of doubling the share of students walking and biking to school and eliminating traffic deaths and serious injuries involving youth. I found out just in the last few weeks that a middle schooler at Lake Middle School passed away from a traffic accident. Yet, since this plan has been adopted, funding has moved in the wrong direction. Today, Denver invests only about $2.4 million annually in Safe Routes to School. It has no dedicated staff anymore assigned to the program and is able to complete only a handful of infrastructure improvements each year despite serving more than 200 schools. Meanwhile, traffic deaths continue to rise. Families tell us they don't feel safe letting their kids walk to school. We continue falling short on our vision zero and climate commitments. And this proposal is about matching investment in our values as Denver grows and new large venues generate transportation impacts. We have an opportunity to create a dedicated funding source that helps us build safer streets, protect children, improve air quality, and expand multimodal options, and deliver on the plans that the city has already adopted. The question before us is not whether these investments are needed. We have already answered that through the years of public engagement and these policies. The question is whether we are willing to create a sustainable funding source to finally implement them.

Thank you, Councilmember. I'm Zach Burley. I'm the senior policy aide for Councilmember Parity. I'm just going to run through the remainder of our slides here so that we can maximize. Sorry, go ahead.

Can I say, no, you're totally fine. Can I say a word of intro too before you take it away? Zach, you and Ben and Councilmember Alvidrez's office have done exceptional work on this, so I mostly just wanted to thank you. And I just wanted to highlight on the flip side of what Councilmember Alvidrez emphasized, which I sort of heartily second about our how far we're falling behind the level of investment that we would need to meet our own plans which are you know take all of our staff put so much energy into developing these and then we just don't have the money to meet them as we all know um on the flip side of that um I think the reason that we've focused on this particular policy idea is that our large venues in Denver generate millions of car trips every year, and those create all of the wear and tear on our roads, traffic, pollution, noise, parking pressures, all of those things. And so we think there's an appropriate linkage here between our lack of funding to improve in all of those areas and the presence of these large venues, millions of trips per year. The current Bronco Stadium has 80 acres of parking lots around it that are only used on game days. And then keep in mind that our own city-owned and operated venues already have a 10% statutory free table tax or fee embedded in them that we charge people who are using our own venues. And yet we don't do the same for these large corporate operators. We just sort of eat those costs rather than recouping those real pressures that they create. And so with that, I will let Zach move to the rest of the slides. And I'm sorry not to be there in person. I'm really passionate about this and grateful for everyone's time.

As mentioned, you know, we know there's a lot of large stadium projects coming to Denver and these come with roadway wear emissions, air pollution, traffic, parking and collision impacts. I will also note that we have been falling behind on our climate goals within the transportation sector and these emissions are some of the hardest to abate. They generally require both a behavioral change of the broader population as well as public investment in alternatives. And as mentioned, we do have an existing seat tax that's a current 10% rate on city-owned venues. I'll note that generates about 22 million a year for the city on just the city-owned venues. And we have no comparable tax applied to private venues, creating that competitive disadvantage. In our search here for major revenue, we rejected a couple options. Sales tax, we've seen in the past that we're nearing a diminishing rate of return if we increase the sales tax rate. Additionally, voters rejected Measure 2R in 2024. Initially, Councilwoman Alvidrez had been looking at a property tax. In talks with DPS and DCTA about that, we know that they're looking to put a mill levy on the 2026 ballot. So we wanted to be very cognizant of competing measures there and not wanting to interfere with what has been a very long negotiation. So we steered away from that. We also looked at the fee direction as opposed to a tax. The problem with fees typically tends to be that they're hard to scale and we are looking for scaled investment and then they tend to be flat rate under TABOR, meaning regressive in their impacts on the general population. So what we did land on here is a seat tax on large venues to be proposed to Denver voters on the November ballot if Council approves the proposal. What we are looking at right now is a three-tiered rate on all venues with over a thousand seats. A 5% rate on tickets under $100, a 10% rate on tickets between $100 and $250, and then a 15% rate on tickets over $250. We've baked in some big exemptions here, one of which, of course, is the city-owned venues. So that would exclude like your Red Rocks, your Denver Coliseum. I believe it's assessed at the National Western Center as well. We exempt small venues under 1,000 seats. We looked at exemptions that other jurisdictions have for their seat tax or comparable amusement tax. So we exempted youth athletics, K-12 and higher education events, as well as non-profit or amateur events. And this is a question that came up frequently in stakeholder and our early briefings so far. This does not apply to resale of tickets. The venue would be responsible on collecting for the original ticket sale. So those are some of the basic exemptions there. And then on the flip side for where we want the revenue to go, we have identified three big buckets. It is not any sort of ratio or pre-allocated amount between those buckets. Just generally all of this revenue is eligible for all of these buckets. Those three are Denver Moves Transit Plan, which largely would address one of the areas we're trying to get to, which is service routes around RTD, including event days at large venues, Safe Routes to School Action Plan, as Councilwoman Alvidrez mentioned, huge desire for council, and there's a huge amount of investments needed within that plan. And then the final bucket here is a little bit general, and we're trying to workshop language to make sure that this is tightened up before it would go to the voters, but multimodal infrastructure to reduce traffic and emissions. And that speaks to the attempt to mitigate those climate impacts relating to our transportation. And some of the examples, as I pointed out, RTD service routes trying to provide additional transit options for people attending at these large venues, school area traffic calming, bike lanes, pedestrian crossings, first and last mile infrastructure, as well as micro connector services. And just to sum up here, some of the advantages we see here, of course, equity. The tier rate ensures wealthier buyers are paying more. We're also looking, in general, in these large venues, these are typically closer to a luxury good than an essential. So trying not to tax core purchases by people that sometimes are implicated through a sales tax. Policy harmony, we know that these large venue impacts are creating transportation. impacts on our city and so the revenue would directly be able to mitigate those competitive balance between city and private venues safety needs we know that more denverites are dying from traffic related collisions than from gun violence and then of course climate to speak to our mode shift needs and with that i'll turn it back over to the council members to issue any closing words

Go ahead, please.

Are you okay to do that, Flora, so you can do the actual closing?

Sure. The only thing I wanted to say in addition to all of that is that really want to emphasize that we've gone to the voters for sales tax so much and sales tax is so much more regressive than something like this ticket purchases are by definition um so you know we all love to go to our venues and to go to entertainment but um they are really um on the edge of the more like frivolous and luxurious kind of spending especially when you start talking about the tickets that would be taxed at the higher rate under this tiered proposal um you're only buying those tickets if you have the disposable income to do it and it it's quite unlikely that you're gonna be deterred from those purchases by this level of fee or charge. There's lots of fees and charges that all of the private actors involved stack onto these tickets and people continue to go. So I feel like when you contrast it with sales tax, which we sent to the ballot, for example, with 2R, the equity angle becomes really clear. That's what I wanted to say. Thank you.

You know, we've been talking about this a while and looking for funding sources and I agree this is it's been really tough to find anything. I think people are struggling all across our city. And so something that is a luxury that many people can never purchase is maybe a good option. So definitely want to hear the questions and. That you all have? Great.

Thank you. So one thing before we get started. Is there not any ballot language? Because there's nothing uploaded. So is there nothing for us to opine on but the presentation?

No, we don't have an official draft yet.

Okay. We have Councilman Sawyer, Torres, Cashman in the queue. Councilman Sawyer, go ahead.

Thanks, Madam President. I have a number of questions, and I really appreciate both Councilwoman Parity's office and the advocacy group briefing me last week on this. So I'm going to go. I know there are a lot of questions. people in queue and not a lot of time left, so I want to just make sure that I get these questions out, and then we can talk through it more. But the first one is just on the stakeholder piece. I know you presented on the option of buying up RTD service. Have you talked to RTD?

No, we have not.

We've restarted up an email chain with Deborah Johnson, but we haven't gotten deep into the proposal at this point.

Okay, because the Denver Moved Cherry Creek plan makes the recommendation to buy up service for Cherry Creek through RTD, and we tried to do that, and RTD declined because they didn't have the drivers. This was about 18 months ago, so I know that there have been some changes to routes and changes to the number of staff. Nothing of staff that they have, but I do. Yeah. And so next question, have you talked to the stadium district? Because the course field and mile high or whatever we call it now are in a stadium district, a state level stadium districts, and they're paid into by the entire all the cities in the front range. And so I'm just curious how that would work. Like, can we impose a tax or a seat tax that only goes to the city of Denver? Or does that have to be split up amongst all of the cities that are paying into the stadium district?

Can I answer this one?

We're going to call a phone a friend. We're going to call our lawyer.

Okay, great.

Jonathan Griffin, Deputy Legislative Counsel. Yes, at this point, we have no concerns that Denver can assess this tax, and the fact that they're in a state stadium district doesn't affect anything.

And then just in terms of the funding amount that we think we're going to get, so how much money do we think annually we could pull in on a seat tax for these large venues?

That's an excellent question. We've been trying to do the best research we can on that. We spoke with Department of Finance last week, but just looking at some very rough estimates of the three largest venues, looking at Coors Field, Empower Stadium, as well as Ball Arena, If we had assessed a 10% tax rate on all major sports events and concerts that have been held at those three venues alone, we'd be looking at around an average of $30 million a year. So that's not even extending to any of the other potentially impacted venues, and those are using relatively conservative estimates of ticket price, but a lot of that data is privately held, and so we're doing our best to estimate with what we have.

Okay, so Zach, I have a few, I think, additional questions on this piece then because when I spoke to you guys last week, the advocate said something different than what the proposal is that we're seeing today and that you guys presented to me last week. So is it a 10% seat tax? So on the sale of one seat ticket, you are paying an additional 10%. Is that the proposal?

No, the proposal that we have today is this tiered rate. I simply use the 10% estimate as a ballpark estimate because we don't have precise data on where each of those ticket sales price would fall within the tiers today, if that makes sense.

And can I get in here on the second part of that question? Because I think Council Member Sawyer, what you're referring to is that we've had back and forth from advocacy groups about instead just taxing the actual revenues. In other words, taxing the venues instead of taxing each ticket purchase. And I think from my point of view, taxing the ticket purchase again is more akin to a sales tax it's something that has a very small impact for each individual ticket purchaser and shouldn't impact the venues that much and so i think i'm probably more inclined in that direction personally but i understand the advocates um raising the sort of and actually to me it's a question i would be interested in knowing people's positions on the body if you all have a strong preference that we actually try to tax just the direct revenues from the venues um we would be interested in hearing that But I think the reason places often do this as a ticket purchase instead is because it's just spreading the impact, you know, that's very small to individual consumers who can afford it. So, but yes, that's probably what you heard from advocates.

And I would just add that in my research, that has been done before and the other, to my knowledge, has not. So putting it onto the ticket itself has been done before, whereas charging for the overall revenues hasn't, from what I can find.

Okay, thanks for clearing that up for me a little bit. I think I need to know, I need to understand more about that for a couple of different reasons. The first is I don't, $30 million, like we don't even know if that's really the number that would be coming in. And so that's a little bit, it's a little bit hard to approve something to go to the voters when we don't actually know the dollar amount that it would be kind of bringing in, I guess. That gets a little confusing. It makes me feel a little bit uncomfortable. I will also just say, and Zach, I told this to you in our briefing the other day, the Sawyer family purchased four tickets for me and my three teenage girls to go to one Avalanche playoffs game. And we will literally have to eat at home every night for the rest of 2026 in order to be able to pay for that. It was totally worth it. But the purchasing four tickets, the number of, the amount of fees that are already associated with that were the cost of a fifth ticket. they added up to between those four tickets, the cost of one more ticket. So I just, I would like to see an economic impact study, I think, on kind of what this would potentially do because the revenue that our community partners, our sports teams and our large venues provide to the city of Denver is already pretty extraordinary. We've seen, like, for example, the economic impact study with the National Western Center in two weeks a year being almost $200 million of benefit to the city and county of Denver. So I'm not convinced on this at all. It feels like the money piece isn't solid and I need to know a lot more about that. And I also I'm just not convinced that the way to go is to ask our residents who are already struggling in the most one of the most expensive states in the country to to pass this additional cost on to them. So I will just I'll leave it there. I know there are other people in the queue. I'm just I'm not convinced that this is the right way to go. Although I do think it is a really valuable thing that we need to address. So thanks.

Thank you next step we have council and tours followed by council member. Thank you 1000.

Capacity feels like midsize. So, how did that arrive at the threshold for large venue? When, like. Levitt is like 3,000. No, I think it's about 6,000 that would be considered a large venue. In my mind, it doesn't feel like a large venue. Mission Ballroom is half that size. So just wondering how you arrived at maybe that threshold number.

I think that's a great question. I'll let Zach answer. I just want to add that Levitt as a nonprofit would be exempt from this.

Yeah, it's somewhat of an arbitrary threshold. I think that is something that we've been trying to take feedback in our briefings about its appropriate level and whether or not that should be adjusted, as well as trying to take feedback from other venues to see if that's a number that should be shifted. Frankly, it's a nice round number and that's part of the one of the reasons we chose it, but looking over the threshold of of venues, this would exempt most of the smaller type ones that we wanted to, that we were certain we wanted to keep out, and then would serve as a good starting point for conversation with the rest of council as to whether or not that was the right threshold.

I think that's a great point, that is that even a large venue. Yeah, go ahead, Council Member Ferri.

Yeah, I just was going to say that I think the 1,000-seat venue By definition, just the complexity of the operation, the amount of revenue coming in, they're just more professionalized, larger. They tend to be more owned by corporations more of the time. So you can see the actual list of who it impacts in Denver. And maybe we want to make it 1,500. Maybe we want to make it 3,000. We're definitely open to that. But I think we're just looking for that point where you're capturing places that are just larger operations and therefore more stable and all of that.

It might be more like 5,000. It might be helpful to look at how does the market of venues categorize their sizes? Because it just might be hard to apply our definition of large to something that someone else considered mid or even small. What I was looking at was like what's the hit if it's 10% before I knew Levitt would be exempted. Their only ticketed event is the Great American Beer Fest and if you buy the two-day ticket, it's $120. That's another $12.09 added to it which still which feels substantial. Mission Ballroom, Violet Femmes, $78. 5% is $394. So just to give a visual, that might be helpful in kind of bringing forward some examples, particularly if you think about Coors Empower and Ball and what those arenas, those would definitely be in my mind as large venues and what that does to each of those ticket sales. as well as the bookings of group sales. So season tickets, things like that would be of interest to me. I think those are, and then which ones fall into that category. Maybe the next time we see, I might not even have some in my mind of what would qualify that would fall under this. So that would be of interest. But like Councilman Sawyer, I share some of those same questions. The only other one that I have, and it's actually for Dottie, and we can follow up on this. Safe routes to school construction. from my recollection, isn't just funded by the Safe Routes to School allocation. It's also funded by CIP, by other sources that meet the need. I'd be interested in how much other funding supports Safe Routes to School work that isn't in the budget book under Safe Routes to School budget. That would be of interest to me as a follow-up. Thank you.

And I think that's a good point. And we are receiving some grant dollars, but we need to have matching funds on our end. So I believe the Safe Routes to School allocation is our Safe Routes to School allocation. But we do use, Dottie has been great at leveraging outside. I don't know if you wanted to speak to that at all.

Hi, Amy Ford, Executive Director of DOTI. Just to answer your question, often it's about half plus a little bit more. So in the last year, prior to your allocation of $1.6 million, we had about $1.9 or so, give or take, in DOTI Denver dollars allocated to the Safe Routes to Schools. We had a match on the other side of that from CDOT through different grants, through different dollars that were coming through them, of another one plus million dollars. In addition to that, obviously, our CIP dollars are spent in different things attached to improving routes to schools and such. So let's say last year we had around $4-ish, $5 million or so, of which were counted as routes to schools and that kind of thing. But designated programmatically, you're absolutely correct in that we were around under $2 million for that. And I think that this was talking about addressing that side of it. Okay.

And then one more thing on that is just one example is that recently the Stanley British Primary School in Lowry had a Safe Routes to School funding project, and it was $1.2 million. So that tells you that this might help two schools.

Correct. Depending on sort of the source of what you're trying to accomplish, whether it is from small raised sidewalks, as Alan as well pointed out in his presentation, in other words, to large traffic signals or otherwise, depending on that, the projects could vary from several hundred thousand dollars to more than a million.

thank you councilmember cashman thank you president um thanks for the work you guys are doing you've identified a critically important area that needs to be addressed it's embarrassing what we think what we claim to spend on safe routes to school no matter what part of the budget it comes from the need is astronomical and our spending is miniscule and I'm really troubled. I really appreciate that you're looking for other than the traditional, let's boost the sales tax, let's boost property taxes. My, what available extra money I have in my budget, I spend on live events, mainly music, occasionally sports, and as Councilman Sawyer said, It took my son, a couple of grandkids to see a Nuggets game. And I'll be it. When I go to live events, I like good seats. I don't want to sit in nosebleeds. I'm priced out. It's an astronomical amount to take a family in good seats to a live event. And I don't think it's just wealthy people who buy those tickets, it's a lot of people who are saving up and saving up to try to get them. One thing I wondered in the area where you're trying to make the amount that you're taxing city-owned venues and non-city-owned the same. We're charging 10% to city-owned, right? I wonder if it would be worth considering upper-level tickets at those events, adding another 5%, just because the volume of seats that you're getting. And again, I am still thinking, wow, is this gonna, How's it gonna affect the number of tickets sold, who they're sold to, and so on. I also wonder, and this is not thought through, I don't know how you would even do it, but to tax the ticket resale companies rather than just the face value people. Because the ticket resale companies in a lot of situations are really jacking the prices. through the roof. The last thing I'm wondering, do you have any, and you kind of dabbled in this area, how many tickets are sold at each price range would be really interesting. And I'm also wondering if you've had conversations with our vendors, with Red Rocks, with Ball Arena, et cetera, et cetera.

Councilmember Cashman, to your first, the first component of your question, one thing I want to point out about large venue tickets is that there's a lot of scholarship out there around areas where pricing has been the most impacted by algorithmic pricing models that basically set out to charge people as much as they can get from us, basically, instead of what we can afford or what their actual costs are putting on the events. And entertainment is far and away the area where that's the most pervasive. You hear about it with rent even, but these kinds of tickets are essentially just being set by the most they can get people to pay, not by what people can afford or what it actually costs to put on the events, which is why these entertainment companies make so much money. If we add a little bit of a fee,

Councilman Paradis, we literally only have seven minutes and we have like four people on the queue still. Okay.

Point being, it's an area where the likelihood is that if we add a fee, the companies can adjust their pricing if that's going to make it a barrier for people to buy tickets. They have a lot of cushion in their prices because they've maximized what the market will bear. And I'll let Zach answer the part about resale.

Yeah, real quick on resale. We are just applying this to the base ticket sale. There was an example of Chicago where they litigated with StubHub over resale tickets, and there are many circumstantial differences, but in that case, StubHub ended up winning that the city did not have authority to issue a tax on the resale of the tickets, but only on the original one. So just flagging that as a case example that we have found so far in our research for resale and why we've kept it to not applying to resale. Appreciate that.

Well, go ahead. Do you all do outreach to any of the venues? We haven't talked about that.

Our advocates have done a little bit of outreach to a few of them, but no, we have not done a comprehensive outreach. That was our next step. I'm sure they won't be thrilled to death.

They're really excited to talk to us.

Council Member Watson?

Yeah, I'll be very quick. Thanks so much for the work on this. Absolutely, there's need for additional funding. Lots more information is needed from actually looking at what It's going to be proposed. I'm curious on AIG Live Nation. Have you all have them on the list and look at since they do the promotions? The number was going to be one of my questions from Councilwoman Torres that asked as far as the sizing. When I go through the list of my groups I think is about, I counted about 10 organizations, not including National Western and folks who are exempted, just in District 9. And so I'm looking forward to leaning in a little bit more on that. The seat tax or any tax at this point is of concern to me. So, but looking forward to having further discussions with you.

Awesome. Council Member Hines.

Thank you, Madam President. I wonder, a fair amount of the events that are held at Civic Center Park also have more than 1,000 people. And so I don't know that is a city-owned venue. I don't know if we charge 10% or if that's like more an ad hoc event as opposed to a venue. Is that the case?

for the current 10% tax?

Your proposal is, you know, 10% on... One of the tiers? Yeah. So, Civic Center Park is city-owned, but I'm trying to find something similar that isn't city-owned. But the general premise is it is a public area, maybe Fiddler's Green, but that's not in Denver, some sort of outdoor venue that draws more than 1,000 people. Would that be subject to the 10% tax?

Our current proposal has not yet extended to those, but we have received questions about major events like UMS or other sort of large non-city held spaces that might have similar transportation impacts, right? And so that's just, go ahead.

Yeah, I agree with that. And I think one of my concerns is that artists are already not paid enough. So looking at things that are artists, local small artists driven is a lot different to me than these major names that come to these major stadiums. And also athletes that make millions of dollars compared to athletes that are not paid a fair wage. So thinking about how do we make it an equitable system is something we're thinking about in that tiering process.

I'd be interested in the analysis that you use to come up with the $30 million. Obviously not now. And one other thing. Oh, alternative funding sources. So I'm guessing you're gussying up the Transportation and Mobility Special Revenue Fund. Is that part of this or is that separate?

That's a separate conversation.

And then other funding sources like demand... TNC fees or... Yes. TNC fees or parking meter demand fees. I wonder if those were considered. I'm totally on board with the cause that we're trying to, you know, the problem we're trying to solve. I think everyone here, the question is more about how to fund it. And so I wonder if other funding sources were considered and discarded or if this is where the depth of the financial analysis has been is in the seat tax.

They're considered and on the table for the special revenue fund as a whole. I think there's a lot of problems we're trying to solve in DOTI in particular. One is the parking magistrate, right? So we're thinking about that. We're thinking about preserving funding for the mobility from the other funds that are available. And so for We're trying to focus on this particular ballot initiative. Those fees, we don't need to go to the voters for. So we're thinking about those separately. And then the council as a whole in the budget letter last year asked for an analysis of the fees and what we could potentially look at when it comes to those. And we're waiting to get that report back from the Department of Finance, just to be clear.

Thank you. Thank you, Madam President.

Thank you. So since I don't have the ballot language in front of me, are you talking about a sunset? Because that would be a huge question for me. Like, is this perpetual? Is this going to sunset? Is this... And then when we take in, if this were to go to the voters, the coalition building, I understand the advocates and we all need that. But compared to, like, the two... What was just presented in front of us, like the Best Value Contracting had the whole list of outreach that they've done.

Who have you outreached to? I mean, we've been outreaching with Sweep and, yes, Delver Street Partners. I don't know if you have other people that you want to mention. You mean the people who would be impacted, like Light Nation? Yeah. I've reached out to them. We're working on scheduling conversations. I think the truth is that they're not excited about this. How are they going to partner with us on this? How are we going to get the data that we need? It's going to be an uphill battle and I don't think that we have to bend a knee to them necessarily. I'm willing to talk to them and trying to have those conversations, but I am concerned that we don't want that to hold us up when they may not want to be a partner in this because they You know, it's not necessarily in their personal best interest. Every dollar they lose coming back to the city's funding needs is a dollar. Maybe they profit. I think that's the reality of the situation. And council president.

Yeah. Sorry. I can't tell when it's my turn. I'm so sorry, guys. I just wanted to say we we intentionally wanted to come to council first on this. And so this is. you know, it's budget and policy. I know we're on a short timeline to the fall, but we intentionally wanted to talk to council first before we took it a whole lot more broadly, because if it just doesn't have any, you know, any pathway, then it's not worth sort of confusing those conversations, especially when some of the large venues are so involved in city processes right now. So we intentionally wanted to come to you all first. But it is, just to be clear, like we, in terms of funding sources to Council Member Hines' question, Considering that we already charge 10% sales tax and we don't do it on food and other essentials, but we do it on a lot of things that are more essential than these kinds of tickets. This to me seems like a really logical and promising funding source, even when we think about people's pocketbooks and how stretched they are, because we charge sales tax of nearly 10% on the vast majority of things that people buy. And these are much more marginal kind of purchase.

Let me answer your question about the sunset. We had not considered that at this point. And under taper, you can remove a tax quite easily. You just have to go to voters to ask for it in the first place.

But I don't think the need is going anywhere. It has to be initiated.

I mean, it has to be council approved. And it has to go through the same exact process to remove, to undo something as we are doing right now. I don't think anything, I'll just say as a council person, I don't think anything is easy. I don't think any of these conversations are easy. I don't think that you all have been wanting to have this, whatever you want to call it. The difference is, is the 10% for the city, it goes to the maintenance of those facilities. And so it's actually something that we can see, like it's the maintenance, right? I have a hard time thinking about, I would love to see what plans this could implement because I don't, the Safe Routes to Schools, I think it's great. I want safety around like our high network injury. Yeah, and none of my schools are on there. Like hardly any of my schools are on the high injury network. And yes, I want Safe Routes to Schools. And my reality is I don't actually have kids anymore in schools. So I had to follow up. Sandoval School to the Gals and then Bryant-Webster and then Centennial and then Skinner and then now North and now they're gone, right? And as I've worked with constituents, they always want stop signs where their kids go to school and then they go to high school and they're kind of out of sight, out of mind. So I would love to see how this actually implements what the Department of Finance says. What's the amount? And then we could actually look at the plans. What plans could we get done? Because When we worked on to our, it was competing ballot initiatives and I was one of the drafters for that affordable housing. So for people who are wondering it's the affordable housing, it was vague. No one understood where the money was going to. No one understood how we were gonna pull down the money. No one understood what plans, what it was going to implement and how we were actually going to get housing. I wanna make sure if we go to the ballot, I wanna know exactly where it's going in, what special revenue fund it's going in, All the specificity that you all asked all of us who were sponsors of the affordable housing that we worked on with a really quick time frame similar to this one to get to a November ballot have that much specificity in front of us as well when we go to the voters.

I appreciate that. And that we're pointing exactly to the plans, I think is a big difference because we, these are the plans that we've worked on that have been implemented. And then we have some of the breakdown, which we can continue to break down. But just for safe for us to school about 250,000 dollars for 60 cross guards could be immediately implemented. Every very successful teacher champion program, bike buses to going to schools would be $500 for a school to have that. And I think- And are these all city funded? These are all specific. Well, these would be grants.

Yes. Well, some of them would be grants. Right. We had the bike bus in North Denver. Alan is my constituent. He's been awesome. But that's not a city funded thing. But it could be. Okay. Okay. And then my last question is, is Safe Routes to School federally funded? What if it went away?

Well, it's our plan. So our plan wouldn't go away. Our Safe Routes to School plan that Dottie worked on would not go away. Neither would Denver Moves Everyone. And I think we're trying to be thoughtful by, if it were up to me, honestly, it would be just Safe Routes to School. But because we want to be inclusive of everyone and the needs of the city at large is why we expanded it to include the Denver Moves Everyone and the transit options. Exactly. And then when, just to clarify, when it was asked, Cherry Creek asked about having the RTD buy up, there was no drivers. It was during a driver shortage. So the hope is that it could be different today. Okay.

Well, thank you all. We look forward to next steps on this one.