Short-term rental owners operating illegally in the city of Ouray will be fined thousands of dollars, be required to pay lodging taxes retroactively and be temporarily banned from applying for a rental license under a series of penalties proposed by the City Council on Tuesday.

City councilors informally directed staff to draw up an ordinance outlining the sanctions. They’re expected to formally approve them at an upcoming meeting.

Community Development Coordinator Lily Oswald has estimated ther...