HomeMy WebLinkAboutC32283 - Vacation Rental ComplianceContract No. C32283
CITY OF PALM DESERT
FINANCE DEPARTMENT
STAFF REPORT
REQUEST: APPROVAL OF CONTRACT NO. C 32283 , A PROPOSAL FROM
VACATION RENTAL COMPLIANCE IN THE AMOUNT NOT -TO -EXCEED
$21,600 FOR CONTINUATION OF A CONTRACTED PROGRAM TO
IDENTIFY AND BRING INTO COMPLIANCE PALM DESERT
HOMEOWNERS NOT CURRENTLY COMPLYING WITH PALM DESERT
MUNICIPAL CODE SECTION 3.28.020 — TRANSIENT OCCUPANCY TAX
(TOT) AND SECTION 5.10 — SHORT TERM RENTALS
SUBMITTED BY: Paul S. Gibson, Finance Director
DATE: September 24, 2015
CONTENTS: Contract No. C 32283 - Proposal
Recommendation
By Minute motion, that the City Council approve Contract No. C 32283 with
Vacation Rental Compliance in an amount not to exceed $21,600 to identify and
register non -compliant short-term rental properties in Palm Desert.
Background
On March 8, 2012, Council adopted Ordinance No. 1236 amending Palm Desert Municipal Code
Chapter 3.28.020 and adding Chapter 5.10 relative to Transient Occupancy Tax and short-term
rentals respectively. A professional services agreement received Council's approval to provide the
City with services to identify and bring into compliance unlicensed short-term rentals. The consultant
fulfilled the terms of the agreement by:
• Investigating ongoing short-term rental activity on various websites to identify unregistered
short-term rental properties;
• Designing a monitoring and licensing program for City requirements that will be part of the
new Short-term Rental Ordinance;
• Contacting unregistered short-term rental property owners; and
• Educating the community about the new Short-term Rental Ordinance.
As of July 1, 2015, 1,142 short-term rental permits have been processed. 791 of these permits
were issued to property management companies, while the remaining 351 were issued to
homeowners. Staff continues to receive applications on a regular basis. Transient Occupancy
Contract No. C32283
Staff Report
Approval of Contract with Vacation Rental Compliance
September 24, 2015
Page 2 of 2
Tax (TOT) in the amount of $528,991.00 was collected for FY 2012/2013 versus $621,299.00 for
FY 2013/2014, an increase of 17% over the previous fiscal year, and $775,280.30 for FY14/15,
an increase of 18.3% over FY13/14. To this end, staff wishes to renew the contract with the
specialty consultant in an effort to complete the project.
Online reservation sites and property owners are likely to be most active in the coming months
as Palm Desert experiences its "high season". Staff feels that this is the most opportune time to
engage a consultant to research and locate those property owners who may only operate and
advertise for a few months out of the year. Conducting this project in the busy season will provide
the City with the greatest opportunity to bring remaining property owners into compliance.
Fiscal Impact
Previously, staff reported that there are hundreds of unregistered short-term rental property
owners not paying Transient Occupancy Tax (TOT). A great deal of progress was made during
the first two years of this program, and its continuation, combined with the renewal of a
professional services contract, will assist staff with bringing the remaining unregistered short-term
rentals into compliance with Section 3.28 Transient Occupancy Tax, which will further augment
that revenue stream. As we have witnessed with the initial results of the program, bringing in TOT
and short-term rental licenses will provide a financial benefit to the City that will more than offset
the cost of this professional services agreement contract.
Submitted by: Approval:
ul S. Gibson, Finance Director John
muth, City Manager
G TinanceWiamh Ortega\Staff Reports\Short term rentals\STR Consultant contract renewal 092415.docx
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Contract No. C32283
Vacation Rental Compliance
Proposal
City of Palm Desert
September 15, 2015
Vacation Rental Compliance is offering the City Palm Desert the following proposal for contract services
to continue the implementation of the current short-term vacation rental compliance program. The scope
of work outlined below is for nine additional months, beginning October 1, 2015 through June 30, 2016.
Scope of' Work
1. Continue to identify new properties on VRBO with extra focus on Airbnb.
2. Continue to contact identified owners for registration.
3. Continue to inform Code Compliance of owners who refuse to register.
4. Prepare a monthly report on the progress of the program, which will be included with monthly
billing.
5. Contact rental agencies who have not complied with the ordinance.
6. Contact owners who do not have their permit number on their advertisement.
TOTAL (40 HRS PER MONTH AT $60 PER HR) $2,400 PER MONTH
x 9 MONTHS
Cindy Gosselin
President/CEO
Vacation Rental Compliance
TOTAL CONTRACT $ 21,600.00
72-877 Dinah Shore Drive, Suite 103
Rancho Mirage, CA 92270
(760) 799-5748
vocationrentalcomplionce@yahoo.com