The URL can be used to link to this page

Home My WebLink AboutC32280 Short-Term Rentals - ComplianceCITY OF PALM DESERT FINANCE DEPARTMENT STAFF REPORT REQUEST: APPROVAL OF CONTRACT NO. C32no , A PROFESSIONAL SERVICES AGREEMENT WITH VACATION RENTAL COMPLIANCE IN THE AMOUNT NOT -TO -EXCEED $21,600 FOR 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 27, 2012 CONTENTS: Contact No. C32280 - Professional Services Agreement Exhibit A — Property Managers/Individual reasons for non-compliance Exhibit B — Rental Registration Program Results as of 7/25/12 Recommendation By Minute motion, that the City Council approve Professional Services Contract No. C 32280 _ 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; 0 Contacting unregistered short-term rental property owners; and CONTRACT NO. C32280 Staff Report Cynthia Lee Gosselin Professional Services Agreement September 27, 2012 Page 2 of 2 • Educating the community about the new Short-term Rental Ordinance. To date, 102 short-term rental registrations have been received and processed as a direct result of the consultant's efforts. Staff continues to receive applications on a regular basis, and continues to pursue evasive property owners. 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). This program, 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 the 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: Paul S. Gibson, Finance Director 4JoM. Wohlmuth, City Manager CITY COUNCIL ACTION APPROVED DENIED RECEIVED OTHER MEETING DATE AYES: NOES: ;7)_ --- ABSENT:- ABSTAIN: LW -- VERIFIED BY: Original on File with City Office G:TinanceWiamh Ortega\Staff Reports\STR Consultant contract renewal 090513.docx Vacation Rental Compliance Proposal City of Palm Desert September 27, 2012 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 one additional year, beginning October 1 ", 2012 through June 30", 2013. Scope of Work 1. Continue to identify new properties on VRBO and additional sites. 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. TOTAL (40 HRS PER MONTH AT $60 PER HR) $2,400 PER MONTH x 9 MONTHS TOTAL CONTRACT $ 21,600.00 • One required expense will be the addition of minutes to already purchased disposable phone, at approximately $30. Cindy Gosselin President/CEO Vacation Rental Compliance 72-877 Dinah Shore Drive, Suite 103 Rancho Mirage, CA 92270 (760) 668-5963 cgosselin@dc.rr.com Short-term Rental Ordinance Non -Compliance Below are the responses we've seen and heard as to why a short-term rental permit is not obtained: Individual Owners • I wasn't aware that it is required / nobody told me / I've lived here my whole life • Seems unfair to send you (the city) money • My neighbor said it isn't required • My HOA/CC&R's doesn't allow it • 1 only rent long-term • 1 don't understand where you got the information that I rent my property (information was obtained through VRBO website [Vacation Rentals By Owner]) • I'm exempt because I only rent it once out of the year and I am a senior citizen • 1 live in a gated community Property Management Companies • We aren't sure they (property owners) still want to rent short-term • We will only send in applications/money as we start booking the property (even though it is advertised on their website as a short-term rental) and still have it under contract as allowing short-term rentals • It's not fair to target us; we just manage the property for them • That seems like a lot of work to do, we were just doing folks a favor in the past • The CC&R's don't allow it so we wont be sending you the money/applications • We are a small operation and you are unfairly targeting us • That's a lot of money for all the properties we manage • We thought it only applied to non -gated communities • You want one application for each property? Do you know how much work/money that is? TOTAL PROPERTIES INVESTIGATED AS OF 7/25/12: 463 NEW REGISTRATIONS RECEIVED 102' OWNERS WHO ORGINALLY ADVERTISED SHORT TERM. THEY OPTED TO CHANGE THEIR RENTAL STATUS TO MONTHLY ONLY 81 REGISTERED WITH CITY PRIOR TO PROGRAM 58 NEW REGISTRATION ON THE WAY 9 PROPERTY ADVERTISE MONTHLY RENTAL ONLY 67 TIMESHARE 3 OWNER TOOK PROPERTY OFF WEBSITE 6 NO INFORMATION AT THIS TIME/ WILL COME BACK TO THESE PROPERTIES 90 PROPERTY IN ANOTHER CITY �. SENT TO CODE COMPLIANCE 3 ISSUES WITH THIS PROPERTY/WORKING ON 10 PROPERTIES TO CONTACT 23