The Grand County Board of County Commissioners (BOCC) recently heard updates about some of the community’s most followed topics. The Grand County Library District was present to discuss happenings in Grand County’s libraries and the Short-Term Rental program was reviewed, including ongoing issues and proposed solutions.

Library District Update
Representatives from the Grand County Library District (GCLD) recently provided the BOCC with their annual organizational update.

President Sally Leclaire opened the presentation by expressing the District’s “indebtedness to the community for their support, patronage, volunteerism, and belief in [GCLD’s] ability to grow, adapt, and evolve into the libraries of the 21st century.” She expounded on the idea of growth, emphasizing a new “buzz” in our libraries, created in large part by the increasing numbers of young people utilizing the library for not just reading and studying, but for socializing and the “build-up of camaraderie.”

Executive Director Stephanie Ralph continued the conversation, thanking the County for their ongoing support of the Library District, especially the Hot Sulphur branch, and recognizing that the District is operating with a full board for the first time in a while. She echoed an earlier gratitude expressed by Leclair toward the Friends of the Library, for their “energy, creativity, and commitment” to fundraising and support of the District.

Ralph also recognized the changing role of libraries in our culture. She indicated that the District was discussing such things as where they may be in five and 10 years time, how they’re identifying and serving the community as communication continues to change. She also indicated our libraries becoming places for more community interaction. “It’s very exciting, very engaging,” she said.

She mentioned a number of the District’s programs and their expanding participation. The online high school, she reported, currently has 10 students working toward their high school general equivalency diploma and a recent preschool story time had 60 attendees. She stated that while “the future is largely unknown, we’re in a good place at the moment to deal with the changes that are coming.”

Finally, Finance Director Tara Thompson (Ingle) updated the BOCC on the GCLD’s effort to create a balanced budget for 2017-2018, in line with the new budgeting being done at the County level. She stated that the District had been operating on reserves for the last few years and had taken serious efforts to reduce expenditures since 2016. While she stated that those actions had been largely successful, the severity did not lend to a “sustainable model either.”

In response to questioning from Commissioner Rich Cimino, Thompson indicated that a forecast drop in reserves from $3 million to $2.5 million in 2019 and beyond was due to a planned $1.2 million debt payment scheduled for 2019. The payment will be made from the debt retirement reserve created by the 10-year 0.95 mill levy approved by voters in 2016 for the express purpose of paying off the debt accrued for the construction of the Granby and Juniper Library facilities. Thompson noted that the District plans to retire the debt 10 years earlier than the 2032 due date, thus releasing an additional $300,000 back to the operating budget. The timing should be good, she said, for the Library District who is anticipating a 6.11 percent drop in revenues due to the State’s 1982 Gallagher Amendment which will see cuts to property tax rates in 2019.

Short Term Rentals Review Workshop
Commissioners recently hosted a workshop to review the Short Term Rental (STR) permitting program put in place in May 2017. The purpose of the workshop was to review the current resolution and related budgeting and operational procedures, including such processes as making application, filing a complaint, and enforcement.

Community Development Director Tom Leatherwood, who supervises the program, began the workshop with a review of revenues to date. He indicated that since implementation, 519 permits had been issued under the program, bringing in a total of $77,850, with 390 having been issued so far in 2018, with $58,500 in revenues. An estimated 325 STR advertisers remain non-compliant with approximately $43,875 in permit fees still to be collected for the year.

Leatherwood then discussed budgeting shortfalls seen in operating the program. Looking only at direct costs– such as personnel, management, facility, and supply costs– he compared the total estimated revenues of $122,625 to estimated annual direct cost of the program at $226,219, and described a shortfall of $132,787. The direct costs consisted of about $150,000 in personnel costs, which accounts for not just STR staff, but a total of about eight County employees who are “devoting time to this, when they should be doing something else,” interjected County Manager Lee Staab.

Leatherwood then attempted to add in impact costs, such as increased road maintenance and law enforcement needs with an increase in visitors. With a “conservative” impact cost of $250 a year for each of the nearly 850 STRs operating in unincorporated Grand County, he predicted an even greater annual shortfall of around $316,000.

Leatherwood and Staab both emphasized the circular way in which STRs impact the County, with increased tourism adding to both the economy and use of County services, and a growing economy adding to the need for employees and affordable workforce housing. This last being of paramount concern to mountain communities, who are experiencing detrimental shortages of affordable workforce housing and long-term rentals, in large part because property owners can make more money through short-term rentals.

Sheena Darling, County Housing Authority Director, emphasized this concern. “It’s really, really important to remember the impact housing is taking. Long-term housing is being substantially impacted by short-term rentals. I don’t want to lose perspective on that.”

Discussion continued around the fact that these short-term rentals are becoming more of a business for both second homeowners and commercial entities than a way for permanent residents to make some extra money. Reference was made to a property owner who participated in last year’s STR workshops and owned eight rental properties in Grand County. Leatherwood mentioned that not only are local realtors marketing second homes as having high income potential but that commercial entities are buying up properties for purely money-making purposes.

This topic struck a chord with Commissioners, especially Kris Manguso, who stated strongly that she was opposed to commercial entities buying these properties. “I am really concerned about our sense of community. This will ruin it. I don’t want to see that happen to my county.” A Republican often opposed to increased regulation, Manguso was the first to propose limiting the number of permitted STRs. Cimino followed up with a possible ration suggestion, requiring permittees to have long-term rentals as well in, perhaps, a 1:1 or 1:2 ratio, demonstrating one long-term rental for every one or two short-term rental permits granted.

Community members also expressed concerns about the current program. Aaron Zieschang of the Winter Park Highlands noted that many short-term rentals were in violation of well permitting rules. “It creates a large change in water usage when a property goes from a part-time second residence to a short-term rental,” he said. He also questioned whether fines were high enough and if data collection was being done on violations and reports to the Grand County Sheriff’s Office. Leatherwood indicated the first as being among program concerns. And Undersheriff Wayne Schafer indicated that detailed data collection was not being done for calls to STRs.

Other concerns ranged from septic system abuse and failure to trespassing to transparency of the program. Tim Ziebarth of Grand Lake voiced the concern of a number of residents who are concerned that there is not a publicly available list of permitted STRs. Septic systems seem to be an issue of the property owner, if a potentially expensive one. And public availability of permittees was explained as an issue of safety and privacy. “It becomes a safety issue if the addresses of empty houses are posted online,” said Manguso. “It is like an invitation to theft,” agreed Commissioner Merrit Linke.

In view of the upcoming annual review required in the original resolution, Leatherwood offered a look at what the Staff recommendation for the program will be. He proposed a change in the fee structure where the flat $150 permit fee would be supplemented with a rental occupancy or “pillow count” fee of $50 per advertised occupant. According to the County’s monitoring company, Bear Cloud, the average advertised occupancy for STRs in unincorporated Grand County is 9.4, with some rentals advertising up to 30 occupants. If calculated on the 850-ish STRs advertising at any one time in Grand County, this would bring expected annual revenues to about $527,000, or $474,000 with an average 90 percent compliance.

With consultants and other localities with STR programs indicating that operational costs are unlikely to drop, this additional revenue would take care of the previously mentioned budget shortfalls. Anticipating concern about the additional costs to homeowners, Leatherwood showed figures that indicated the proposed permitting costs would likely fall in the range of .95 and 1.23 percents of homeowner STR incomes, based on what is seen as an average nightly rental cost of between $270 and $350 a night and an estimated average of 80 annual rental nights.

A formal proposal will be brought before the BOCC at the regular May 22 meeting. The proposal will include a change to the fee structure, changes to the application process (moving it all online), and enforcement activities (no longer providing warnings for noncompliance). The issue of limiting potential STR permits to single entities will not be a part of the proposal, with Staab saying, “I don’t think it can be done in 30 days.” Staff will bring research on how other communities are addressing the problem to the scheduled meeting, however. As with all BOCC meetings, it will be held in the BOCC meeting room in the County Administrative Building and is open to the public.