Grand County Inks Deal for Short-Term Rental Software
The Grand County Board of County Commissioners (BOCC) recently contracted with Bear Cloud Software, LLC for the provision of short-term rental compliance monitoring and administration services. Bear Cloud Software was one of three companies that submitted service proposals to the county and was recommended by County Manager Lee Staab and Community Development Director Bill Gray.
Bear Cloud offers a customized software package, to be administered by a yet-to-be-identified County employee(s). This is a change from the initial vision of contracting out all but some administrative oversight and customer service to a third-party provider. But after interviewing each applicant and completing an online demonstration of each service, it was determined that the Bear Cloud Software will “provide the County, along with identified staff members, a means to administer the STR program in an effective manner,” according to Gray. “It was pretty impressive, meeting all of our requirements with a significant cost savings.”
The Bear Cloud bid came in at less than half of the other two proposals at $27,850 for the first year and $21,500 for subsequent years. This, compared to $70,780 and $69,000 from Harmari by LTAS and Host Compliance, whose presentation to the Board earlier this year convinced both BOCC and staff of the value of outsourcing the monitoring and enforcement under recently adopted Short-Term Rental (STR) regulations.
The low bid was met with some skepticism, voiced by Commissioner Merrit Linke as possibly “too good to be true.” “Is there something we’re missing?” he asked. “And are we really saving money if we are now paying a staff salary as well?”
Staab admitted his own early apprehension, but said that he found the software, designed by a former county manager and former county mayor, to be both complete and “more personalized than the other options– much better.” He detailed the savings inherent in the proposal by pointing out that training costs were included in the bid and that there had been anticipated personnel cost and time from the beginning. The $150 STR application fee had been determined to help cover costs of both a third-party contractor and a County program administrator.
“This avenue offers the least risk to the County, as we know we can generate the revenue to pay for what is essentially a software licensing cost,” said Staab. “And in the end, the County would own all the data, rather than it being stored on someone else’s servers.”
Dan Korkowski, Deputy County Assessor and former Compliance Enforcement Officer of the Town of Grand Lake, noted that, given his experience, the County would likely bear the cost of a full-time employee for the first year only, as both the new program and software was being learned and implemented. “After that,” he encouraged, “the demands are reduced and it becomes a split salary where time can be shared with other responsibilities, providing extra benefits.”
It was discussed that the STR administrator could be a current employee, perhaps in the Community Development or Assessor’s Offices, as data from and, perhaps, responsibilities for the program may overlap current roles in each department. The needs may instead call for a new hire, a decision left open for now, as greater familiarity with the software is explored.
The Bear Cloud package includes an online registration portal, a complaint portal, and a 24-hour complaint hotline. The bid includes verification of up to 670 addresses advertised as vacation rentals in Grand County. Interestingly, this number was also less than half the Grand County STRs estimated by each of the other two bidders. Additional addresses would be verified at $5 a piece. When asked about the discrepancy, Ed Moyer, Assistant County Manager, responded that the Bear Cloud representative guaranteed “a 50 percent reduction on the software cost if I am off by two-fold.”
Convinced, Linke moved to approve the contract with Bear Cloud. The contract puts in place the last major piece of the new STR program. Under the new regulations, all short-term or vacation rentals in the county must apply for a license, maintain a state sales tax license, and pay all applicable state and local sales and lodging taxes. Regulations delineate such things as noise, trash storage and disposal, and parking. Reported and verified violations will result in fines and potential loss of the license.
For more information on the Short Term Rental program, to license your vacation rental business, or to report a violation, go to co.grand.co.us/849/Short-Term-Rentals/.
Reducing Building Department Backlog
The BOCC also approved a third-party contract with Safebuilt, the lowest of three proposals offering on-call third-party review of building permit plans. Currently, there is a five-week turnaround for new building permit applications in Grand County, an increase from the previous average of two weeks.
The existence of the backlog was of concern to Commissioner Kris Manguso, former Director of Planning and Zoning division of the county building department. “Why is this a struggle to process these applications?” she questioned, pointing out that, while single-family construction applications are up slightly, building permit reviews were down on the whole.
Bill Grey, Community Development Director, reminded the Board that the department has reduced staff and increased responsibilities in the last few years. Also, he pointed out that the influx of applications is very seasonal, peaking during the construction-friendly summer months. “We have a small staff that is working very hard. And we anticipate catching up as the permit applications slow down for the summer.” The department’s goal, he said, including the third-party support, is to reduce turnaround to three weeks.
County Manager Staab added that the plan would be to send the most time-intensive of the permit plan applications out for review. This would allow the majority to be processed in-house. He further recommended the contract, lauding its as-needed nature, which would allow the County to meet surges in the application cycles, without taking on another full-time salary.
Other efforts to increase efficiency, mentioned by Gray and Staab, include the additional training and development of existing staff to complete more reviews and the planned creation of a video, outlining the building permit process, that would make the information accessible to anyone through the County website. “We have a hardworking staff,” praised Gray, “who are doing a good job for this county and the people they serve.”
Road & Bridge Lease-Purchase Plan Could Save $1.4 Million
A workshop was held with the BOCC and the Grand County Road & Bridge Department to examine the advantages of moving to a lease-purchase program for major equipment, including graders and loaders.
The County has purchased all major equipment outright since 2010, part of a local government decision to not carry any debt at the time. Unfortunately, reported Road & Bridge Superintendent Chris Baer, there were unanticipated costs with owning the equipment. As owners of the equipment, the Department has been motivated to keep the machines as long as possible. However, this also means expensive repair costs, sometimes as high as $100,000, and borne solely by the County when the machines passed out of warranty. It also meant machines possibly being out for repair when needed and keeping them beyond their point of value for resale.
Under the proposed plan, Road & Bridge would follow a 7-year cycle, purchasing 21 pieces of equipment total on a rotating basis. Under the lease period, machine repairs would be covered and substitute machines would be provided if a piece of equipment was out of service for an extended period of time.
Baer highlighted the low risk on repair costs, the guaranteed $175,000 buy-back value at the end of each 7-year term, and the ability to retain resale value and sell equipment through the County as major benefits to the lease-purchase option. “In the end,” he said, “it keeps the equipment on the road and serving the people of Grand County.”
The plan is anticipated to have a significant budget impact, especially in the first five years, but with up to $1.4 million in savings over the next 10 years. It will be written into the Department budget will have final approval from the BOCC when they approve the new County budget.