In its last work session of the year, City Council received the results of an audit of vacation rentals—and the results were better than anticipated.
The audit had been sparked by a perception that rentals of private homes through sites like AirBnB were not largely ducking out on the transient room tax code, explained City Manager Eric King.
To find out exactly how many local homeowners were avoiding paying these taxes, last summer, an independent firm from California was hired to conduct the audit for more than $10,000. The results were announced in late December: The California company discovered 84 vacation rentals had not registered with the city, and as such, were not paying the transient room tax. In turn, the city then sent out surveys to those rentals to determine if they were, in fact, non-compliant. During that process, 27 came forward to register with the city (bringing the total number of vacation rentals registered per TRT code to 321). Others indicated that they were registered through a property management company, and 23 could not be reached.
The conclusion, according to Bend's chief financial officer Sonia Andrews, was that with approximately 50 rentals not contributing to the TRT for one reason or another, the city is missing out on about $36,000 in revenue.
While the audit showed that noncompliance with TRT was less of an issue that anticipated, it also revealed a gap in business licenses and planning permits. City staff said they will work to ensure that owners of vacation rentals complete all the necessary steps (financial, business, and planning) by providing better communication among departments and sharing information through property management companies, and added that they may make the audit an annual occurrence. Many of those who came forward to register, staff said, claimed to not know they were out of compliance.
Councilor Doug Knight suggested that the city take a closer look at the requirements for vacation rentals and consider more stringent criteria to address livability concerns, such as noise violations and parking issues.
In other council news, Councilor Sally Russell proposed that the council work to draft a resolution supporting the spirit of the Move to Amend movement. Local representatives of the activist group have repeatedly requested that the council refer a measure to the ballot so Bendites can vote on the rights of corporations. The council was split on the issue at the last meeting (with Russell absent).
The council also voted unanimously in support of the two resolutions on the agenda—one introducing the first reading of the Sewer Extra Strength Charge Ordinance and one making adjustments to fees and charges for services and products provided by the city.
The Extra Strength Sewer Program—which creates a rate structure to address the greater contributions of commercial customers to the sewer system—is currently suspended, but city staff said they plan to have categories and rates drafted for city approval by February and July.
Finally, the council meeting also kicked off the annual review process for the city manager. The council's ratings and final review are due to be completed in January.