John Scarffe, Nederland.  The Nederland Board of Trustees formed a committee to study revisions to Nederland Municipal Codes, including language about Accessory Dwelling Units and short-term rentals during a regular meeting on Tuesday, December 4, 2018, at 7 p.m., in the Nederland Community Center. With Mayor Pro-Tem Julie Gustafson taking over the gavel for Mayor Kristopher Larsen, the board also approved the 2019 budget, mill levy and schedule of fees.

Trustee Dallas Masters presented ideas about revisions to Nederland Municipal Codes that would clean up language and incorporate codes regarding short-term rentals (STRs) and Accessory Dwelling Units (ADUs). He said the board has been talking about codes changes for STRs and ADUs for a year now.

The board adopted an ADU ordinance and then imposed a moratorium, Masters said. He volunteered to work with Town Planner Cynthia Baake on reviewing the codes to see how STR and ADU language could be incorporated into existing codes.

At the September 18, 2018 meeting, Bakke showed a Power Point presentation about current codes. It can be located on the town’s civic website under the agenda for the September 18 meeting. It also includes a document with suggested edits to current codes, which was not presented at the meeting. The code hasn’t been changed since 1999.

The Board of Trustees met with the Planning Commission in a joint work session on August 22, 2018, to discuss STRs and ADUs. Based on the conversation, staff was given direction to research the current language in the codes and provide a report of findings to the trustees. Staff was also directed to research enforcement processes and costs and to provide an example of a lodging tax ordinance.

On December 4, Masters said the Town Code has places in it that address STRs and ADUs, but it wasn’t very clear. He suggested maintaining the existing rights in the code and adding new rights like ADUs, changing the existing code rather than adding new sections.

Many codes regulate living spaces in different places, but they need to clarify the definitions. Masters suggested defining two types of rental living space in town code: dwelling units and rooming units.

A rooming unit is more like a sleeping room. Dwelling units have a kitchen and bathroom. Remove all the other superfluous language, like the term “boarding house,” Masters said. Long-term rentals are allowed in both dwelling and rooming units.

“We are not in favor of whole houses being rented out for short-term rentals but are okay with renting out rooms if they live in the house,” Masters said. Over many hours of reading town code, he tried to remove things that are confusing and narrow down the definitions.

STRs are uses of buildings. ADUs are a type of building. “We are okay with people who want to rent out rooms in their houses, people who have extra rooms in their business and commercials,” Masters said.

He would remove all the ADU language about usage and move that into the rental section and define “ADU.” Right now, you can build a guest house on your property. A guest house is an ADU without a bathroom and kitchen, and you’re not allowed to rent it out, but it can be used for 30 days.

Masters asked, “Do we want to have a lodging tax for hotels, motels and STRs?” STRs are going to create work for staff.

Masters also would remove size restrictions, because they keep struggling with that. All buildings have to follow building code. An ADU has to be inspected and follow code. For utility codes, the ordinance put into ADU language that you have to have a separate tap, and Masters doesn’t like that.
The code had confusingly said an ADU could be inside someone’s finished basement. They are accessory buildings. That clarifies things quite a bit. “If my neighbor has a full finished basement with a kitchen and bathroom, it is a separate dwelling unit.”

Masters suggested forming a committee with him, the town attorney and a Planning Commission member in order to arrive at a final resting place within the next meeting or two. Gustafson said she needs more time to go through the recommendations piece by piece and would be looking at stipulations that incentivize long-term rentals, not make them impossible. A disproportionate number of short-term rentals can show up in one neighborhood.

Seven members of the public addressed the board on the matter. Kathleen Chippi said the code is a nightmare. This whole thing started to encourage long-term rentals. You can’t force this on the town, or the town could lose a lot of money. Anyone who has a current STR should be grandfathered in and then be more progressive and open.

Other comments included requesting the board not overregulate. Homes are very expensive, and people are using STRs to make a rental payment. It seems like an unnecessary burden. If you’re adding more restrictive code, where is enforcement going to come from? STR is a very convenient way for a town that attracts tourists.

What drove the decision to say you must occupy the primary residence, and what evidence is there for that? Some people feel that it doesn’t seem logical. An ADU occupied by the owner, does that qualify for being onsite? A business license and lodging tax seems excessive to rent one room in a home.

Planning Commission Chair Roger Cornell said it’s a great outline to work with going forward. The board needs to get a group of people to look at the different chapters, and he will have time to work on Chapter 16, the definitions.

Gustafson said the committee could work on this, and the Trustees could discuss it sometime in January. Masters suggested the first meeting in February. Committee members will be Masters, Trustee Kristen Conrad with Gustafson as a backup, Town Administrator Karen Gerrity, the town attorney, Cynthia Baake, Cornell and Steve Karowe with the Nederland Downtown Development Authority.

After public hearings at two previous meetings, the board adopted the 2019 budget, mill levy and fee schedule. The board conducted the first public hearing on November 5, 2018 and the second on November 20. Town Treasurer Jennifer Hagey said no changes have been made since then.

The sewer revenue base fee will increase by $13,000, an increase of $2.50, or roughly 6 percent, Hagey said. Health care plans for employees were finalized with a 7 percent increase in premiums, so the budget increased by $8,000 among all the different funds. Total General Fund revenue increased $75,000 excluding grants revenue, Hagey said.

General Fund expenditures increased due to insurance and salaries. Capital projects increased by $25,000 for the plow and the match for the GOCO grant coming from the parking contract, resulting in a negative $132,000 change in net assets.

Excluding revenue set aside from the 2017 and 2018 parking contract for a park improvement grant match, the net change is negative $100,000. The town projects a $214,000 fund balance, which is well over the amount needed for Tax Payer’s Bill of Rights (TABOR) requirements.

Changes in the fee schedule include an increase in new business licenses up to $100. Record retrieval will increase by an hourly rate to $25 an hour, or retrieval by legal or management will increase to $50 an hour. Liquor license renewal will cost a flat fee of $575.

The biggest changes were in facilities and rentals. Staff made different rates for different sized groups and the amount of time the facilities are to be rented, so the rental fees have increased in some cases, Hagey said. Water fees will increase by 3 percent, and the sewer fees will increase by 6 percent.

Masters asked about a $15,000 expense for a micro hydro device in Public Works. He hasn’t seen a report on the feasibility study. Public Works Employee Nicole Brastos said Public Works is still working on it and would be in favor of installing the micro hydro device.

Masters said: “I’m concerned about $15,000 for that. It’s not chump change.” It wasn’t going to generate that much power.

Town Administrator Karen Gerrity said that $8,000 was spent this year through a grant for the study, and staff is looking at purchasing the device next June. After more discussion and suggestions to include funds for a greenhouse and tennis courts, Masters made a motion to leave it up to public works to decide on other things the $15,000 could be spent on in the water fund.

The board approved the motion and also approved the mill levy and the fee schedule.

(Originally published in the December 13, 2018, print edition of The Mountain-Ear.)