City of SLT wins lawsuit filed by Vacation Home Rental group

A lawsuit against the City of South Lake Tahoe over the fees charged to those who rent out their homes as vacation rentals was won by the City in court this week. The June 23 verdict was received by all parties on June 28.

Judge Steven Bailey of the El Dorado County Superior Court issued an 11-page decision supporting the City's rights to charge fees to recover their costs in administering the VHR ordinance, including staff time for accounting, planning, building department, administration, code enforcement and other costs.

Jimmie and Melinda Morris, owners of Lake Tahoe Accommodations, and the South Lake Tahoe Vacation Rental Alliance sued the City in 2015 after the City Council adopted a new fee structure for vacation rental homes. Morris has been the more vocal opponent of the Vacation Home Rental (VHR) ordinance, but he was joined in the lawsuit by alliance members Tahoe Keys Resort, Lake Tahoe Lodging, Lake Tahoe Getaways, Vacasa Rentals, Tahoe Rental Connection, RnR Vacation Rentals and Turnkey Vacation Rentals.

"The City is delighted that the City Council has been vindicated by Judge Bailey," said City Attorney Tom Watson. "The court was clear that the City Council did not act in an arbitrary or capricious manner when it enacted the VHR fees. We hope that the Petitioners will accept this loss and dismiss any further action on this case."

Bailey said the City was operating within their rights to charge fees for services rendered. He said, contrary to what Morris was accusing, the adoption of VHR fees does not affect a fundamental vested right. "A permit to operate a vacation home rental concerns a 'purely economic' privilege," wrote Bailey.

Represented by attorney Birgit Barnes of Loomis Calif., there were three points alleged in the lawsuit.

1) Standing: The City argued that the members of the association had not been aggrieved or damaged by paying VHR fees.
2) The City did not violate the Public Meeting Act, and the record supports a conclusion the VHR fees do not exceed the reasonable costs to the City. The City held public meetings, as required, prior to the vote where the public could comment. The fees isn't a tax, and doesn't have to go onto a ballot as required of other taxes. Bailey said the City conducted many workshops and public meetings on the matter, and settled on a fee based on occupants instead of a flat fee, but only after several public meetings. "There is nothing in the administrative record to suggest the City Council acted arbitrarily, capriciously, or that the record is devoid of evidentiary support for the City Council's adoption of the VHR ordinance and resolution," Bailey wrote.
3) There is no violation of the Constitution: Those suing the City argued the California Constitution was violated. Bailey disagreed, saying the fee is not a special tax, and therefore is not required to go before the voters.

Barnes said she hasn't spoken to her client yet as she just received the judgement in the mail on Tuesday (the same day the City received theirs). They have 60 days to appeal but she isn't sure if he wants to go that route, or proceed to trial on a federal statute that has to do with the opportunity for citizens to get repaid damages if they think the City has taken advantage of them. She said the writ in land use issues means a group of people cannot be treated in a matter that is different than other groups. They contend that only 27 percent of the nuisance calls into the South Lake Tahoe Police Department were VHR related,yet those owners are the only ones paying for the cost, and the other 73 percent of the public aren't having to pay a fee.

A call into Jim Morris' office was not returned.