Mayor & City Council

WHITEFISH CITY COUNCIL December 20, 2021 7:10 P.M. 1) CALL TO ORDER Mayor Muhlfeld called the meeting to order. Councilors present were Qunell, Feury, Hennen, Davis, Sweeney, and Norton. City Staff present were, City Clerk Howke, City Manager Smith, City Attorney Jacobs (Remote), Finance Director Dahlman, Planning and Building Director Taylor, Parks and Recreation Director Butts, Interim Police Chief Kelch and Fire Chief Page. Approximately 25 people were in the audience, and eight participated via Webex. 2) PLEDGE OF ALLEGIANCE Mayor Muhlfeld asked Tony Veseth to lead the audience in the Pledge of Allegiance. 3) PROCLAMATION a) Proclamation – Arbor Day Friday April 29. 2022 (p.11) Mayor Muhlfeld read the Arbor Day Proclamation that is provided in the packet on the website. 4) COMMUNICATIONS FROM THE PUBLIC– (This time is set aside for the public to comment on items that are either on the agenda, but not a public hearing or on items not on the agenda. City officials do not respond during these comments but may respond or follow-up later on the agenda or at another time. The mayor has the option of limiting such communications to three minutes depending on the number of citizens who want to comment and the length of the meeting agenda) Ruben Castron, Citizens for a Better Flathead, Kalispell, addressed the Curbside Recycling and submitted written comments that are appended to the packet on the website. He thanked the Council and staff for all the work they are putting into this. He believes the implementation discussion of last meeting will significantly increase the cost as well as the scope of this proposal and therefore the City and staff should rebid this program. He also mentioned since Citizens last comments they have become aware of two lawsuits that appear to be being brought against Republic Services from issues that have arisen with their recycling programs in other parts of the state and other parts of the country. They submitted comments as well as documents and references to these allegations that are appended to the packet. In additional a robust public education is needed for a successful recycling program. He also suggests tightening up language regarding who has to pay for excluded waste that is collected and be clear about what material is actually being recycled. He asks to regard his written comments and encourages the Council and staff to work hard on this. 5) COMMUNICATIONS FROM VOLUNTEER BOARDS None 6) CONSENT AGENDA (The consent agenda is a means of expediting routine matters that require the Council’s action. Debate does not typically occur on consent agenda items. Any member of the Council may remove any item for debate. Such items will typically be debated and acted upon prior to proceeding to the rest of the agenda. Ordinances require 4 votes for passage – Section 1-6-2 (E)(3) WCC) a) Ordinance No. 21-18; An Ordinance amending Ordinance No. 20-17 (Second Reading) (p.13) b) Ordinance No. 21-19; An Ordinance amending Title 4 – Public Health and Safety, Chapter 2- Solid Waste, of the Whitefish City Code (Second Reading) (p.16) Councilor Sweeney made a motion, seconded by Councilor Davis to remove Ordinance No. 21-19 from the Consent Agenda for further discussion.  CITY COUNCIL MINUTES December 20, 2021 Councilor Sweeney made a motion, seconded by Councilor Qunell to table Ordinance No. 21-19 to a date uncertain. The motion carried. Councilor Sweeney is concerned that staff does need to re-bid for recycling given the parameters put out last spring versus what is being entertained now. Manager Smith stated staff will bring the Request For Proposal (RFP) back to the Council to review. Councilor Sweeney made a motion, seconded by Councilor Hennen to approve the Consent Agenda as amended. The motion carried. 7) PUBLIC HEARINGS (Items will be considered for action after public hearings) (Resolution No. 07-33 establishes a 30-minute time limit for applicant’s land use presentations. Ordinances require 4 votes for passage – Section 1-6-2 (E)(3) WCC)) a) Ordinance No. 21-20; An Ordinance amending Title 11, Zoning Regulations, Chapter 3 – Special Provisions, Section 35 – Short Term Rental Standards, and Chapter 9 – Definitions, of the Whitefish City Code (WZTA 21-03) (First Reading) (p.23) CONTINUED FROM 12/6/2021 – PUBLIC HEARING REMAINS OPEN Director Taylor presented his staff report that is provided in the packet. This agenda item is a continuation form the December 6, 2021, Public Hearing. The potential changes to the short-term rental standards were directed by the City Council at a work session after a report provided by the Sustainable Tourism Management Plan Committee. The Committee recommended changing the definition of short- term rentals to 90 days. Staff reviewed and came up with an alternative which would create a second terminology of medium-term rentals, rental from 30 to 90 days, specifically to tourists and remote workers, but not including month-to-month rentals for long term housing for individuals or families or rentals of less than 90 days to local workers. Medium-term rentals do not require registration or a business license unless also being used as a short-term rental. Medium-term rentals need to meet the parking requirements in the zoning regulations and are regulated to the same zoning districts where short- term rentals are allowed which is resort zones; and the WB-3 downtown district. Mayor Muhlfeld opened the Public Hearing. John Sinrud, PureWest Real Estate, President of the Montana Landlord Association. Going through “medium-term” and defining what rentals are, the City is interfering with tenant landlord law, which he has worked on for over ten to twelve years in the state of Montana. The state controls tenant landlord law. No city has the power to do that. Thirty-days or month to month rentals are allowed under the state law. He suggests removing anything with mid-term in the proposed ordinance. The Landlord Association has fought this in Bozeman, Butte and Billings. He suggests the City of Whitefish not touch this. Linda Costain is against this ordinance. She and several other people have purchased houses over the years with the intent to retire and to use them as rentals knowing they were not in the short-term rental districts but knowing they can do thirty-days. You are affecting a lot more of a local income. Missi Schumer, 716 Birch Point Drive, and her father-in-law owns 718 Birch Point Drive. Their home is zoned WR-2 which is not a short-term district. Five Star Rentals manages their property to ensure they abide by all laws. This proposal is not the right solution for what we are trying to do. The proposed changes have been advertised as a way to limit or enforce short-term rentals. However, the proposed ordinance does not change the way properties in short-term districts are allowed to operate. They currently operate nightly, weekly, monthly, or however they want as long as they are licensed. The intended consequences of this ordinance have not been fully disclosed to the affected property owners in public notices or in the language of the ordinance itself. In order to realize the intent, they had to read between the lines. Many of the homes located in WR-2 and WR are fully furnished homes that are typically occupied by the homeowners, tourist, remote workers, seasonal workers, or temporary workers. Prohibiting homes in these areas from offering medium term leases will leave many of those homes 2  CITY COUNCIL MINUTES December 20, 2021 empty for large portions of the year, reducing revenue for the City and local businesses. This does not address the affordable housing issue. The Sustainable Tourism Management Plan has several high priority action items, none of which are addressed by the proposal, other than the enforcement issues. She respectfully requests the Council not adopt this ordinance. To really address the problems, we are trying to solve we need a diverse group of people, including property managers, year-round and seasonal residents, and business owners to find a sustainable long-term solution. Ruben Castron, Citizens for a Better Flathead. Citizens for a Better Flathead has a large membership base, several of which reside in the city limits of Whitefish. He is here representing them in strong support of this proposal. A lot of the comments were negative but responding to several of them it is important to recognize that passing this ordinance doesn’t limit these rentals in all areas. It still allows them in WB-3, Resort Residential, and simply limits them in our residential areas. From experience he knows what being a digital nomad, remote workers are like and these thirty-day rentals area very appealing, however having a neighborhood turn over every thirty days is not a way to build community or culture. He doesn’t expect this proposal to solve all of the issues, there is still the issue of enforcement. This is a great step forward. He also encourages the Council to trust city staff and the legal advice they have given. Erica Wirtala, on behalf of the Northwest Montana Association of Realtors, also provided written comment that is appended to the packet. They are opposed to the proposed ordinance on the mid-term rental portion only. Mid-term rentals serve a unique portion of the city’s population. These are not the tourists that are coming in for a couple of days. These are needed rentals for people at the hospital, or renters in between houses. This is not your typical tourist that would capitalize on this type of a rental. They also feel that rules that are created should be enforceable. With housing at such a priority and such a crisis level, every opportunity should be made to incentivize rentals at all levels instead of having vacant homes or illegal mid-term rentals. Suzy Schweikert, 704 Baker Avenue, Five Star Rentals, read her written comments to the Council that is appended to the packet on the website. She is against the proposed mid-term portion of the ordinance. Joel Maxwell, 25 West Second Street, a property manager since 2000. In 2016 she started managing nightly rentals. Thirty-to-ninety-day rentals are and have always been a necessity in this town. By restricting them to the nightly zones, you will eliminate affordable 30-to-90-day rentals. There are homes in the residential zones that have been renting on a monthly basis for years in Whitefish. Long before Airbnb and Vrbo. The owners of these properties stay off and on throughout the year. Some of the owners depend upon the income for retirement, mortgage, and property taxes. In turn you have tenant that are only looking to rent one to three months to recreate, work and visit family. They cannot afford a nightly rate for one to three months. The majority of monthly rentals in the residential zones will not become affordable long-term housing with zoning revisions. These units are owner occupied off an on throughout the year. She asks the Council to please vote no. David Schumer, 716 Birch Point Drive, is opposed to this amended change to the ordinance. If you can rent nightly at a high rate, you are not going to rent monthly or for three months at a lower rate. People buy those properties at a higher value, and they are going to try to maximize their return. The thirty-day rental is not a thirty-day max, They have had tenants for three months, or for one month. It varies based on the need. He provided an alternative, properties outside of the 30-day rental who have been operating at mid-term rental, can operate under a Conditional Use Permit. People already operating can be administrative Conditional Use Permit and then anybody that buys a house is restricted to the 90-day minimum unless they apply for a Conditional Use Permit. 3  CITY COUNCIL MINUTES December 20, 2021 Lauren Oscilowski, 632 O’Brien Avenue, stated there have been two work sessions around this change. Council directed staff to draft these changes and to legally vet the ordinance. The changes unanimously passed the Planning Board. She addressed the question “Why 90-days”? The problem we have in Whitefish is two-fold. We have over visitation, and we have a limited pool of workforce housing. The intention behind this is to not necessarily bring homes back into workforce housing but to stop the hemorrhaging that is happening. Our town is losing homes left and right, property values are going up, more and more homes are coming out of long-term rentals and going into short-term rental pool. This isn’t about correcting; it is also about stopping what is happening. The Montana Constitution really prohibits us from doing a lot of things. We are also in a unique situation where we have the foresight to zone areas that will allow for short-term rentals. We already have neighborhoods that are allowed to have nightly rentals and are allowed to have 30-day rentals. We are asking the Council to protect the integrity of our neighborhoods for neighbors. That way we can have homes for our workforce. Tony Veseth, 1014 8th Street East, stated it is good to hear from the property management companies who represent people who own properties and are trying to get them out to people to share what we have here. There is a whole other group of people we need to address, and that is the people moving to Whitefish that don’t necessarily need to become a part of the community, and don’t look at what is best for Whitefish, What we are trying to do is preserve our community. He is seeing a lot of dark houses in his neighborhood. He knows how much work Council has done with the inclusionary zoning. The last thing he wants to see is put a lot of effort into this, a lot of money and a lot of studies, to then have somebody at the state level shut us down again. He hopes whatever decision Council makes is legal and that we aren’t going to get shut down at the state level. Nathan Dugan, 937 Kalispell Avenue, fully supports the ordinance. The conversation around the medium-term rental aspect of this whole thing is no related to what is actually written in the ordinance. The FWP employee that lived with him for less than three months will still be able to rent less than 90- days, he as a tribal physical therapist, and as a contracted employee would still be allowed to do that. That is not targeted by this ordinance. People who have spoken against the ordinance don’t understand that aspect of it. He supports the ordinance and thinks it is a good way to go. Chris Coughlin, Haugen Heights, supports the ordinance. She thinks that short-term rentals have been destroying neighborhoods across the country and we certainly have our issues here. She stated residential neighborhoods should be for residents. Mariah Joos, 716 Spruce Court, as a business owner, a member of the Sustainable Tourism Management Plan Steering Committee, and the current Board Chair for Explore Whitefish, she has her fingers in a lot of this stuff. We all realize that Whitefish has long had a dedicated contingency of second homeowners. Visitors who became part time residents when they were here and have treated our community with the respect and care as full-time residents do as well. The issue we are now contending with is speculative real estate. They are kind of being lumped in as bad actors in a way that is unfair. The only way that you can combat any sort of these capitalistic forces is through legislation. Often times that is after the fact and it is never a perfect solution to the problem that lays at hand. We have a lot of good actors within our community, and they may be negatively impacted. That is beyond unfortunate. The question we have to ask ourselves, do we preserve their interest to the potential detriment of our entire community. The ordinance is by no means a complete solution. It is not just Affordable Housing, it is not just a runaway train of real estate market, it is not just workforce housing, it is not just over tourism. It is a lot of different things that are coming together. She thinks this is one necessary piece and it is a starting place if nothing else that will allow us to work and grapple with this issue. She appreciates the Council’s consideration of this issue and the amount of time that has been put into this. 4  CITY COUNCIL MINUTES December 20, 2021 Mary Curtis, via Webex, is a property owner that will be affected by this ordinance and are clients of Five Star Rentals. She does not rent long-term, nor does she rent low income. Regardless of what happens with this ordinance, she will not rent long-term, and she will not rent low-income. She spends a portion of their year in Whitefish and considers herself to be residents of Whitefish. She donates to the charities in the community and contributes to the economy. Her property turns over about three times a year. Sometimes it is for a month, sometimes it is four months. She agreed the one-month person is a tourist. The people who stay longer work on the mountain, are nurses at the hospital, a lot of different kinds of individuals need shorter term rentals. She is not a speculative investors. If this passes, she will be one of those dark houses. She encourages the Council to consider the purpose for this ordinance. She thinks this may be an easy target but probably not the most effective target. Lisa Jones, 314 Blanchard Hollow, she and her husband own three properties in the city limits and are long-term rentals. Converging factors are where we are today, and we are not alone. Many mountain communities are facing similar challenges and have many creative solutions. This is not the solution for affordability. That issue is being addressed by other options the City is working on. She understands there are many pieces to the puzzle of housing and the supports all of the efforts that are going on and encourage the Council to make this step to keep Whitefish neighborhoods local, 90-days is a good fit for those that want a hybrid of renting their house. The market will determine the rate and people are willing to pay and everybody knows that you can name your price right now. We are here to try to maintain the integrity of the neighborhoods of Whitefish. She supports this ordinance fully realizing that it will change her ability to rent her places for thirty-days in the future. Knowing that it is more important to keep the integrity of the neighborhood than to try to make the latest quick buck. Rhonda Fitzgerald, 412 Lupfer Avenue, agreed, we have a convergence of issues. One is visitation or over visitation, one is the high cost of all housing, and one is the availability for affordable housing. This definition change is the collision of all those things. People have been buying the houses at escalated prices because they can short term rent them for 30-days and generate revenue to help pay for the higher mortgage cost. They are brining in more visitors than we can normally house in our community. The 30- day rule is a loophole and needs to be addressed. She thinks this is a very good way to do it and she hopes Council will go forward with it. This ordinance is strictly to keep our neighborhood homes in the market for people who live and work here. Kelly Wizorek, 27 Mill Avenue, has been here for seven years and works remotely for a software company. This ordinance and the short-term policy is affecting people that are truly looking for long- term rentals. Her owners decided to sell in May, and she has moved three times over the course of the summer because she couldn’t find anything consistent. What these rentals are doing is taking away from real long-term properties that people also need as well. Why we are using affordable housing in conjunction with this ordinance. Her findings are these short-term rentals are not affordable. Gregory Freeman, via Webex, 6204 Monterra Avenue, supports the ordinance. He has had problems finding a place where his family would be able to live as a year-round resident. Ariel Freeman, via Webex, 6204 Monterra Avenue, is a nurse stated the company she works for is currently short staffed and are not able to hire anybody because of the cost of living here. We need the service industry, the teachers, healthcare workers, people who can live here year-round in addition to the tourists. Tom Patton, via Webex, 214 W. 6th Street, request the Council either table the decision on medium-term rentals or remove them entirely from the proposed ordinance. Everyone who is speaking on this issue is united through their love of Whitefish and the community. He empathizes with the critical need for 5  CITY COUNCIL MINUTES December 20, 2021 workforce housing. Everyone has their own ideas on how best to manage the growth in Whitefish, but the one thing that is absolutely necessary is everyone’s collaboration on this issue. Medium term rentals are not short-term rentals and should not be lumped into the same category. Medium term rentals are primarily families or couples that are working remotely, vacationing, displaced due to fire, floods or between housing. They assimilate very well into the neighborhoods and can contribute to the community. Kevin Kulow, 710 Birch Point Drive, he and his family has been coming out to the area for a number of years. They purchased a home and have been renting it out as a medium-term rental to a wide range of people. In no way would you consider it affordable housing or short-term rental. You have a problem that this ordinance is not targeting. The problem is an enforcement problem with short-term rentals. This is not going to fix that problem. Punishing the medium-term rentals isn’t going to get you there. Dark houses are a problem. The housing problem is real, there is no question about it. Regular people need a place to live. He hears the concerns of workers in town, but this is not the solution for it. Brian Schott, via Webex, 708 Lupfer Avenue, thinks this choice for 90-days will stop some of the bleeding and return some homes into longer term rentals and ownership. It is a really tough choice, and it will have a negative impact on some, but weighing these choices right now we have to give tremendous weight to community character and livability. Whitefish is being treated as an extractable resource. This would be a clear vote while acknowledging that this change is imperfect, it is a vote for keeping our community intact. Kelly Talsma, via Webex, 361 Shady River Lane, is a retired teacher and also a realtor. She has had many conversations with teachers that a way that they could afford housing in Whitefish is to rent out during the summer and over the Christmas break, so they can afford housing and supplement their income by those rentals that may not be sixty to ninety days. The shorter 30-days that doesn’t ruin the neighborhood and that keeps our teachers in our neighborhoods. There being no further public comment, Mayor Muhlfeld closed the Public Hearing and turned the matters over to the Council for their consideration. Councilor Qunell made a motion, seconded by Councilor Feury to approve Ordinance No. 21-20; An Ordinance amending Title 11, Zoning Regulations, Chapter 3 – Special Provisions, Section 35 – Short Term Rental Standards, and Chapter 9 – Definitions, of the Whitefish City Code. Councilor Qunell made a motion, seconded by Councilor Sweeney amend the Ordinance to remove all language that references midterm rentals at this point. Councilor Qunell understands the problem. There is a lot of emotion here. We do suffer from over visitation; our neighborhoods should be for neighbors. He doesn’t understand how we are going to get away with this in the states eyes. This ordinance targets certain classes of people. The intention here is good. We have the right ideas here. We don’t want to allow any more over visitation in our town. We need to find a way to make this work more effectively and more appropriately which would be through an idea we heard about conditional uses. We have to change some of the language in our residential zoning to prevent this rather than doing it as a blanket statement. We have the right idea; we just have to go about it in a different way. Councilor Davis stated he has carefully reflected about this issue for the last week and he admits he has back and forth on it a couple of times. He is going to vote against the amendment. He believes the reasons why we brought this forward in the first place are the right reasons. Thirty-day rentals with the advent of Airbnb and VRBO, has changed the landscape of our community. On one side we have arguments saying these are hotels and these are a bunch of tourists and on the other side it’s the traveling nurses and stuff and really the answer is probably somewhere in between. The real thing at the end of the day 6  CITY COUNCIL MINUTES December 20, 2021 is we can’t all rent out properties for 30-days at a time, otherwise where will we be? After some thought he thinks this should be passed tonight as written. Councilor Norton stated she will not be voting for the amendment either. She understands where the property management companies are coming from and why we should walk this back a little bit. She would be more in favor of tabling to another time in January to discuss changes to what has been presented, but not to eliminate completely. Councilor Feury stated he is not going to be able to support the amendment. He also has gone around and around about this many times. Like most regulations, whether it is county, state or federal, it is often drafted to deal with the bad actors. He agrees with Councilor Norton, we have a problem now and this is a way to deal with that. The motion to amend the Ordinance failed on a 4 to 2 vote, Councilors Norton, Davis, Feury and Hennen voting in the opposition. Councilor Norton likes the idea of a conditional use process, and also the issue about people who have already booked into 2022. There is a financial implication to people that are managing their businesses like this. After some discussion Council agreed to have the effective date of the mid-term portion of the ordinance be a year out to accommodate the bookings in 2022. The original motion to approve Ordinance 21-20 carried. Mayor Muhlfeld called for a recess at 9:05 p.m. and reconvened at 9:14 p.m. Councilor Qunell was excused from the meeting at 9:14 p.m. b) Resolution No. 21-53; A Resolution adopting the Long-Range Fire Department Master Plan (p.70) Fire Chief Page presented his staff report that is provided in the packet on the website. Mayor Muhlfeld opened the Public Hearing. There being no public comment, Mayor Muhlfeld closed the Public Hearing and turned the matters over to the Council for their consideration. Councilor Hennen made a motion, seconded by Councilor Feury to approve Resolution No. 21-53; A Resolution adopting the Long-Range Fire Department Master Plan. The motion carried. 8) COMMUNICATIONS FROM FIRE CHIEF a) Resolution No. 21-54; A Resolution establishing the Fire Department Strategic Planning Committee (p.260) Fire Chief Page presented his staff report that is provided in the packet on the website. Councilor Sweeney made a motion, seconded by Councilor Hennen to approve Resolution No. 21- 54; A Resolution establishing the Fire Department Strategic Planning Committee, and to appoint Mayor Muhlfeld to serve on the Committee. The motion carried. 9) COMMUNICATIONS FROM CITY MANAGER a) Written report enclosed with the packet. Questions from Mayor and Council? (p.264) 7  CITY COUNCIL MINUTES December 20, 2021 None b) Other items arising between December 1st through December 20 th Council directed staff to advertise for potential applicants to serve on the Flathead City-County Health Board and to schedule interviews for the January 3, 2022, Special Session and for the term to be a three- year term. Staff will continue to work with Republic Services on animal resistant containers when it comes to garbage. Given the need to go out for bids for recycling, staff will bring forward a Memorandum of Understanding for the Central Recycling Site. 10) COMMUNICATIONS FROM MAYOR AND CITY COUNCILORS a) Letter from Evergreen Disposal regarding Recycling Services Request For Proposals (p.268) b) Letter from Hurraw! Requesting City Council waive variance fee (p.269) c) Letter from Skeeter Johnston regarding workforce housing plans (p.271) d) Letters from citizens regarding the appointment of the Whitefish representative on the City- County Health Board (p.272) Councilor Comment Councilor Norton thanked the staff for working through the pandemic and updated the Council and viewers on the Omicron variant of COVID and asked everybody to remain cautious. Councilor Hennen for his service on the Council. Councilor Hennen stated there is no better way to learn about the City inside and out than digging in. He thanked the staff and mentioned Attorney Jacob’s is the standard that he looks to as how he wants to be an attorney. He has learned a lot in the last four years on everything. There is a really good group that sits on the dais and a really good group of staff, and they really care, and they are really diligent. He thanked everybody for the last four years. Councilor Feury thanked Councilor Hennen, fellow Councilors and staff. 11) ADJOURNMENT Mayor Muhlfeld adjourned the meeting at 9:25 p.m. /s/John Muhlfeld _______________________________ Mayor Muhlfeld Attest: /s/Michelle Howke ______________________________ Michelle Howke, Whitefish City Clerk 8