Council Tables Rental Registration Fees 4-1, Putting Program on Hold

Desert Hot Springs' rental registration program is on ice. On Oct. 6, the City Council voted 4-1 to table the fee schedule needed to launch it. The vote followed hours of testimony from landlords, property managers and tenants. It also came after staff said the proposed fees would recover only about 29% of registration costs, with the remaining subsidy unquantified.

• Rental registration fees tabled 4-1, which pauses the program. Councilmember Jan Pye cast the lone no vote.

• Long line of landlords, managers and tenants urge repeal of the July rental ordinance, citing Fourth Amendment and rent concerns.

• Mayor says 284 records requests from one person cost more than $300,000 in staff and attorney time. The requester blames city transparency gaps.

• Council starts process on $7.5M lease revenue bonds for Animal Control, Public Works and roads.

Rental Fees Stall Over the Subsidy

The basics: The Rental Registration Program ordinance (Chapter 5.58) was adopted July 7. It requires rentals to register and allows for interior inspections. It cannot operate without an adopted fee schedule.

Where things stand: Staff based its proposal on a cost-recovery study. The proposed fees were:

• $100 per property, plus $5 per unit at properties with 10 or more units

• $60 for self-certification

• $150 for appeals

• $10 for a permit modification

Staff estimated the true cost at $344.08 per registration. The fees would bring in about $650,000 over five years from an estimated 6,500 rentals.

“Staff is recommending partial rather than full cost recovery,” said Miller, city staff presenter. Staff said the lower rate was meant to encourage compliance.

The catch: The remaining cost would come from the general fund. Staff estimated that subsidy at roughly three-quarters of program cost but gave no dollar figure. That gap reshaped the debate.

“So if this is a $300,000 hit on the budget, again, we're jumping into an area where we're taking away from road projects, public works projects, and other projects,” said Mayor Scott Matas. He tied the concern to the unbudgeted public records costs discussed later in the meeting.

City Manager Doria Wilms offered the off-ramp. “If council wants to have some further dialogue, we can certainly table this item,” she said.

One councilmember then proposed a two-member review. “So my recommendation is we table this, we do a subcommittee with myself and Councilmember Pitts,” the councilmember said.

The other side: Five speakers testified at the hearing, and all opposed the fees:

• Mr. Pedersen asked the council to continue the fees until ordinance revisions are considered. He cited transparency concerns, a missing audit and the lack of independent adjudication. He also pointed to differences from Indio's fees.

• Tom Wilhelm called the fee schedule premature because the city has no database of owners. He urged a Stockton-style grid enforcement method.

• Walker Beverly said costs will be passed on to renters in a city with an 18% poverty rate and no shelter.

• Mr. Betts, a landlord, said the fees will push up rents at properties where owners keep rents low, including homes for veterans and low-income renters.

• Another commenter asked whether fines of $1,000 to $5,000 would cover the gap.

One speaker alleged an illegal serial meeting among council members. “No one up here ever had a serial meeting,” said Matas.

Decisions and stakeholder impacts: The motion to table passed (For: 4, Against: 1, Councilmember Jan Pye; Absent: 0). The motion directs further study by staff and possibly a subcommittee.

“This would put an entire pause if this motion moves forward on the program until further notice,” said Wilms. Staff said the fees could rise or fall when the item returns, or the program itself could change.

• Landlords and tenants: Registration is on hold for now.

• City finances: The city still has to put a number on the general fund subsidy.

What's next: Staff will continue its review, and a subcommittee is possible. No return date was set.

Landlords, Tenants Organize for Repeal

Why it matters: The fee vote did not happen in a vacuum. Opposition to the ordinance itself filled general public comment, led in part by members of the Property Rights Association of the Desert.

Where things stand: Mayor Matas reminded speakers that the ordinance was already adopted. He said general comments belonged in public comment, not the fee hearing. The arguments against the ordinance fell into four groups:

• Constitutional concerns: Andy Dean, an active member of the property rights group, called the ordinance unlawful. He cited the U.S. Supreme Court's decision in Camara v. Municipal Court and questioned the 6,500-rental count. Maddie Parker called it an unconstitutional overreach on Fourth and Fifth Amendment grounds. A first-time attendee who rents called interior inspections warrantless searches and warned of litigation.

• Process: Emery Lesko said the ordinance was pushed through over a holiday weekend without outreach. He offered community help to redesign it. Ashley, a property manager and member of the property rights group, urged repeal and a restart with owners, managers and tenants. She said the complaint volume the mayor has cited amounts to a tiny share of the city's 6,500 rentals. She added that six stakeholders read the ordinance one way, which staff said was incorrect.

• Affordability: Tom, a property owner of 30 years, said many tenants on county assistance already receive inspections. He warned the ordinance burdens lower-income renters. A renter of 10 years asked why only rentals are targeted. The renter urged the city to focus on the roughly 150 problem properties instead.

• Tenant fear: Kelly Culpa said door-knocking found that tenants, many of them Spanish-speaking, fear the ordinance is related to ICE. Some are considering moving.

The other side: Council members signaled some openness to change.

“All ordinances are working documents and can be revised in the future,” said Matas. He invited residents to meet with staff.

Councilmember Pye acknowledged that the stakeholder meeting came late. “I will agree it should have been done sooner,” said Councilmember Jan Pye. She also said an educational mailer on the ordinance is coming next week.

Decisions and stakeholder impacts: The council took no action on the ordinance itself. Tabling the fees, however, effectively freezes it. The organized turnout gives property owners leverage in any subcommittee rewrite. Tenant fears tied to immigration enforcement add urgency to the city's outreach.

Records Requests Spark Cost-vs.-Transparency Fight

Where things stand: Mayor Matas put the item on the agenda. He said he wanted to be transparent about slower routine services and a contract employee hired to handle the workload.

“284 requests have come from one single person in the community,” said Matas. He said the requests since June have consumed more than $300,000 in staff and attorney time.

“This $300,000 was not budgeted for, and so we're going to have to pull stuff back somewhere else,” said Councilmember Gary Gardner, District 1.

Staff pushback: A staff member qualified that claim. “This is not additional unbudgeted dollars,” the staff member said. Staff explained that the cost is mostly staff time diverted from other work. Only the contract hire is new spending.

The city attorney said her firm has absorbed hundreds of hours under its retainer. “The city has not been billed by our office,” the city attorney said. She added: “It would not be sustainable, not even a little bit.”

The other side: The man who identified himself as the top requester also spoke. “This is a transparency problem, not a staff hours problem,” he said. He made several claims:

• The city's portal lists 16 documents, compared with 7,500 in Cathedral City's portal.

• Missed attachments force him to reopen requests, which adds to the volume.

• Microsoft 365 export tools could speed up responses.

• The city has $800,000 in unapproved construction overages.

He offered his expertise as a chief information officer and cited his DHS transparency website. A resident spoke in support of his offer.

Decisions and stakeholder impacts: The council voted to proceed with the discussion and bring back a future staff report. The motion came from Pye, with a second from Gardner (For: 5, Against: 0, Absent: 0). The electronic vote glitched and was repeated.

What's next: Staff will report back at a future meeting with data on records-request workloads.

$7.5M Bond Plan for Animal Control, Roads Advances

Why it matters: The city's two animal control facilities and its corporation yard are aging. The corp yard is also losing room to Eagle Sports Park.

Where things stand: The item was pulled from the consent calendar for separate discussion. The rest of the consent calendar passed 5-0.

Under the plan, the city would buy a large former cannabis cultivation facility in the industrial area. Animal Control and Public Works would move there after the building is outfitted with kennels and HVAC. The bonds would also include $2.5M for roads.

“The savings in animal control operational costs would be about $300,000 a year,” said Buckheim, city staff presenter. He said new operating costs would partly offset those savings.

The key numbers:

• Debt service: about $540,000 a year.

• Repayment source: staff expects restricted utility users tax revenue to cover the payments within 3 to 4 years.

“This is not an authorization for the bonds,” Buckheim said. No public comment was offered.

Decisions and stakeholder impacts: The council adopted two resolutions. One engages a finance team, and the other allows the city to reimburse itself for related capital costs. Mayor Pro Tem Dirk Voss moved the item and Gardner seconded (For: 5, Against: 0, Absent: 0).

What's next: Bond authorization is expected to return Nov. 17.

Minor Items

• Sculpture approved: Council voted 5-0 for the We Are One weathering-steel sculpture at Reflection Park, capped at $42,600. The sculpture costs $18,000, with about $24,600 in site work, paid from the Art in Public Places Fund.

• Encampment cleanup: The Coachella Valley Conservation Commission reported removing 260,000 pounds of debris and 45 vehicles near Upper Mission Creek. The cleanup cleared nine encampments, and “zero law enforcement action was required,” said Will Steichen, CVCC management analyst. CVCC also landed a nearly $900,000 restoration grant and asked the city's help installing access gates cut from the grant.

• License plate readers: Public commenter Mr. Hedrick alleged the city's Flock cameras went up in 2021 without a public agenda item, as state law SB 34 requires. He also said Houston police searched the network nearly a million times. Staff did not respond.

• Homelessness concerns: Tammy Golick urged a legal RV community and paid cleanup jobs for people living in the desert. Mishari Brown described trash fires near homes, and the mayor said staff would connect her with resources.

• Proclamations: The mayor proclaimed Hunger Action Month and Code Compliance Month. FIND Food Bank reported that 17.1% of the desert region is food insecure.

Looking Ahead

Watch for these upcoming dates and actions:

• Next week: The rental ordinance educational mailer is expected.

• Nov. 17: Bond authorization returns to the council.

• Oct. 17: The city's Water Festival takes place.

• No date set: The rental fee subcommittee review and the records-request report.