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Prescott may end business licenses for rental units

A change in the city’s business-license program, an economic development consultant contract, and a mid-year budget report will all be up for discussion by the Prescott City Council this week.

The council will conduct three meetings on Tuesday, Feb. 28: An 11 a.m. closed-door executive session; a 1 p.m. study session; and a 3 p.m. voting session. The meetings will take at Prescott City Hall, 201 S. Cortez St.

Among the issues to be decided at the 3 p.m. voting session is the possible elimination of a business-license requirement for long-term residential rentals.

When the City of Prescott implemented its new business license program on Jan. 1, one of the requirements was for all owners of rental homes and apartments to apply for a license.

In the weeks after that, city officials reported receiving many calls from rental owners, complaining and asking questions about the requirement.

Earlier this month, the council discussed its new business license, as well as its registration requirement for sober-living homes and short-term vacation rentals, in executive session.

This week, the council will consider the issue in public session, along a draft ordinance for doing away with the long-term rental license requirement.

City Manager Michael Lamar said Friday, Feb. 24, that the rental-license requirement was a part of the city’s recent effort to get a better handle on the number of group recovery homes in the community.

But, with the subsequent approval of a separate license for sober-living homes and vacation rentals, Lamar said the long-term rental requirement may not be necessary. “We don’t need both of those,” he said.

A city memo pointed that 488 applications for residential rental licenses have already been received by the city – out of a total 3,482 long-term rental properties.

“If council adopts the proposed exclusion, we will notify taxpayers of the change and refund the ($35) fees paid by the applicants,” the memo added.

The removal of the business-license requirement would not affect the requirement for long-term residential rentals to pay sales tax, the memo stated, noting that owners are “still required to be registered with the Arizona Department of Revenue and pay local sales tax.”

In other action, the council will:

• Consider a $44,100 six-month contract with The ROBB Group for economic development consultant services.

Lamar explained that the contract would take on part of the duties of the previous economic development initiatives director position, which became vacant at the end of 2016 with the departure of Jeff Burt.

Lamar earlier announced that he would not be filling the job, but would rather look to consultant contracts, which he said would cost the city less money and would be more effective.

He expects the ROBB firm to make better use of “the natural advantages we have here.” For example, Lamar said the city could work more with Embry-Riddle Aeronautical University and Prescott College to encourage graduates to stay in Prescott and develop entrepreneurial projects.

• During the 1 p.m. study session: Hear a mid-year budget report on the state of the city’s finances in the current fiscal year, 2017, as well as the prospects for fiscal year 2018.

Lamar said the city likely would develop two budget plans – one that would assume that a proposed 0.75-percent public-safety-pension-related sales tax passes on Aug. 29, and another that includes “contingencies” for if the tax fails.

Because of recent cutbacks in director-level positions, Lamar said he does not expect that staff-position cuts will be necessary if the sales tax does not pass, although he noted that is too early in the budgeting process to know the exact impacts.

• During the 11 a.m. executive session: Consider the purchase of property in north Prescott, and hear an update on acquisition of a downtown parcel. City officials have declined to comment on the details of the two possible acquisitions.

Follow Cindy Barks on Twitter @Cindy_Barks. Reach her at 928-445-3333, ext. 2034.

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