New plan instituted after 50 percent cut in charges

(Nov. 22, 2019) Worcester County’s new rental license program cleared muster at the county commissioners meeting Tuesday, but only after the proposed license fees were cut in half.

The commissioners passed the license implementation plan but cut the initial $400 fee proposed for the short-term rental license to $200, and the long-term license cost was reduced from $100 a year to $50. The mobile home park rental license, recommended at $400 per lot, site or unit, is now $200.

The commissioners’ action followed an influx of complaints and concerns about the initial proposals, as Commissioner Bud Church alone reported having received well over 200 email complaints about the high costs.

“It may adversely affect the people that comply,” Commissioner Joseph Mitrecic said, adding that the county might see more compliance with a $200 license than it would if licenses cost twice that.

Ed Tudor, director of review and permitting for Worcester County, added that he set that high number to ensure that the program would pay for itself. He also cited areas in the south and west whose rental license fees were up to $1,000. Talbot County’s fee is $440, according to Tudor. 

“But $400 compared to what’s going on locally, especially when this doesn’t impact the incorporated towns, to me smacks of being unfair,” Commissioner Chip Bertino said. 

He also pointed out that since the new software for the rental license program will also be used to collect the hotel room tax, which will be a major source of revenue, then the rental license fee should be insignificant. 

In Ocean City, which has its own rental license program, the fee is $116, with an added $25 for a noise control permit.

Wicomico County does not have a rental license program, but the city of Salisbury does. Its license fee is $120. According to their county government websites, Montgomery County charges $114 per unit for a single-family rental license. Prince George’s County charges short-term rental licenses at $150 and single-family unit rental licenses at $115 for two years.

County Commissioner Joshua Nordstrom, who represents the Pocomoke district, was uneasy about the proposed $100 long-term rental fee hurting tenants.

“You’ve got a lot of folks who live in this county, outside municipalities, a lot of them who are in my district, who rent because they can’t afford to buy,” Nordstrom said. “If you are just barely making your bills now, which there are a whole lot of people in my district and throughout the county who are in that position, $100 is more than too much to ask to burden them.”

Bunting cited a similar concern about the proposed $400 fee for mobile homes, highlighting that those mobile parks are the only affordable housing for some residents, and therefore could be an even bigger hurt than the proposed $100 long-term rental fee. County Treasurer Phil Thompson countered that because of the current mobile home excise tax, those who rent mobile homes are already paying nearly that much. 

In his report, Tudor said the $400 per lot, site or unit was proposed to make up for the loss of the mobile home excise tax. The excise tax currently requires rented mobile or manufactured homes to have a license. The excise tax was abolished during the commissioner’s Aug. 20 meeting to mirror the upcoming rental license program. 

Tudor also advised the commissioners to hire two new employees – one to process license applications and renewals and the other to focus on education, enforcement and complaints.

Mitrecic moved to hire one employee for now and reevaluate during the county budget meetings in six months, noting that the county would be in a difficult decision if it ended up only needing one employee. 

“I’m a full-steam-ahead kind of guy,” Mitrecic said, “but I think we need to take a step back and crawl a little bit and see how this first year is going to shake out for us before we hire.” 

Diana Purnell, president of the Worcester County Commissioners, expressed a concern that managing the rental program would be too much work for one employee.

In addition, she said the county was already behind on the Jan. 1, 2020 enactment, considering that the county has no system and hasn’t started searching for the new employee. Tudor confirmed that even if the county authorized the software that day, it would not be ready in time. Rentals will have to be processed by paper until the software is ready. 

In addition to passing the license program with its reduced fee schedule, the commissioners agreed to buy the Munis CSS software at an initial cost of $50,492, implementation cost of $39,200 and annual maintenance of $11,736.

Tudor said the implementation cost may be less since county employees are already familiar with the program. The county will hire one employee to manage the program and will reevaluate hiring a second employee during the budget meetings. 

Nordstrom and Purnell opposed the motion. Commissioner Ted Elder was absent. 

Sarah Rayne, government and public affairs director for the Coastal Association of Realtors, said  she was glad to see the fees brought down to other license fees in the area. 

“You’re going to get more people who want to continue to operate their rentals and comply with the licensing requirement if you’re reasonable with your fee,” Rayne said. “Two hundred dollars is completely reasonable and I know that my members feel the same. I think the rental industry will continue to thrive.” 

She did express some concern about the possibility of confusion as the program starts, especially since it will be a slow start without the software on Jan. 1. 

“If this is supposed to go in effect on January 1, we need some direction on how to apply,” Rayne said.

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