Mammoth’s Council forgives interest, penalties in TOT enforcement case
Critics cry foul
That has set off some controversy in the wake of the decision, with commercial rental property owners incensed over the move.
Kevin and Carolynn Cozen, who live in Santa Monica and are second homeowners in Mammoth, own the home in question, located at 382 Hillside. Last year, the Cozens were busted by the Town for renting the home on VRBO on a nightly basis. The Town prepared an assessment for the property, dating back the full three years allowed by municipal code from June 2009 through May 2012.
The assessment, according to Town Acting Finance Director Cyndi Myrold, used “assumptions” based on VRBO’s general online rates and rental calendars for the property. Including past due TOT, interest and penalties, the assessment at the time totaled a whopping $96,018, including $3,300 in administrative citations.
The Cozens appealed the assessment on Sept. 24 last year, and submitted detailed accounts of past transient rentals, which added up to estimated, uncollected TOT of $15,220.99, or $22,435.96 with penalties and interest. The Town reviewed the documents and on Oct. 8 issued a Notice of Determination, agreeing with the new, reduced amount. The Cozens, however, were still not satisfied, and on Oct. 17 filed an appeal, finally haerd by Council at its regular meeting Wednesday.
The Town has been working on enforcing its ban on single family nightly rentals, and even though these types of rentals are not allowed in Town, any rentals are still subject to TOT collection. Earlier this year, Council took up the issue on whether to legalize them, though no action has yet been taken.
During his testimony, Kevin Cozen said, “I feel like I’ve been mugged.” He went on to say he found “the way it went down was very disheartening and unprofessional.” Cozen took issue with the Town’s assumption of a nightly rate and dates, which led to the initial tax bill he and Carolynn found exorbitant. “Just because a calendar day is blocked out, doesn’t mean it’s been rented,” he said, adding that some of those blocked dates were for the Cozens and their family.
“We love it here,” he said. “As soon as we could afford it, we bought a home here. We had a rental property in Ventura and paid TOT there, and up here we saw [numerous] homes online for rent in Mammoth. We charged 13% for TOT, based on what we saw other renters charging.”
The Cozens maintain that they weren’t trying to dodge paying TOT. “We’re just not used to seeing places without single-family rentals,” Carolynn told The Sheet. “We’re happy to pay TOT.” Kevin, however, said the Town wasn’t interested in taking it from them.
According to Kevin, after being told of the nightly rentals prohibition, the Cozens called the Town, and tried to register their property in good faith, but were supposedly told that there was “no tax on short term rentals.” So far, there is no way to confirm the call or its contents, a point noted later by Councilmember Jo Bacon. The Cozens said the $96,000 bill scared them, and they stopped taking new rentals in December 2011, only honoring previous commitments. Still, they insist that if the Town was “letting this happen” at the time, penalizing them isn’t right, and leaves things on “a sour note.”
“We bring people here who spend money,” Kevin told Council. The couple suggested paying the TOT owed, but asked for a waiver of the interest and penalties.
On the dais …
Councilmember Michael Raimondo said the appeal is yet another reason to discuss the pros and cons of single family rentals, and get the matter addressed, legalized or not. There is, he pointed out, no history of forgiving penalties for other similar violations, such as those involving business licenses, and stated there shouldn’t be on this. “It sends absolutely the wrong message,” Raimondo told The Sheet.
Councilmember John Eastman said the onus to know about single-family rentals not being allowed should be on the homeowner and real estate agent. “Ignorance is no excuse,” he said. Eastman then softened his stance, supporting waiving fees and penalties.
Mayor Matthew Lehman, however, was anything but soft. “I appreciate the situation the [Cozens] are in, these are tough times for everyone up here,” he began. “But I like my snow removal and parks, and TOT is 70 percent of that funding. [Nightly rentals] are taking business from legitimate business owners. Clearly it was known taxes were due. I have zero tolerance until the law changes. If we start bending on this rule, it negatively affects everyone in the community.”
The Cozens’ main supporter on Council seemed to be Rick Wood, who said he still sees illegal renters in town. While supportive of the Town’s recent clamping down on TOT violators, he did opine that the process might not be “as thorough or complete as it could be.” He further said that, in his opinion, there was no significant rebuttal testimony that contradicts the Cozens’ position that the Town might have misled them into thinking that, at least initially, TOT tax wasn’t applicable to their property, and credited the couple for stopping at a certain point. The taxes, he said, were due, but added he favored waiving the interest and penalties.
Wood has had other dealings with single-family nightly rentals, previously having represented another couple, Darin and Jean Twilegar, who were subpoenaed for records relating to nightly rentals of their property at 98 Summit Street. Records showed that, during the Oct. 18 Council meeting, Wood abstained from voting on a consent agenda item on the Twilegar subpoena, but his representation of a homeowner in a TOT case troubles some in the property rental community, who think such a client relationship should have disqualified him from participating in Wednesday evening’s agenda item.
Ultimately, only Raimondo and Lehman dissented. After the vote, the Cozens said they were pleased with the outcome, which they said takes the amount back roughly to the 13% collected on most of their rentals. “If you see anyone at our house from now on, it’ll either be us or our kids,” Kevin said.
In other town news…
Mammoth’s Town Council also voted unanimously Wednesday night to temporarily extend reductions in permit fees for single-family home construction and remodels. The reductions were scheduled to sunset in August 2010, but have been extended since. The Town, however, has been pressed by local contractors to fill a vacant Permit Technician position, which is currently underfunded in the 2013-2014 budget by about $50,000, roughly the amount that the Town estimates it has foregone due to the fee reductions. Architect Bruce Woodward said he thought it was worth giving up the reductions in favor of the PT position. The fee reductions are now set to expire as of July 1.
And Mammoth’s Town Council also voted unanimously to approve an ordinance establishing standards for new and reconstructed woodstove inserts. The woodstoves are the subject of a massive inspection and retooling project, since many were inserted in fireplaces with combustible material, and are subject to hydrolysis, which saps the inherent moisture from the materials and over time lowers their ignition point. Between 3,000 and 4,000 of the inserts requiring upgrading or replacement are thought to exist in Mammoth Lakes. State law requires the task completed by 2022. Council opted for a full 10-year timeline on the project, which local vendors and Town Building Inspector Johnny Goetz think should be enough time to complete the work.
And “green” means go, especially for Don Wright, Jr., the new owner-operator of Green Mammoth, one of two medical marijuana dispensaries permitted in Mammoth Lakes. Wright told The Sheet this week that the company opened its doors for business as of Feb. 15. “I was unhappy that [the former] Green Mammoth had to close its doors, so I worked with a group of old patient members to reopen it,” Wright, who goes by the nickname Junior, said.
The operation is located at 94 Laurel Mountain Road, in the KMMT Radio building, in exactly the same spot as the previous incarnation of the business, upstairs from Alpine Stove and Mercantile. Patients must be 21 or older, have a valid California Drivers License or ID, and possess a physician’s statement and recommendation. “I hope to see all the old faces that I saw before, and some new ones.”
The Cozen’s testimony “I feel like I’ve been mugged” should be cited for filing a false police report.
The Cozen’s and all the others have been shamelessly renting in the face of the law for years.
Our town is broke and they have been making money hand over fist.
All this while the long time businesses who have been honestly paying TOT and are a day late get no grace.
This is the stupidest thing the Mammoth Town Council has ever done.
Ignorance of the law is not an excuse. They owe the money and penalty.
Eastman, Wood and now Bacon will be recalled for this one!
I agree that this is a ridiculous outcome. While I do not believe for a moment they were unaware of the nightly rental prohibition, it is a well established principle of law that “ignorance of the law is no excuse.”
By renting out their home on a nightly basis, the Cozens forced their neighbors to bare the brunt of their greed through increased noise, garbage and traffic. Additionally, they stole business from legitimate lodging businesses, who provide the proper on-site services and regulation needed for nightly rentals.
I couldn’t agree more! Some might call it ignorance but you have to know that at some point these folks would have talked to a rental company, were probably turned away and decided to go agains the law on their own. Or when you’re pricing your home to be competitive and looking for comparable (oops! there weren’t any) they noticed that they were one of VERY FEW to be advertising. You don’t get to be where they are by being ignorant!