Court date set for lawsuit against city on short-term rental tax issue

An emergency court date of Tuesday, August 16 has been set for the trial between members of a committee of petitioners and the city of Steamboat Springs.

The committee of petitioners representing the Steamboat Springs Community Preservation Alliance filed its complaint on August 1, to which the city filed its response on Monday, August 8.

The lawsuit was filed shortly after City Clerk Julie Franklin – who is named as a defendant in the lawsuit – rejected the committee’s petition for a referendum on an ordinance that would put to a November ballot whether it had to levy a 9% tax on short-term rentals. The same committee also filed petitions to remove three city council members, which the city accepted.



The city clerk rejected the petitioners’ request for a referendum, saying it was insufficient. In Franklin’s decision, she explained that the Steamboat Springs Home Rule Charter exempts the “municipal legislature” — such as collecting taxes and calling special elections — from referendum rights.

“The right of citizens to submit referendum petitions on municipal ordinances is reserved in the Colorado Constitution and the city charter,” wrote Bill Kyriagis, the attorney representing the plaintiffs, in a statement to Steamboat Pilot & Today. “The First Amendment also protects the right to ask the government to redress grievances. These rights are fundamental.



The committee is seeking a declaratory judgment declaring that the petition proposed by the preservation alliance is valid, which would allow the petitioners to begin collecting signatures.

The city retained the services of Mark Grueskin as legal counsel.

The city’s response cites several legal precedents claiming that they confirm that municipal charters limiting the power of referenda are authorized by the Colorado Constitution as long as they are “strictly construed,” meaning that any type of legislation determined as exempt from a referendum must be specifically identified and limited in scope.


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Defendants claim that the language in the City of Steamboat Springs charter that excludes the “levying of taxes” from referendums is strictly construed and therefore consistent with the state constitution.

The plaintiffs argue that the section of the city charter regarding referenda makes no mention of “municipal legislature.”

While a section of the city charter excludes “the levying of taxes” from the powers of referendums, it does not include the language “municipal legislature”.

Because of the Colorado Taxpayer Bill of Rights (TABOR), all taxes must be voted on by ballot, so the committee argues that because the rental tax ordinance in short term would send the tax question to the voters, it does not directly collect any taxes.

Another issue in the case may be the city’s and the plaintiffs’ conflicting definitions of “special election” because the city’s charter excludes the powers of referendum ordinances that call for special elections.

In a written response, the city said, “When the voters of Steamboat Springs adopted their charter, they agreed that certain city ordinances are not subject to a referendum, including any ordinance that calls for a special election. The city charter was written to encourage timely public elections on public issues. »

The city argues that because the November election is in an even-numbered year — when no local offices are up for election — any question on the local ballot would be considered a special election.

Like Steamboat, many municipalities limit referendum powers on special election ordinances because a successful referendum petition simply triggers another special election, which many city officials find unnecessary and obstructive.

For that reason, city officials accused the petitioners of employing tactics that would delay a vote on the short-term rental tax and could confuse voters.

The plaintiffs state in their complaint that “the order did not ‘call’ the November 8, 2022 election. That was already scheduled to happen. The plaintiffs also pointed out that the order describes the election as an ordinary municipal election.

It will be up to a judge in the 14th judicial district to determine whether the language of the order affects whether the balloting issue is defined as a special election or not, as the city charter defines regular municipal elections as “held every two years at which candidates for elective city office are elected”.

The city wrote in its response that the plaintiffs offered no definition for a special election.

The judge may also have to determine whether putting a tax question on a ballot is considered a “tax levy”.

Tuesday’s hearing will give both sides their first chance to argue their case before a judge. Beyond the hearing, there is no estimated timeline for how long the case will last.

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