Judge denies motion in lawsuit against the city over short-term rental tax

On Monday, Aug. 22, Routt County District Judge Michael O’Hara rejected a motion in a lawsuit against the City of Steamboat Springs seeking an immediate injunction to allow a local petition to proceed.

The decision was a setback in a local group’s efforts to call a referendum on City Council’s decision to put a new 9% tax on short-term rentals up to voters on the November ballot.

In the judge’s ruling, he wrote that denying the motion actually serves the public interest by permitting a comprehensive vote on the short-term rental tax. According to one of the plaintiffs who filed the suit, the ruling didn’t come as much of a surprise.  

“To be honest I kind of expected that,” said Ulrich Salzgeber, a board member for the Steamboat Springs Community Preservation Alliance, which has been backing the lawsuit and paying the attorney’s fees through a shared legal fund.

“I’m not sure that all the other members of the alliance felt that way,” Salzgeber continued, adding that he wasn’t sure what the next step for the alliance would be.

The plaintiffs in the suit are Salzgeber, Robin Craigen, Heather Craigen, Alise Elias and Dan Merrits.

The lawsuit began after they filed a request seeking to petition for a referendum on City Council’s decision to put a 9% short-term rental tax on this November’s ballot and Steamboat Springs City Clerk Julie Franklin rejected their petition, reasoning that per the town charter, “the levy of taxes” was exempt from the powers of a referendum, among other reasons.

If the plaintiffs were granted their motion for a preliminary injunction, the city would have been instructed to allow the petitioners’ committee to proceed gathering signatures immediately.

While the judge’s rejection upholds the city clerk’s decision to not allow the committee to gather signatures, it doesn’t necessarily defeat the plaintiffs’ case.

The plaintiffs argued the city’s denial of their application for a petition violated their constitutional rights, but in Monday’s ruling, O’Hara decided against granting the injunction, saying the plaintiffs were likely not threatened with immediate irreparable harm. 

“Any potential harm to plaintiffs is greatly diminished by their retained right to oppose the STR Tax by traditional campaign efforts,” according to Judge O’Hara’s written order. “Plaintiffs may still solicit support for their position and even collect signatures on a petition (albeit not one approved by the City Clerk) in an effort to lobby City Council to reconsider their position.”

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