Consideration and Approval of First Amendment to Cooperative Purchase Contract: with CDW Government, LLC for Deckard/Rentalscape short-term rental monitoring software and services for FY2025-2026 with an option for FY2026-2027.
 

1. Approve the First Amendment to Cooperative Purchase Contract No. 2025-27 with CDW Government, LLC for Deckard/Rentalscape short-term rental monitoring software and services in the amount of $72,407.95, plus one additional optional year at an estimated cost of $75,000; and
2. Authorize the City Manager to execute the necessary documents.

The City of Flagstaff has utilized short-term rental (STR) monitoring software since 2020 to identify, track, and enforce compliance of STR properties operating within the City. This software is essential for the City's STR licensing program, which was established pursuant to Arizona Revised Statutes § 9-500.39 and City Code Chapter 4-08.

The Deckard/Rentalscape platform provides comprehensive STR monitoring services including: property and address identification, compliance monitoring, rental activity reporting, real-time listing monitoring across 10,000+ websites worldwide, and a constituent portal for public-facing STR information. This First Amendment continues the City's contract with CDW Government for the Deckard/Rentalscape software for FY2025-2026 with an option for FY2026-2027.

The First Amendment amount is $72,407.95, which includes:

• Rentalscape Address ID Compliance: $62,481.28
• Rentalscape Deckard Constituent Portal: $5,253.00
• Sales Tax: $4,673.67

The initial contract executed in October 2024 was $62,994.32. The City anticipates renewing one additional year for FY2026-2027 at an estimated cost of $75,000. Funds are available within the Customer Service Section budget for this purpose.

Staff completed a fee analysis for the STR license fee in 2023. The annual cost of service was calculated as follows: Personnel ($101,000), Software Services ($36,000), Operating Expenses ($22,000), and Indirect Costs ($15,000), for a total cost of service of $175,000. With approximately 1,000 STRs anticipated to receive a license annually, the license fee was initially set at $175. As of December 2025, there are 1,027 active STR licensed properties.

Although the Deckard/Rentalscape software is more expensive than the previous provider, other costs are now included in the contract, like the mail campaign for owner notifications to license their property. Additionally, actual costs in credit card processing fees have been less than originally projected. The license fee includes an annual increase of $5 built in, which offsets increases in software costs and staff overhead. The current license fee is $185, which is in line with the cost of the licensing services currently. Pursuant to A.R.S. §9-500.39(f), the license fee may not exceed the actual cost of issuing the license or $250, whichever is less. The current license fee remains within these statutory limits.

Project Name:  Short Term Rental Licensing Software
Cost: $72,407.95 1st amendment, $75,000 estimated renewal
Account Number Budgeted: 001-02-033-0129-1-4343
FY Budgeted Amount: FY 2025-26 $76,810
Grant Funded:  No
Funding Source: General Fund

 Council has taken several actions related to STR monitoring and regulation:

• April 2020: Council directed staff during the budget retreat to purchase technology to collect data and monitor STRs.
• September 15, 2020: Council approved the initial LodgingRev short-term rental software contract totaling $73,960 for a two-year term.
• October 11, 2022: Council directed staff to create a Short-Term Rental Licensing System following passage of SB1168.
• July 2023: Council adopted the STR licensing ordinance (Ordinance No. 2023-20).
• October 2024: The City entered into an initial Deckard/Rentalscape contract for $62,994.32.

1. Approve the First Amendment to Cooperative Purchase Contract No. 2025-27 with CDW Government, LLC for Deckard/Rentalscape software in the amount of $72,407.95; or
2. Direct staff to pursue alternative STR monitoring solutions; or
3. Do not approve the contract amendment, which would result in the City losing STR monitoring capabilities and hindering enforcement of the STR licensing ordinance.

• In 2016, Arizona Senate Bill 1350 preempted municipalities from prohibiting short-term rentals, limiting the City's ability to regulate STRs. In 2019, Council expressed a desire to collect data related to STRs and their impact in Flagstaff. At that time, it was estimated there were 1,300-1,700 unique STR listings in the greater Flagstaff area.
• In September 2020, the City entered into a two-year contract with LodgingRev for STR monitoring software. This software allowed the City to identify STR properties, monitor listings across multiple platforms (AirBnB, VRBO, etc.), and begin collecting data on the STR market. The City required registration of STRs beginning in January 2021.
• In July 2022, Arizona passed SB1168, which allowed municipalities to require STR licensing, charge license fees up to $250, require emergency contact information, mandate neighbor notification, and impose penalties for violations. Following this legislation, Council directed staff to develop a licensing system.
• In July 2023, Council adopted the STR licensing ordinance (City Code Chapter 4-08), establishing a $175 annual license fee and comprehensive requirements for STR operators. The licensing program became effective in Fall 2023.

• Safe & Healthy Community: Ensure the built environment is safe through use of consistent standards, rules and regulations, and land use practices.
• Livable Community: Achieve a well maintained community through comprehensive and equitable code compliance.

• Goal LU.7: Provide opportunities for a diversity of housing types that are compatible with neighborhoods.

The Carbon Neutrality Plan identifies that climate change will increase visitation, migration, and demand for housing in Flagstaff as Phoenix-area residents seek refuge from rising temperatures. The STR monitoring software helps the City track and manage the conversion of residential housing to short-term rentals—a trend that reduces housing availability for local residents and can increase car-dependent commuting from outlying communities, contributing to higher greenhouse gas emissions. A priority of the Carbon Neutrality Plan is strengthening our neighborhoods and decreasing dependence on cars. 

The Deckard/Rentalscape software supports the City's 10-Year Housing Plan by monitoring short-term rentals, which the Plan identifies as contributing to Flagstaff's housing undersupply—approximately 535 units have been converted from long-term residential use. Effective STR tracking and enforcement helps preserve housing stock for local residents and supports the Plan's overarching goal to reduce the affordable housing need by half over the next ten years.