Despite Potential Conflicts, Nantucket Short-Term Rental Workgroup Get's "Green Light"

The State Ethics Commission has cleared short-term rental operators, political advocacy groups, and abutters of short-term rentals to participate on the town's new short-term rental workgroup.

Traditionally those individuals and groups - including ACK Now and Nantucket Together - would likely be considered to have a conflict of interest that would bar them from membership on the workgroup. But the Ethics Commission agreed with Nantucket town counsel John Giorgio's argument that the sheer number of short-term rentals on the island means those individuals and groups don't have a "prohibited financial interest" due to the fact that more than 10 percent of Nantucket's population already has a financial interest in short-term rentals, a key threshold for the Ethics Commission.

Those were among the key takeaways of a series of e-mails released Tuesday evening by the town as it seeks to provide transparency on the hot-button topic of short-term rentals.

Now the island's new short-term rental workgroup, which Town Meeting voters created in May after rejecting two competing visions for regulating short-term rentals on Nantucket, can move forward following the Ethics Commission clarifying who is eligible for appointment by the Select Board.

Giorgio said in an email to town manager Libby Gibson that the State Ethics Commission (SEC) has given them “essentially a green light” to move forward with the appointments.

Among the correspondence released on Tuesday was an email from Giorgio to assistant general counsel for the SEC, Michael T. McDonald, in which he asked McDonald for guidance on what he was prepared to advise the board.

Read the e-mail by clicking here

McDonald told Giorgio that he agreed with him on his following legal arguments:

- That an individual who rents his or home out for short-term rentals does not have a prohibited financial interest in serving on the Short-Term Rental Work Group due to the high volume of these renters on Nantucket.

- That he would urge the Select Board to consider carefully the implications of granting an exemption that states no members of the work group can be either engaged in or are employed by companies in the short-term rental industry because at this time there is no way to predict what recommendations the work group may make with respect to further regulation of short-term rentals. He added that one could reasonably argue that any financial interest in appointing the Work Group would be remote and speculative at this time.

- That individuals who serve as officers or directors of a nonprofit organization that participates in community discussions regarding short-term rental regulations may be appointed to the work group by the Select Board as long as they are not engaged in commerce or trade.

- That an individual who abuts a short-term rental does not have a prohibited financial interest in serving on the work group since any financial interest that a member may have, on the basis of abutter status, is shared by a substantial segment of the population, stating that approximately 64 percent of residential dwellings on Nantucket abut a short-term rental.

Giorgio said however he would advise anyone who falls under these categories to file a disclosure to “dispel any appearance of a conflict.” Giorgio also sent a follow up email to McDonald in which he outlined each board member’s potential conflicts of interest in appointing members of the STR work group.

McDonald’s lone concern was the possibility of vice chair Dawn Holdgate (employed by a real estate firm engaging in short-term rental business) or board member Melissa Murphy (owns a property management company that manages short-term rentals” having issues with section 19, which is a conflict of interest law. The law states “The conflict of interest law is intended to prevent, among other things, self-dealing. Section 19 of the law generally prohibits a municipal employee (paid or unpaid, appointed or elected, full-time or part-time) from participating in any particular matter in which the municipal employee, an immediate family member or partner, or a business organization in which he or she has certain affiliations, has a financial interest.”

While Holdgate and Murphy’s ties could coincide with this law, McDonald said as long as the selection process of work group members doesn’t involve a deep dive into their thought processes, he doesn’t see them violating section 19 or having any issues.

In early May, the two most controversial warrant articles at Town Meeting - the Planning Board's proposal to codify short-term rentals by right in any island zoning district and the political action group ACK Now's petition to regulate and curtail short-term rentals by non-residents - were both tabled. Voters narrowly approved a motion to punt the two articles in favor of creating the new work group to attempt to find consensus.

As it stands right now, the short-term rental work group will have nine voting members, including one representative from each of the following groups: the Planning Board, the Finance Committee, the Advisory Committee of Non-Voting Taxpayers, and an affordable housing advocate. The two political action groups that have been at odds over potential short-term rental regulations for over a year - ACK Now and Nantucket Together - will both have a seat on the work group, along with three at-large members. The Board of Health and the Nantucket Association of Real Estate Brokers would have ex-officio, or non-voting, members on the work group.

Three members of the Select Board - Bridges, Matt Fee and Brooke Mohr - along with Planning Board member David Iverson and Finance Committee chair Denise Kronau, will have final sign-off on the appointment of all nine members. The framework under consideration stipulates that any proposal would need the support of seven of the nine members of the short-term rental work group in order to advance to the Select Board for final consideration before it heads to the voters.