Hi Sarah, here is what I can tell you. I received a similar notice from the city. I spoke with the gentleman handling my notification. He was very nice on the phone, explained the city's position and ultimately asked for proof that I was in compliance. Because of my particular situation I took down my listing completely and cancelled my future guests. It was very sad for me and my guests.
The city's position is no short-term rentals, that is, rentals for less than 30 days. But the city also said that you can have renters who stay just a few days as long as you do not rent the space to anothe renter until the 30 days are up. So basically you are allowed one rental agreement per month. No more than that.
As far as your guests who are already booked I would advise you to contact them in the order of their arrival and if you have more than one renter in a month have the extra renters cancel their reservation with you. Depending on how you set up your listing the renter may not receive any type of cancellation fee. You will however if you have 10 or more cancellations in a short period.
Another thing you may want to do is reach out to other Airbnb hosts to see if any of them can take your extra renters.
Good luck,
Rick