Why would you think there is no legal basis for local government to introduce STR restrictions? @Stanley156
Presumably as a host you keep yourself up to date with STR legislation in your area, so would have known according to this letter received that you need a license to operate an STR business at your location for whole listings.
If you have chosen to operate without one this sounds like why you have been contacted.
Would it not be simpler to put your listing on hold and then apply for an appropriate license for your business? ?