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Vice -Mayor Thorne said he would support the measure but has concerns over how this will be funded once the program is broadened. He has difficulty envisioning an election process funded by tax dollars. Councilmember Cook Kallio said one of the issues with a voluntary program like this is that money will be driven into areas that cannot be identified. Without widespread reform in a number of areas, that money may be driven underground. She indicated this is a pilot program and she will wait to see what happens. Mayor Hosterman said she has the same concerns but is willing to support the pilot program. MOTION: It was m/s by Cook Kallio /Sullivan to adopt the resolution in support of Proposition 15, the California Fair Elections Act, as presented. Ayes: Councilmembers Cook Kallio, McGovern, Sullivan, Thorne, Mayor Hosterman Noes: None Absent: None 16. Overview of Urban Habitat Litigation, effect of Judge's Order, and Potential Next Steps City Attorney Lowell presented the staff report, stating that staff learned of the judge's order in the Urban Habitat litigation on March 12, 2010. Staff, legal counsel, and the Council have been reviewing the decision and have met in Closed Session on several occasions to determine how to proceed. He said that both staff and the Council feel it is important to speak publicly on the matter so that residents and concerned individuals can better understand the ruling, as well as the decisions the Council is now facing. He advised that as there is still existing litigation, certain aspects of the case still cannot be discussed in public. He introduced special defense counsel Tom Brown of Hanson Bridgett. Mr. Brown stated that the case is an intersection between local and state law, involving a challenge to two of the City's fundamental growth management strategies the voter approved housing cap and the City's Growth Management Ordinance (GMO) as well as to the legal adequacy of the 2003 Housing Element and the implementation of all land use laws. He provided a history of the issue, stating that in 2006 the advocacy group, Urban Habitat, met with the City Manager and former City Attorney to discuss the allegation that existing growth management laws and the implementation of the Housing Element conflicted with state law affordable housing obligations. The claim was made that the City's cap, the implementation of that cap, and the GMO are inconsistent with the Housing Element law, which contains specific requirements on what cities must do to identify sites that will be made available to accommodate affordable housing allocations. He briefly reviewed the role of the Association of Bay Area Governments (ABAG) in the assignation of Regional Housing Needs Allocation (RHNA) numbers and explained that the claim was made that the City's housing cap and GMO prevented the accommodation of third planning period RHNA numbers. In addition, a claim was made that Housing Element Program 19.1 stated the City would accomplish rezonings to meet RHNA requirements by July 2004. For a variety of reasons, the City was not able to accomplish that but has always maintained its intent to carry that forward. Mr. Brown stated that the City respectfully disagreed with Urban Habitat's claims and in November 2006. A lawsuit was brought by both Urban Habitat and Sandra De Gregorio, a local mother who claimed a need for affordable housing that was not being met by the City. Both plaintiffs made the claims previously described as well as claims that the City had failed to carry City Council Minutes Page 10 of 22 April 6, 2010