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Mr. Dolan explained that the City must account for Regional Housing Needs Allocation (RHNA) units, which he did not believe could be metered. Once that obligation is met, the City can impose other limitations it may have established. Mr. Fialho explained that this would be covered in greater depth at the next Council meeting but that State law says cities must comply with RHNA. The total RHNA units, divided by the number of years in the RHNA cycle, is the only means cities have to meter growth on an annual basis. State law also allows that when the demand exceeds the supply of available permits in a given year, the city may require developers to submit the projects for consideration so that the Council can prioritize which projects occur when. The criteria for such a program can incorporate things like infrastructure, traffic improvements, and other things that enhance the quality of life in the community. The City can then ask the developer to mitigate certain impacts through regionally identified solutions. This is the extent of the City's ability to regulate growth within the community, as opposed to the hard and fast limit like the housing cap. City Attorney Lowell added that in approving a project, the Council would still be required to make the findings that the development is consistent with the General Plan. He said there is considerable language in the General Plan that speaks to ensuring public health, safety and welfare, which requires that the City have adequate supplies of water and provide for things like education and housing. The City does still have control, albeit somewhat limited, and will have to proceed cautiously. Councilmember McGovern noted that the City has a current RHNA backlog and therefore cannot institute the sort of metering described. She asked if it is true that there is an alternative method to certifying the Housing Element if HCD will not. Mr. Dolan said she was likely referring to self-certification, which is not an official title or process identified in the statute and does not provide the same protections as a certified Housing Element. Councilmember Sullivan referred to his earlier comments regarding page 89, noted that preceding sentences seem to imply the same as the sentence in question and asked if the sentence stating "must be approved" could be removed. Mr. Dolan acknowledged the point but expressed concern over removing language that HCD insisted upon. He explained that staff engaged in extensive conversations with them about the nature of "by right" and this was one way of satisfying HCD without using that particular terminology. Councilmember Cook-Kallio said that during her tenure as Co-Chair of the Housing Element and Hacienda TOD task forces, she became concerned about the lack of a State-certified Housing Element. Part of that concern related to the fact that local businesses and the City could not apply for certain grants and, more importantly, that the City did not have the legal protections it otherwise would have. She said the Council and public talk a lot about fiscal sustainability and the importance of local businesses, but the City has averaged over $500,000 annually in outside consultant fees for land-use lawsuits. That is a cost that she finds very difficult to live with. She moved to approve the staff recommendation. Vice-Mayor Thorne seconded the motion. Councilmember McGovern said this has been a long battle and something that really changed the destiny of the community. She expressed concern that the HCD would hold the City hostage and only approve the Housing Element if certain language is included. She wished the committee had an opportunity to discuss this before coming to the Council and said she was not comfortable with the language presented. City Council Minutes Page 10 of 12 October 2, 2012