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Finally, as discussed with the City Council previously, due to the fact that the City was engaged in litigation and the update to the Housing element, it did not make adjustments to the existing 350 unit allocation number. As a result, from the this time until July 2014, the City Council will issue growth management allocations to the degree that the City meets its RHNA obligation and as such the following language has been added to Section 17.30.060: "For the Fifth Regional Housing Needs Allocation cycle that ends July 2014, the annual unit allocation shall be equal to the number of units required to meet the City's Regional Housing Needs Allocation for the Fifth cycle." Language regarding the new unit allocation process is included in Section 17.36.060 (A) and (B) Amendment to Suballocations Assuming the annual unit allocation number is amended, there is an issue with the suballocations since these are also "hard" numbers that relate directly to the 350 annual allocation, i.e., the total of the suballocations equal 350 units. As a result, the Subcommittee looked at a number of options to correct this situation including retaining the current ratio of suballocations and applying it to the new annual unit allocation number, developing a new set of ratios that are more aligned with RHNA and/or anticipated new residential growth, developing new suballocation categories or eliminating the suballocation. Ultimately, the Subcommittee and staff concurred that the suballocations create a degree of complexity to the ordinance that make it cumbersome to administer, that they may not be reflective of the type of residential development that will occur in the future and that create an impression of the types of development that may or may not occur in the future. As a result, the Subcommittee and staff are recommending that the subcategories be eliminated in favor of a single annual allocation number linked to each RHNA cycle. It should be noted that while reference to suballocations have been deleted from the recommended ordinance, it has been drafted to retain the basic provisions related to growth management approval, processes, transfers, uses, etc. and as such these provisions remain relatively the same. Attachment C includes a redline version of the existing GMO ordinance. Notwithstanding the removal of reference to suballocations, the Subcommittee anticipates that further continued review of the GMO in the upcoming year will focus on identifying a mechanism for allocating units in the event the number of applications potentially exceeds the number of available unit allocations. While the actual methodology for this has yet to be determined, it may include adoption of a point system that takes into account infrastructure improvements, development design quality, amenities, impacts, green building, etc. that would be considered by the City Council as part of its decision making process when considering development projects for growth management allocations. As such, the current recommended amendments may be viewed as interim steps in anticipation of a continued review to address these broader issues. Page 4 of 5