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Commissioner Lopez indicated that she would like the project to include more affordable units for the median and low-income and did not believe the proposal met the needs. She felt that she could possibly support the project if all of the affordable units were 80% AMI or lower. Commissioner Welsh thought that having the City work with the developer and offer incentives would have provided a more acceptable proposal. She felt that the proposed development was a good use of the property, but it did not meet the need for studio and 1-bedroom units. She felt further discussion was needed so the developer could present a proposal that would come closer to the requirements of the Inclusionary Zoning Ordinance. Chairperson Casey indicated he agreed with the comments of his fellow Commissioners and was concerned about setting a precedent relative to the 15% requirement. He indicated that he would like: 1)additional review on the 15% issue and related IZO matters, including incentives; 2)a copy of the February 21, 2013, letter from Citizens for a Caring Community to be forwarded to the Planning Commission; 3)generally a greater level of affordability in the proposal; and 5) consideration to housing cap requirements if the number of affordable units derived from this project fall short. Chairperson Casey discussed with Mr. Bocian what the process should be if this Commission did not approve the Affordable Housing Agreement with Pleasanton Partners, LLC. Mr. Bocian advised that the Commission would need to direct staff to meet with the developer to try to renegotiate the agreement terms and bring back to the Commission. Mr. Bocian discussed with Commissioner Butler the concept of credits given to developers for over-building and how staff would look at this project to come up with a recommendation. He advised that staff reviews each project individually and tries to obtain the best possible project each time. Commissioner Probert indicated that he respected staffs recommendation but felt that the issues of precedent setting and meeting Housing Element needs were important. Chairperson Casey discussed the matter with the Commission. It was suggested that the item be tabled and added to the agenda for the March meeting to allow staff time to meet with the developers to discuss the concerns expressed by the Commission. 7. Information Regarding History and Current Status of Lower Income Housing Fund Mr. Erickson reviewed with the Commission information regarding the history and current status of the Lower Income Housing Fee (LIHF). He advised that the fee was first established by the City in 1978 at$400 per unit for new residential projects. The fee remained at $400 until 1990, when a major adjustment was made based on the results of a detailed nexus study. Fees were again reexamined in 1999 in conjunction with an updated nexus study. In May 2003, the nexus study was again updated, and both the residential and COI fees were increased. The Commission looked over a Lower Income Housing Fee balance table provided by staff. Commissioner Probed discussed the LIHF balance increases since 2004 and the fact the funds have not been used. Mr. Erickson noted that the current balance in the LIHF is approximately $16.4 million, of which, approximately$8 million has been earmarked by City Council for the future redevelopment of Kottinger Place and Pleasanton Gardens. He advised that based on projections, the LIHF could potentially grow by an additional $10 -$13 million over the next five years using current fee amounts, although that amount would be reduced by any projects that provide affordable units instead of paying fees. Page- 5 -