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Mr. Dolan said HCD is primarily concerned with the city's supply of an adequate and viable inventory. Mayor Thorne noted that it is also possible that HCD, after its review, will discredit some of the sites themselves and it is therefore prudent to maintain a reasonable buffer. Councilmember Brown also noted, however, that as these are the same housing sites submitted with the 2007-2014 Housing Element there is less likelihood they will be controversial. Mr. Dolan continued his presentation and reviewed some of the more prevalent feedback received as part of this update process. The most prevailing themes expressed related to the interest in the CM Capital 2 site as well as a desire to restructure the current Inclusionary Zoning Ordinance. As has been explained to the Council and public on several occasions, the outcome of more recent court decisions like the Palmer case has had an impact on cities' ability to implement inclusionary zoning as they have in the past. With the current structure as well as some fairly aggressive negotiations, the city has nonetheless been fairly successful in achieving the spirit of the ordinance as well as in securing affordable units. The process involved a number of questions regarding the Growth Management Ordinance, primarily related to the public's lack of understanding that the city was obligated to make up for its lack of inventory in the last two planning periods and therefore did experience the surge of development already discussed. The public also shared a number of comments related to infrastructure, many of which understandably pertained to water. Mr. Dolan noted that all sites were thoroughly evaluated in an Environmental Impact Report (EIR) for the 2007-2014 Housing Element. As no new additional sites are proposed as part of this update, and addendum to the existing EIR was prepared for this update. Vice-Mayor noted and Mr. Dolan confirmed that the average annual development over the last two RHNA cycles, including those projects approved at the end of the previous cycle, was only 244 units. Mr. Dolan added that at the time, the Growth Management Ordinance would actually have allowed up to 350 units per year. Mr. Dolan shared the staff recommendation that the Council approve submittal of the Draft Housing Element Update to HCD, consider the changes to the Housing Sites Inventory as recommended by the Planning Commission, and consider the changes to various Goals, Policies and Programs as recommended by the Economic Vitality Committee. Councilmember Brown asked and Mr. Dolan confirmed that while Growth Management limits the issuance of permits to 235 units per year, there is a caveat that allows a borrowing from future years provided the total for the entire planning cycle is not exceeded. She asked whether the Council, with a majority vote, has the authority to increase or decrease that number. Mr. Dolan said there is some flexibility built into the ordinance that would allow the Council to approve more or less than Growth Management allows in a given year, provided that difference is made up for in other years and the cumulative total never exceeds the RHNA allocation. Councilmember Brown noted that when Growth Management would have allowed 350 units per year, the city only averaged 244. Mr. Dolan advised that attempting to limit the total growth to less than the RHNA allocation is exactly what precipitated the city's legal troubles. He explained that during that the shortfall in those planning cycles related to an absence of projects rather than direct attempts to limit growth through the denial of projects. While the city is required to zone for rather than build housing, it is also obligated to approve projects that meet the city's requirements and fall with the RHNA allocation for that planning period. Councilmember Narum asked how it is determined who is awarded an available affordable unit. City Council Minutes Page 7 of 17 September 2, 2014