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units that may be built and identify what year a developer may pull a building permit to construct the units. As an example, the City Council could approve a PUD for 50 units in 2015, but authorize issuance of the building permit for these units in 2017. Therefore, for tracking purposes, the 50 units would be deducted from the annual growth management limit in 2017. In essence, it's best to think of the current ordinance as granting a developer a "ticket" to develop a certain number of units in a specific year. Notwithstanding this current requirement, due to the recent "backlog" of developments that had "by right" status, this provision of requiring growth management units to be constructed in a specific year has not been applied. However, with the City's approved Housing Element, and the lifting of the by right status, it is now necessary to re- implement this allocation process. While the current building permit oriented process has value in that a fundamental purpose of the ordinance is determining when a unit is to be constructed, it creates both significant administrative tracking issues and, more importantly, a system whereby developers must regularly request reallocations of their growth management approvals to accommodate construction schedules that are often impacted by conditions outside their control such as financing, the economy, design services, etc. The method is also somewhat confusing to the public who may sense the City Council is approving residential currently without realizing that it's actually approving development for future years. The building permit reallocation and "balancing" process is spelled out primarily in Section 17.36.090 which establishes a detailed system for determining when and how a developer requests the moving of building permits from one year to another. Options identified include trades with other developers, transfers and reallocations, all of which must be approved by the City Council. While the City Council has employed subcommittees to oversee the initial reallocation process, the actual approvals are subject to both City Council action as well as approval from multiple developers willing to trade and exchange growth management units allocations from one year to another. The recommended amendment would transition tracking of growth management approvals from the issuance of a building permit to project approval, which is most typically PUD approval or in infrequent situations, part of a design review or tentative map actions. As such, the year that a development is approved would be the year that the unit would be allocated unless the City Council determined that it should be allocated to a future year. The specific language implementing this change is included in Section 17.36.080 (d) as follows: "Any growth management unit allocation approved by the City Council will be deducted from the total number of annual growth management unit allocations available for the year in which the project is approved and from the total number of growth management unit allocations in the regional housing needs cycle." One immediate impact of this change is that it would negate a significant amount time related to unit tracking, proration, trades, and transfers. In addition, the process alleviates the need to constantly be tracking a developer's intention to pull permits, which is necessary if the Council and staff expect to know the number of growth management unit allocations available in any given year. While this change is fairly Page 3 of 7