CITY COUNCIL AGENDA PACKET WORKSHOP

For similar reasons, staff also does not recommend increasing the inclusionary rate for multi-family rental projects, retaining it at 15%. This would allow for other adjustments, such as deepening the affordability of inclusionary units, to be considered, and will ensure that rental projects with marginal financial feasibility remain viable. 3) Set Capital Facilities and Transportation Impact Fees below the maximum supportable by the Nexus Study, but at an appropriate rate that reflects the highest reasonable increase that can be made without severely impacting development feasibility. Setting fees at the maximum rates would have a severe impact on development feasibility, such that staff recommends that the maximum fee rates be adjusted downward. While it is possible the reductions could be achieved by “paring down” the capital projects list that is the basis of the fee, staff continues to recommend having a broad list that fully reflects the scope of needed facilities to accommodate the anticipated 29.4% increase in service population estimated in the fee study. In light of the many variables in play, and as numbers are not yet final, staff does not suggest the City Council direct the specific CFF, TIF or Water and Sewer fee levels at this time. Instead, staff requests the City Council provide input on the above three recommendations (agreement, disagreement, or alternative options), and any further input or direction as staff and the consultant team move forward to finalize the nexus fee studies and create a draft revised Inclusionary Zoning Ordinance. NEXT STEPS As noted, this workshop is intended to highlight the initial findings of the fee study update and obtain direction from the City Council on some of the more substantial decisions around formulation of the Impact Fee, Connection Fee, and IZO update. Staff notes that the detailed and final calculations of the nexus study are still under development, and so numbers may shift somewhat between now and when the studies are final – however, the feasibility assessment, and overall conclusions outlined here will remain valid. Staff anticipates the following next steps: • City Council Study Session #2 (June). A second study session will focus on more detailed policy considerations for the Inclusionary Zoning Ordinance, including with respect to alternative compliance (options to meet the inclusionary requirement, other than building on-site), refinement of the recommended affordability mix and other parameters for required on-site units, and process/procedural aspects of the ordinance. Should the City Council have additional questions or seek additional analysis from this May 7 meeting, that information would be presented at the subsequent Study Session. The second study session will also address the creation of a new Public Art Fee, including the pros and cons of creating and adopting such a fee and related program.