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Mr. Bocian said staff felt if the methodology is changed, it would be necessary to perform an AB 1600 nexus study to implement it. That is a significant diversion from the established fee and there is no justification for that type of fee. There would have to be some methodology that showed that type of fee was needed to offset the impact of that type of housing. A consultant would have to be retained to do that. Staff also felt it would create some issues relative to the administration of that program in terms of when the fee were collected and how to know what that home would sell for. For example, most fees are collected at the time of building permit issuance and in this case the fee would have to be collected just before occupancy of the home. There have been many cases where the expected sales price of a home was much different from the actual sales price. The biggest issue would be the AB 1600 report. After the study, Council would have to determine whether that was a fair and appropriate to handle the fee. Mr. Campbell preferred Option 3 of the staff report and asked if that were the staff recommendation. Mr. Bocian said it was. That would select the current methodology as updated and authorized staff to go to the community and bring back a recommendation on the fee. Ms. Michelotti referred to the inclusionary housing ordinance and asked what happens when developers comply with that. Mr. Bocian said they do not pay a fee. Ms. Michelotti felt that in the future, the commercial/office uses are the only ones where this fee will apply. Ms. McKeehan indicated there would probably be smaller projects. Ms. Michelotti clarified that this fee would apply to individual custom lots. So there is an ordinance that requires developers to provide housing rather than pay the fee and if they do that no fees would be paid. In view of what is happening with developers building below the mid point of the General Plan, she asked staff if the calculations were based on below the mid point of the General Plan? Mr. Bocian said the calculations were based on the housing cap of 29,000 units. Ms. Michelotti did not favor the Housing Commission recommendation because of the requirement for a nexus study. Ms. Ayala asked if staff considered the ABAG housing requirements? Mr. Bocian said staff did not look at them specifically in this report. It considered Pleasanton's housing cap and the number of units to be developed between now and reaching the cap. Pleasanton City Council 29 09/03/02 Minutes