Planning Commission

City of Sunnyvale Meeting Minutes - Final Planning Commission Monday, October 27, 2014 7:00 PM Council Chambers and West Conference Room, City Hall, 456 W. Olive Ave., Sunnyvale, CA 94086 7:00 P.M. PLANNING COMMISSION - STUDY SESSION - WEST CONFERENCE ROOM 1 14-1022 SUBJECT Introduce an ordinance to amend the Title 19 (Zoning) to include floor area ratio threshold standards for multi-family residential zoned property; and approve amendments to the City-wide Design Guidelines to include design techniques for multi-family residential projects that exceed the floor area ratio threshold. (Study Issue) Staff Contact: Andrew Miner, (408) 730-7707, aminer@sunnyvale.ca.gov 2 Public Comment on Study Session Agenda Items 3 Comments from the Chair 4 Adjourn Study Session 8:00 P.M. PLANNING COMMISSION - PUBLIC HEARING - COUNCIL CHAMBERS CALL TO ORDER Chair Melton called the meeting to order at 8:00 p.m. SALUTE TO THE FLAG Chair Melton led the salute to the flag. ROLL CALL Present: 7 - Chair Russell Melton Vice Chair Ken Olevson Commissioner Ralph Durham Commissioner Sue Harrison Commissioner Larry Klein Commissioner Ken Rheaume Commissioner David Simons City of Sunnyvale Page 1 Planning Commission Meeting Minutes - Final October 27, 2014 PUBLIC ANNOUNCEMENTS/PUBLIC COMMENTS None. CONSENT CALENDAR 1.A 14-1019 Approval of the Draft Minutes of the Planning Commission Meeting of October 13, 2014 Comm. Durham moved to approve the draft minutes. Comm. Klein seconded. The motion carried by the following vote: Yes: 6 - Chair Melton Commissioner Durham Commissioner Harrison Commissioner Klein Commissioner Rheaume Commissioner Simons No: 0 Abstained: 1 - Vice Chair Olevson PUBLIC HEARINGS/GENERAL BUSINESS City of Sunnyvale Page 2 Planning Commission Meeting Minutes - Final October 27, 2014 2 14-0792 Consideration of Housing Mitigation Fee Nexus Study Findings and Alternatives Staff Contact: Suzanne Isé, Housing Officer, (408) 730-7698, sise@sunnyvale.ca.gov Suzanne Ise, Housing Officer, presented the staff report. Comm. Rheaume verified and compared with Ms. Ise the proposed fee increase for office, retail and lodging with those of nearby cities. Vice Chair Olevson and Ms. Ise discussed fee calculation and how fees are applied in other cities, and the relationship between the fee structure and rate of development in Sunnyvale. Vice Chair Olevson and Ms. Ise also discussed how the proposed fee increase would affect the Below Market Rate (BMR) program, and the number of very low- and low-income units that must be provided to reach the goal for the current Regional Housing Need Allocation (RHNA) period. Comm. Harrison and Ms. Ise discussed the types of loans provided by the City for rehabilitation or construction of rental properties and the preference for providing loans rather than grants. Comm. Harrison confirmed with Ms. Ise that no loan has yet been forgiven, and discussed the typical number of years a restriction term lasts for low-income properties and what becomes of the properties once the term has ended. Hanson Hom, Director of the Community Development Department, commented on how rehabilitation loans extend affordability periods for older rental properties. Comm. Simons confirmed with Ms. Ise that the fees go into a special, segregated fund, that allocations are reviewed by the Housing and Human Services Commission and are approved by City Council, and that the City budget contains information on projects and goals for upcoming years. Comm. Simons also confirmed with Ms. Ise that staff is amenable to adding more detail to the recommended alternative. Comm. Durham verified with Ms. Ise the number of units currently subsidized by the City through the Housing Mitigation Fee, and how the return on cost is calculated. Chair Melton opened the public hearing. Pat Sausedo, Executive Director of NAIOP, discussed her concern with adopting the nexus study and said future governing bodies could increase the fee to the proposed maximum, which would hinder development. Ms. Sausedo also said that City of Sunnyvale Page 3 Planning Commission Meeting Minutes - Final October 27, 2014 NAIOP has commissioned a financial consultant to provide a peer review of the nexus study. Chair Melton and Ms. Sausedo discussed when the independent review of the study would be available and whether NAIOP would support the fee without the nexus study. Comm. Simons confirmed with Ms. Sausedo that recommendations and a discussion of methodologies will be included in the peer review. Chair Melton closed the public hearing. Comm. Harrison confirmed with Ms. Ise that the Alternatives presented in the staff report are not to adopt methodologies or the premise of the nexus study, but are to recommend adopting the fees. Comm. Harrison confirmed with Ms. Ise that the fee is subsidizing over 700 affordable to very low-income households and the goal in the draft Housing Element is to obtain an additional 650. Chair Melton and Trudi Ryan, Planning Officer, discussed previous nexus studies. Vice Chair Olevson moved Alternatives 1, 2, and 4 to recommend that Council expand the Housing Mitigation Fee to all net new square footage of all non-residential development projects, in any zone; recommend that Council consider adopting a fee of $12 per square foot for office/industrial projects ($6 per square foot for first 25,000 square feet), and $6 per square foot for retail and lodging projects, both based on net increase in square footage and adjusted annually for inflation as part of the annual fee schedule adoption; and recommend that Council have the new fee apply to projects where a complete planning application is submitted after the effective date of the fee. Comm. Simons seconded and offered a friendly amendment to include in the spending process the tracking of funds; keeping interest and loan repayments in the restricted fund; that future spending be reviewed by the Housing and Human Services Commission and City Council; and that goals are updated along with the spending plan. Vice Chair Olevson confirmed with Ms. Ise that all of these recommendations are current City policy. Comm. Simons suggested adding a short text about the process. Mr. Hom said the requested information can be included in the report to City Council but does not have to be a motion. Comm. Simons withdrew the friendly amendment. City of Sunnyvale Page 4 Planning Commission Meeting Minutes - Final October 27, 2014 Vice Chair Olevson said he is supporting the staff recommendation because it is a modest increase and the City needs to continually review its process to ensure competitiveness in the area to obtain new construction and meet goals. He said the builders council has concerns about the validity of the nexus study but that it is not part of the motion and the study contains currenlty available data. He said he is confident that the Planning Commission and City Council will evaluate current and future data and make an informed decision, and that the work done so far indicates that we should proceed with the staff recommendations. Comm. Simons said he will be supporting the motion and that it is premature to discuss how future mitigation fees may have a relationship to viability, especially without the report from the building association. He said he recommends forwarding this recommendation to the City Council, and suggests that Council consider adding information regarding the process of modifying the fees in the future. Comm. Durham said he will be supporting the motion, that the cost of living in this area is high for most people and that he is surprised to see that median income in the U.S. is in the low- to very low-income level for this region. He said we want people here to work and support those who cannot afford above-market rate housing, and that the next agenda item, the Climate Action Plan work plan, demonstrates that we cannot have people driving here everyday from 20 to 30 miles away, so it is better for everyone if we can get more people to stay in the area. Comm. Harrison said she will be supporting the motion, and that only providing low-income housing at great distance does not help the community from climate, stress and traffic standpoints. She said a big reason she is supporting the motion is because the fee is applied more evenly, not just in certain industrial zones, which seems a fairer playing field for developers who may no longer shy away from one area of the City and can choose development locations based on what is best for their project and the City. Comm. Klein said he will be supporting the motion, and that increasing the fee makes sense when looking at office and industrial areas because the Association of Bay Area Governments (ABAG) numbers are all directly related to the housing and jobs balance, and as we continue to add more large office space in the area, our housing numbers rarely keep up. He said current fees do not fully meet our long term goals, and he worries that the numbers may be too small for those areas and could have been a compromise between the $10 and $20 vision to be $15 but City of Sunnyvale Page 5 Planning Commission Meeting Minutes - Final October 27, 2014 that Council may reevaluate that. He added that a lower cost for lodging and retail makes sense, that he is glad staff listened to comments from the Planning Commission and that this is a good step forward. He said he is happy to hear how the fees have been used in the past 15 years and hopes that we will get even better use of the funds going forward. Comm. Rheaume said he will be supporting the motion, and that the fees are moderate and more fairly applied to all zones. He said the comments from the business community discussed concerns about the nexus study and the possible maximum fee but that it is not part of this motion and the proposed fees are reasonable. He added that additional low-income housing is a necessity. Chair Melton said he will be supporting the motion, that there has been a great discussion tonight and the Housing Officer did a fabulous job. He said the agenda item is about the Housing Mitigation Fee, but that naturally there is curiosity about the actual programs funded by the fee. He noted that the staff report provides a comprehensive review of the recommendation and he too wonders if the number could be even higher, but that the final decision rests with City Council and he looks forward to seeing what they will do. He said he is pleased to hear that the potential additional funding from the increased fee will get us closer to the RHNA numbers, which underscore the importance of affordable housing in Silicon Valley. He said the comment from the member of the public came just before the City Council study session tomorrow night, and that it would be great if NAIOP could say whether they support the fee structure outlined in staff recommendation 2. He said this is an opportunity for NAIOP to work with staff to understand the role of the nexus study, and that he likes that NAIOP is doing an independent peer review, and that while it is not the place of the Planning Commission to recommend a schedule to Council, if NAIOP asked for more time to review the study, Council will do what is best. MOTION: Vice Chair Olevson moved to recommend to City Council Alternatives: 1) Recommend that Council expand the Housing Mitigation Fee to all net new square footage of all non-residential development projects, in any zone. 2) Recommend that Council adopt a fee of $12 per square foot for office/industrial projects ($6 per square foot for first 25,000 square feet), and $6 per square foot for retail and lodging projects, both based on net increase in square footage and adjusted annually for inflation as part of the annual fee schedule adoption. 4) Recommend that Council have the new fee apply to projects where a complete planning application is submitted after the effective date of the fee. Comm. Simons seconded. The motion carried by the following vote: City of Sunnyvale Page 6 Planning Commission Meeting Minutes - Final October 27, 2014 Yes: 7 - Chair Melton Vice Chair Olevson Commissioner Durham Commissioner Harrison Commissioner Klein Commissioner Rheaume Commissioner Simons No: 0 City of Sunnyvale Page 7 Planning Commission Meeting Minutes - Final October 27, 2014 3 14-1040 Approval of a Work Plan to Achieve the 2020 Greenhouse Gas Reduction Targets in the Adopted Climate Action Plan and Budget Modification No. 22 Staff Contact: Gerri Caruso, (408) 730-7591, gcaruso@sunnyvale.ca.gov Melody Tovar, Regulatory Division Manager in the Environmental Service Department, introduced Elaine Marshall, Environmental Programs Manager for the Stormwater and Sustainability Program, and presented the staff report. Comm. Harrison and Trudi Ryan, Planning Officer, discussed the Climate Action Plan (CAP) study issues process. Staff indicated that several study issues mistakenly did not have years of planned study indicated and that the staff report to City Council would have the corrected list. Comm. Harrison confirmed with Ms. Ryan that it would not be beneficial for the Planning Commission to suggest a study issue if it is already contained within the CAP work plan, and that the supplemental checklist to determine whether a project complies with the CAP will immediately be included in the initial study checklist of the next development project that comes before the Planning Commission. Comm. Harrison and Ms. Tovar discussed the proposed change to the frequency with which the Greenhouse Gas (GHG) inventory database will be updated. Vice Chair Olevson and Ms. Tovar discussed the source of funding for CAP activities. Comm. Klein suggested adding a column to the chart that lists the source of funds and increasing the size of the chart. Comm. Rheaume discussed with staff whether funding will be sought for all activities that have not yet started and that those in progress or ongoing are currently budgeted. Comm. Rheaume and Ms. Tovar discussed the proposed budget modification and the allocation of that budget to staff. Comm. Rheaume confirmed with Ms. Ryan that items not yet started would not go to City Council for approval if no additional budget is required. Comm. Durham discussed the State cap and trade program and how it will affect individuals with Ms. Marshall. Chair Melton commented on previous discussions of time-of-sale residential energy audits, and Ms. Tovar said incentive programs are currently being explored. Chair Melton opened the public hearing and, upon seeing no speakers for this item, City of Sunnyvale Page 8 Planning Commission Meeting Minutes - Final October 27, 2014 closed the public hearing. Comm. Harrison moved to recommend to City Council Alternatives: 1) Approve the Climate Action Plan Work Plan 2020; 2) Approve the bi-annual CAP monitoring and reporting timeframe; 3) Approve the bi-annual CAP modification process; 4) Approve revised CAP action related to residential energy and water audits; and 5) Approve Budget Modification No. 22 to provide funding for the CAP tracking tool and for initial outreach for CAP implementation. Comm. Rheaume seconded. Comm. Harrison said staff in many departments have worked hard on this and that while she understands the concerns about budget, most items are already budgeted. She added that there are big items not already budgeted, but that staff is conscious about, and is making arrangements for, the cost of implementation. Comm. Rheaume said he will be supporting the motion and thanked staff for doing a great job on this proposal. He said most initiatives are already underway and funded with existing budgets and anything requiring a significant amount of money will go up against the existing budget and will go to City Council. He said he likes the revised CAP action related to residential energy and water audits, and that while he is also concerned about the budget, he is confident that big ticket items will go before City Council before moving forward. Vice Chair Olevson said he will not be supporting the motion and respectfully disagrees with his fellow Commissioners who do. He said we have a fiduciary responsibility to the residents to use their tax money wisely and that means knowing what the costs are before spending the money. He said the plan is more like a wish list and that without any clear funding mechanism we will be locking in a policy to spend money when we have priorities already identified. He said he thinks taking it out of the General Fund is inappropriate, and that while he recognizes staff is going to try to obtain grant money from the State or other sources, it is just a vague unknown. He added that individual items are very loosely budgeted and because of that and the pressure on the budget we have seen in recent years, including the reduction in City staff and services to the citizens in terms of roads, trees police and fire, he cannot recommend to City Council adopting a plan without knowing its cost. Comm. Durham said this is a pretty good document and that staff should be applauded for the time and consideration that went into it. He thanked the City of Sunnyvale Page 9 Planning Commission Meeting Minutes - Final October 27, 2014 community members and business people who provided input on the plan, and said he recognizes that Sunnyvale's contribution to greenhouse gas is small in the overall picture, but that we are in an area where we can take the lead and push for new standards. He said City Council will be mindful of taxpayer dollars and how we fund and balance those yet unfunded things. Comm. Simons said he very much supports this project and its impacts long term, but will be supporting Vice Chair Olevson's perspective with a different twist, and that Sunnvyale's process for decades has been eating the vegetables first and having long term benefits from doing the planning long term. He said he would like to have seen designating sources of funding and that there have been too many projects that, no matter how laudible, have General Fund-based sourcing. He said Sunnyvale is unique in that it does 20-year planning, and that it may be only a small portion of talked about fees, because some projects are going to be self-funded, from different budgets or from grants, but that the sustainability of this project, if it is that important, requires having that funding targeted and knowing if we are going to be cutting programs in the City upfront, or whether it will be increasing certain fees to support the base minimum amount of dollars dedicated to this project. He said he does not support the Genereal Fund funding of this long term project, and that if the sourcing was spelled out in the budget and was incorporated into the long term planning and financing he would be very supportive of this project. Comm. Klein said he will not be supporting the motion, and that the goals of the work plan are very important, but that he has similar questions about the long-term funding of this project. He said he understands what the fine print graph is trying to do by listing that grants will be sought, but he worries about the General Fund and how this is used. He said City Council utlimately decides how funds will be spent, and that when we look at projects like this we look at the fees applied and where the funding is coming from, but here we look at doing good for the environment and City but not necessarily with the appropriate fees associated. He said he is reluctantly not supporting the motion as it is the fiscally conscientious thing to do. Chair Melton said he will not be supporting the motion, and that what we are talking about is incredibly important and is the Sunnyvale way, which has been lauded for decades and has received a presidential visit. He said it does feel like there are some potentially very large items that may present difficult choices for City Council that we need to get out in front of. MOTION: Comm. Harrison moved to recommend to City Council Alternatives: 1) Approve the Climate Action Plan Work Plan 2020; 2) Approve the biennial CAP monitoring and reporting timeframe; City of Sunnyvale Page 10 Planning Commission Meeting Minutes - Final October 27, 2014 3) Approve the biennial CAP modification process; 4) Approve revised CAP action related to residential energy and water audits; and 5) Approve Budget Modification No. 22 to provide funding for the CAP tracking tool and for initial outreach for CAP implementation. Comm. Rheaume seconded. The motion failed by the following vote: Yes: 2 - Commissioner Durham Commissioner Harrison No: 5 - Chair Melton Vice Chair Olevson Commissioner Klein Commissioner Rheaume Commissioner Simons Comm. Simons said he would like to generate a motion that sends the issue back to staff to lay out a funding and long-term sustainability plan for this, including where funding comes from and whether it can be maintained without planned expenditures from the General Fund. He said we need to find sourcing for this program somewhere, whether it requires tapping into other programs or projects that will be diminished or having to deal with fees to support something with a nexus to it, and that this would be his request to staff and City Council. Ms. Tovar reiterated that not all items are proposed to be funded by the General Fund, and suggested taking the Alteratives separately. MOTION: Comm. Simons moved to recommend to City Council Alternatives: 2) Approve the biennial CAP monitoring and reporting timeframe; 3) Approve the biennial CAP modification process; and 4) Approve revised CAP action related to residential energy and water audits. Comm. Harrison seconded. Comms. Simons and Harrison had no comment on the motion. The motion carried by the following vote: Yes: 6 - Chair Melton Commissioner Durham Commissioner Harrison Commissioner Klein Commissioner Rheaume Commissioner Simons No: 1 - Vice Chair Olevson City of Sunnyvale Page 11 Planning Commission Meeting Minutes - Final October 27, 2014 Comm. Simons said that if any other Commissioner wanted to tackle Alternatives 1 and 5, he suggests sending them back to staff and to City Council to incorporate into the budgetary process to locate funding other than that of the General Fund. Vice Chair Olevson moved to recommend that City Council refer the CAP Work Plan 2020 back to staff to delineate funding sources for the next six years. Chair Melton seconded for the purposes of discussion and offered a friendly amendment to refer the CAP Work Plan 2020 back to staff to delineate funding sources and for further scrubbing of the cost entailed for each item. Vice Chair Olevson accepted. Vice Chair Olevson said this CAP could be a viable document going forward if we have a clear understanding of where the money will be coming from and where it will be going, but that it is too vague right now. Chair Melton said this is an important topic but we need to erase some important financial question marks and give staff an opportunity to provide additional clarity on magnitude items and their potential fundings sources, which would give the Commission comfort to provide a recommendation to City Council. Comm. Durham said he will be supporting the motion. Ms. Tovar asked for clarification of "delineation of funding sources," to which Vice Chair Olevson responded that it means identifying the services we would need to do without if funding comes from the General Fund or away from already budgeted activities. Ms. Ryan interjected that the budget modification discussed in the report shows that funding will come out of reserves and not the operating budget, which is not money earmarked for a particular service. She said Council will have to decide to set aside money specifically for CAP implementation and how to spend some of those reserves. Comm. Rheaume said he will be supporting the motion, and noted that he changed his vote during the first motion. He said we need to get ahead of this to avoid making difficult decisions, and thanked staff for clarifying that we would be taking from the reserve, which causes him to wonder what else we could be using that funding for. He said taking a look at having a fund on its own to support this is what we are looking for. Comm. Harrison noted that there are discretionary funds budgeted every year that City of Sunnyvale Page 12 Planning Commission Meeting Minutes - Final October 27, 2014 can be drawn on when needed, and said she is curious about whether during budget discussions in June staff will present to City Council a budget that includes money for CAP implementation on an ongoing basis. Ms. Ryan said when the CAP was presented to Council in the Spring, the Council was concerned about pre-committing to everything in the CAP, so it was organized to, on an annual basis, go to them and ask if this is year to fund it. She noted that the Planning Commission does not want to go this direction, and staff recommends that Council look at it every year when that item comes up in the queue for its schedule and in terms of the entire budget and package. She said Council's concern was that we do not know what might come up in the next six years. Comm. Harrison asked if staff knew the magnitude of the discretionary fund, to which Ms. Ryan replied that she did not. Kathryn Berry, Senior Assistant City Attorney, clarified the use of a budget modification, and Comm. Harrison confirmed that the one recommended in this report is the 22nd to be proposed during the current fiscal year. In response to Ms. Ryan's comment about funding coming out of the reserves, Vice Chair Olevson said over the next six years we are already planning on reducing the reserve account by 25% over same time period, so if we take another $30 million out of it, we effectively cut our reserve in half. He said you have to plan on the worst case analysis and he cannot see reducing the reserve by half to get started on an unknown cost structure. MOTION: Vice Chair Olevson moved to recommend that City Council refer the CAP Work Plan 2020 back to staff to delineate funding sources and the cost entailed for each item. Chair Melton seconded. The motion carried by the following vote: Yes: 5 - Chair Melton Vice Chair Olevson Commissioner Klein Commissioner Rheaume Commissioner Simons No: 2 - Commissioner Durham Commissioner Harrison City of Sunnyvale Page 13 Planning Commission Meeting Minutes - Final October 27, 2014 Chair Melton moved to recommend to City Council approval of Budget Modification No. 22. Comm. Durham seconded. Chair Melton said there has been a very robust discussion on many different fronts, and that Alternative 5 is a tactical decision within an order of magnitude that can be handled within budget. He said he wanted to be clear that discussions of the budget are not generally in the purview of the Planning Commission, but it is something presented tonight as an Alternative. Comm. Durham said we need to have the tracking tool and it seems a fairly reasonable amount. He said from the testimony of Ms. Ryan it sounds like funding is more or less covered for this. Comm. Harrison said we do not have information about what the other budget modifications since June have been, but $24,000 for computer software programs to track our greenhouse inventory to get us started on the work plan required by the State and on which our funding is contingent, seems to be a small amount compared to other expenses. She said to support staff who will write grants to gain additional funding that will benefit our citizenry and keep us in compliance with State law from which we get a great deal of money is also a small amount compared to other expenses, so she supports the motion. MOTION: Chair Melton moved to recommend to City Council Alternative 5 to approve Budget Modification No. 22. Comm. Durham seconded. The motion carried by the following vote: Yes: 5 - Chair Melton Commissioner Durham Commissioner Harrison Commissioner Klein Commissioner Rheaume No: 2 - Vice Chair Olevson Commissioner Simons NON-AGENDA ITEMS AND COMMENTS -Commissioner Comments None. City of Sunnyvale Page 14 Planning Commission Meeting Minutes - Final October 27, 2014 -Staff Comments Ms. Ryan provided an update on City staffing for the Planning Division, and noted that one of the 21 previous budget modifications was for supplemental staffing. Ms. Ryan also provided an overview of upcoming items going to, and those recently heard by, City Council. INFORMATION ONLY ITEMS None. ADJOURNMENT With no further business Chair Melton adjourned the meeting at 10:08 p.m. City of Sunnyvale Page 15