Folsom City Council Meeting 12-09-2025

without admission of any fault. >> thank you very much. We will adjourn the special meeting and call to order the regular meeting a little early tonight for tuesday, DECEMBER 9, 2025. >> leery >>, raithel, rohrbough, kozlowski and aquino. >> here. >> if you'd all please rise and join me in the pledge of allegiance. >> I pledge allegiance to the flag of the united states of america and to the republic for which it stands, one nation under GOD, indivisible, with liberty and justice for all. >> MR. City attorney, any agenda updates? >> good evening, MADAM Mayor. Additional information transmittal for items 5, 16, and 17. A copy has been previously provided to you and they are also available on the table in the back. >> okay, great. That takes us to business from the floor. This is the public's opportunity to address the council on items not on the agenda. Please remember we are not allowed to take action or deliberate on items not on the agenda, but we're happy to hear your comments. If you would like to speak at this time or on any item on the agenda, please fill out a blue speaker card on the back table and we will call you up at the appropriate time. We do have a very, very long meeting ahead of us, so please respect the three-minute time limit. Any requests to speak? >> we do have one request to speak this evening from gary. >> hi, good evening. Hello, honorable city council members. I'm here to speak to you about the city doing a transient occupancy tax rather than a tourism business improvement business tax. My name is gary, I'm a cpa and I was an officer for the no on g fight against the sales tax increase measure. Before you hold all of that against me, I sure wish I'd known about the increase proposal that was going to be on the last city council meeting agenda. I sure would have liked to partner with the person that spoke in opposition to the tbid increase in the last meeting, that being MR. Finnegan, also a cpa. How ironic. And he was a supporter of yes on g. Here's a few points on why an assessment is better. It's not paid by the residents of folsom. It generates direct revenue to offset the projected budget deficit of the city. With the deficit of over $3 million per the last budget presentation in JUNE, a T.O.T. Could cover 40% of that shortfall. People seem to say that a T.O.T. Increase in small, but it wouldn't have a small impact on reducing the city's budget deficit. A T.O.T. Is not a special money interest grab. A tbid is. A tot is a city revenue that goes to the general fund for broad-based use and can be focused where needed from year to yore year to by the city rather than city. Any use the special district would propose the city can already also do with a tot increase. Tot funds are directly city controlled and don't have to be negotiated for use. A vote on a tot increase would pass in a landslide on a ballot, as it has in every other jurisdiction that votes on one. It's an easy sell to the public. We pay it in every other city that our folsom residents visit a hotel in. High not the folsom tbid rate is already on par with other local jurisdictions. The tot is not. This folsom tot hasn't been raised in over 40 years and is significantly lower than the other jurisdictions in the area and in the state. If a tbid is increased, the city is tying its hands as overall hotel tax will have already been raised to similar levels as other local cities. Thus from a market perspective, the city won't be able to seek a tot as a source of general fund revenue for the city. >> gary, I need you to wrap it up, please. >> I request that you table and withdraw the intent to move forward on a tbid increase and prepare a report for a tot increase. >> by the way, you said you weren't aware it was on the agenda. Do you get the city clerk's e-mails? >> I haven't signed up for that, but I looked occasionally, but I was out of town. >> I'm going to reach out to you and get your e-mail. >> thank you very much. >> excuse me, mayor, do you mind if I comment on that? >> sure. >> I really appreciate the comments shared about the tot versus the tbid. One of the things considered from a staff perspective, there are pros and cons related to either of those situations, but what we did look at is the timing of this. So if this was an inperpetuity increase, I think staff would have had more of a pause in considering this option, but the fact that it's going in alignment with the current tbid term that the council would have another bite at the apple in a few years when that expires. Stacey, do you remember, is it 2032? I can't remember. >> gosh, that sounds right, but I'm not -- >> so in some sense, it would give us time over the next few years if this were to move forward, we would -- the council would have the opportunity to revisit that. so anyway, but I would also welcome the opportunity to meet with you to kind of share more background and learn more about what you're sharing. >> thank you. >> all righty, thank you very much. That takes us to our consent calendar. Is there anything that anybody wants to pull, any requests to speak from anyone? >> no requests from the public to speak on consent items. >> was there anything anybody wanted to pull? >> I'll move the consent calendar in total. >> second. >> we have a motion and a second. >> leery >> raithel, rohrbough, kozlowski, and aquino? >> yes. >> thank you very much. >> your first public hearing is ordinance number 1359. Ordinance amending sections of chapter 17 regarding inclusionary housing for calculating inlieu fees applicable to residential development and to incorporate non-substantive cleanup in determining the project is exempt from ceqa. This will be introduction and first reading of the ordinance. >> thank you, good evening, desmond. I'm going to ask my colleagues if we can all maybe agree tonight to do our best to hold our questions until the end of every presentation just so we can get through this large agenda as expeditiously as possible. take it away, desmond. >> mayor aquino, member of the city council, I'm the planning manager in the community development department. I'm here before you tonight to talk about proposed changes to the inclusionary housing ordinance and the inclusionary housing in lieu fee study prepared by economic and planning systems for the city. Amy la pin, who is the senior principal with economic and planning systems is here tonight and will be joining me in this presentation. In terms of the presentation, we're going to talk about the overall project context, why we opted to do a fee methodology for the key findings and results from that as well as some alternative approaches that were considered based on feedback that we received. And then next steps and staff's recommendations. So in terms of the context, the city's housing required us in program h9 to update our inclusionary ordinance. Essentially to do a study of our inclusionary housing fees to evaluate the fee levels, look at funding gaps and improve our overall in lieu fee methodology. So as I mentioned, we hired economic and planning systems to do a comprehensive study of the ordinance and our fees. One of the main drivers behind this was the significant amount of staff time that goes into calculating the inlieu fees. They're based on 1% of the sales price. Now, one would think that's fairly straightforward, but the reality is when folks pull their building permits, developers often don't yet know the price of the homes, because they're just about to start construction on their model homes. So as a result, we have to get a market study. We have to evaluate that market study, make sure that the prices are consistent with what they should be for our area. And then we have to manually enter those fees into each building permit, because they vary by subdivision. In addition, we have to annually check those fees every JANUARY to make sure -- the sales prices every JANUARY -- to make sure they haven't gone up or down by more than 10% resulting in a change to the inclusionary fee. Right now, we currently have about 75 different inclusionary fees depending on -- covering all the different subdivisions throughout the city. So the proposed in-lieu fee methodology uses a nexus study. We're not required to do a nexus study. Those are for impact fees. This is what's called an in-lieu fee, you're paying this fee in lieu of actually constructing the affordable and deed-restricted homes. But it gives us a much stronger legal standing if we can point to a nexus study that we've done that analysis. This approach simplifies significantly the administrative work that staff has to do, because it bases it on a per square foot -- it sets the fee on a per square square foot basis. And again, we're not proposing to significantly change the fee, but really to reduce the administrative burden and we'll talk about how that fee is calculated in just a few moments. We're also proposing some amendments to title xvii specifically related to the inclusionary housing ordinance to remove outdated references. References to our redevelopment agency, for example, to improve clarity and administrative consistency and then make sure that it's up to date with state law, because we reference density bonus and density bonus law has changed. So again, the idea here is to make this simplified for staff and the development community because they will know going into this exactly what their fee would be prior to even submitting for a building permit. So it provides that kind of up-front clarity. And then we're proposing to have it adjust with the market based on the construction cost index. If the construction costs increase, which means it's going to be more expensive for us to help do gap financing on an affordable project, then the fee goes up. If construction costs go down, then the fee goes down. We did a significant amount of public outreach on this effort. We had a workshop with the planning commission on SEPTEMBER 17th, 2025. We also, of course, went back to them and they made a unanimous recommendation to recommending approval of this. we also sent out hundreds of emails to folsom developers, residents, and businesses. We had three different separate meetings with the north state building industry association or bia and two meetings and offered a third with the sacramento housing alliance and legal services of northern california. And then we've put all this information up on a dedicated web page on the city's website. So I'm going to turn it over to amy and she's going to walk you through how the results of the study and how the fee levels are calculated. Amy? >> good evening, amy. >> thank you, desmond. Good evening, mayor, council members. My name is amy lapin and I'm a principal with economic and planning systems based out of sacramento. So tonight I'm going to walk through the methodology and key findings related to the recommended update to the city's inclusionary housing in-lieu fee. The purpose of this effort was to streamline the city's fee structure, improve transparency and consistency, and create a more predictive, easier to administer system that aligns with the city's long-term affordable housing goals. So the methodology does follow a nexus-based assembly bill ab 1600, development impact fee methodology, as desmond mentioned, to provide a stronger legal backing to the fee structure. There are three distinct steps. The first being to determine the affordability gap, quantifying affordability gaps or the difference between the costs to develop affordable units and what income-qualified households can support. The second step is to estimate worker households generated by new market-rate units spending based on consumer spending patterns and employment patterns. And three, combining these factors to calculate the maximum legally justifiable fee for each identified housing prototype. So I'm going to dive in a little bit, and we'll be available after the presentation to answer more detailed questions. So for the study, we developed cost estimates for four representative prototypes active in folsom today. Low and medium density single family homes, attached ownership products such as condos and townhomes, and multi-family rental apartments. For each, we estimated development costs and compared them to what very low, low, and moderate income households can afford under each cd or the department of housing and community development and hud or the department of housing and urban development guidelines. Across all prototypes, affordable purchase prices or rents fell significantly below development costs establishing substantial affordability gaps. And those are shown here on this slide. You can see the gaps between the supportable unit value for each of the four prototypes and the development costs under the income household income standards for sacramento county, under the very low, low, and moderate income categories. The next step is to determine affordable housing demand. This step estimates the number of income eligible worker households associated with a new development, so new residents support local employment in retail, services, restaurants, health care, and other industries. Many of these workers fall into the income categories identified by affordable housing programs. By linking typical household spending to local job creation, the analysis quantifies the number of very low to moderate income worker households attributable to each of the four housing prototypes and this forms the demand side of the nexus equation. So this next slide provides a walk-through between what the average sales price is, the household income required to purchase that, and then based on spending patterns and employment patterns, how many total worker households are generated per 100 market-rate units. And then those are then distributed by income category. Based on typical wage structures. So then the final step is combining the affordability gaps from step one with the number of worker households from step two to compute the maximum supportive in-lieu fee. We calculated the total subsidy required to support affordable units needed for each prototype and then divided by the average prototype square footage to yield a maximum per square foot fee. And this slide shows the existing example, because the existing in-lieu fee is not calculated on a per square foot basis as desmond discussed, so we just used an example and calculated the per unit and per square foot basis for each of the four prototypes. The updated maximum, which you can see is extremely high, both on a per square foot basis and if we were to translate that into a per unit example. And then our recommended, updated in-lieu fee, which is about 10% or less of the maximum justifiable fee. And it equates to similar to or actually in some cases for these prototypes that we identified less than the average in-lieu fee currently being assessed by the city. So you can see for single family, low, and medium density, our recommended in-lieu fee is $3 per square foot. The multi-family attached product would be 2.50 a square foot and then you'll note that the multi-family apartments, although a maximum justifiable fee was calculated, we recommend continuation of exempting this product type as it's consistent with the current approach in the city. And I'll get to why in a second. So a large part of this study was examining financial feasibility. We wanted to make sure that we didn't inhibit the development of market-rate housing but still generated revenue for the city's affordable housing goals. So under the existing in-lieu fee, you can see that the single family low and medium density prototypes appear to be feasible. The multi-family attached, so this is a multi-family ownership product, is on the margins. It's showing as slightly negative, but that's essentially a break-even finding. And then the multi-family apartments, even without an existing in-lieu fee, so the feasibility analysis examines existing conditions which as mentioned is multi-family rental apartments that are currently exempt, so even without that, it's showing that there are some feasibility challenges. So clearly under the updated maximum in-lieu fee, every single prototype would experience feasibility challenges. So based on that and based on discussions with staff about maintaining similar fee thresholds, our recommendation is to maintain a similar fee per square foot. For the three prototypes in which the city currently applies an in-lieu fee, so the two single family ownership products and the one multi-family ownership product. And then to again retain that exemption on multi-family rental products. So you can see in the far right-hand column the feasibility findings are very similar to the feasibility findings under the existing conditions. So now I'm going to walk through some key findings and considerations. So the study's findings support a balanced approach that advances the city's housing goals while maintaining development feasibility. A major benefit of the update is reduced administrative burden, shifting to a simple per square foot fee that eliminates subdivision-specific pricing checks and creates a clearer, more predictable structure for applicants. The analysis also shows a fee can function as policy tool. We have a section in the report where we look at peer jurisdictions and I'll show you a summary of that in the next slide, but we looked in the sacramento region and then beyond the sacramento region. And in both geographic areas, we noted that several jurisdictions tailor their fees to encourage certain product types or guide development patterns. For example, santa rosa charges a lower fee for smaller units to support the production of those types of units. City of sacramento offers reduced fees in its housing incentive zone. So instead of promoting or incentivizing a specific housing type like smaller housing units, they want to incentive development in a certain area. So the city, that's something the city could consider in future iterations of this. The feasibility results, as mentioned, indicate that multi-family rental housing should remain exempt. And then indexing the updated fee to the construction cost index will help keep it aligned with construction trends as well as periodic monitoring by the city of the in-lieu fee program will help ensure that the fee continues to support policy goals without intentionally hindering market-rate development. So here is the local jurisdiction fee comparison that I was just mentioning. Compared to nearby jurisdictions, and I'll note that the first row in red is the recommended fee, so the folsom's recommended fee falls within a reasonable middle range among jurisdictions in the region. Somewhat lower than sacramento and sacramento county. And somewhat higher than rancho cordova and elk grove, although I will also note that eps is assisting elk grove in reviewing and potentially updating their existing fee. These differences reflect program design choices and local housing market conditions and folsom's structure should remain competitive in the region. And I'm happy to answer questions at the end of the presentation, thank you. I'll hand it back over to desmond. >> one thing I wanted to point out as part of amy's presentation is that while it looks like the fee is going down slightly, the difference is because we're looking at a 2600 square foot home. So the larger the home, the fee goes up. The smaller the home, the fee goes down. So we did a calculation based on the last kind of five years, and this would be -- this would result if we had the new per square feet approach in place, this would result in a slight increase in the revenue coming into the housing fund. So based on the feedback that we got from both the housing alliance, sacramento housing alliance and legal services of northern california, as well as input from the bia and the development community, we looked at a couple different approaches. Most of those were geared towards some of the issues that the bia had raised. The housing advocate's main concern was ensuring there wasn't an overall decrease in the amount collected for the city's housing fund, since they saw that as critical for gap financing. So we looked at three options. One was basically to outsource the administrative tasks but to keep everything the same. We did explore that. Unfortunately, we weren't able to find a lot of other jurisdictions that did that, nor were we able to find many consultants that were all that interested in doing that for us, given the complexity. The other option was to retain the current fee structure but collect the fees, all of the fees at the first certificate of occupancy. Everything would be due in terms of all the in-lieu fees. And then the other option, and this came from a concern about about -- the concern over home prices in that a 1500 square foot home or 3,000 square foot home is not double the price of a 1500 square foot home, so why should the fee be per square foot be doubled going from -- sorry. why the fee would increase, because in that example, $3 a square foot for a 3,000 square foot home, you're looking at $9,000 for an in-lieu fee versus a smaller home that's 1500 square feet. You'd be looking at $4,500 or less. So the concern was, well, our sales prices aren't double, so why should your in-lieu fees double. And we looked at -- so we looked at kind of doing a reverse sliding scale that would make adjustments for those larger homes. The issue that we found with that is that larger homes actually generate more in the way of the need for more low-wage jobs and more need for affordable housing, so it would actually contradict the findings that were in the study. So based on that, we ultimately decided to stick with our current approach, because it eliminates the administrative burden. It moves with the market in terms of the construction cost indexing mechanism. And it's predictable and it's something that the development community can know in advance before submitting their building permit applications. And then we have it backed by a nexus study which shores up kind of the legal standing of it and provides additional protection for the city. In terms of next steps, obviously this is before you tonight. This is the first reading. The second reading would go on JANUARY 13th. at that time, we would also bring forward a resolution setting the fees, and as you saw in the example, we would be recommending $3 a square foot for everything but homes less than 1500 square feet. Those would be charged at 2.50 a square foot. And the reason for that is based on the feedback we've gotten from council that first-time home buyers, smaller homes, and condos and townhomes, which kind of better meet the needs of first-time home buyers, would be something that we would incentivize. As amy explained, we do not -- we're not proposing to put it on to multi-family rental products because of the fact that there's almost a $40,000 gap right now between what they can get in rent and what it costs to construct those units. The reason we did propose putting it forward on multi-family attached projects like your townhomes, condos, is because the ones that are being built in the city, primarily down in the folsom plan area, are selling for a price that's only affordable to upper income households. So the folks that are earning a moderate income, around $120,000, they still cannot afford these types of homes. The max they can afford is about $400,000, but the prices we're seeing is 550 and up in the folsom plan area. So assuming that you approve this item tonight and on the 13th then, if that was the case, then this ordinance would go into effect on FEBRUARY 12th of 2026. we would, of course, communicate that out to the by a by a and bia. The recommended action is before you tonight. Myself and amy and stephanie are here to answer any questions you MAY have. Thank you. >> thank you, desmond. Questions for desmond, amy, or stephanie? Vice mayor raithel? >> yeah, I think my questions are probably for amy, but I can get started and let you guys figure that out. My first question is really the prototypes, the thousand square foot multi-family rental versus the 1500 square foot condo. And I read the report, based on what you were presenting, most of your differences come down to the size of that unit. Did those come from any averages of what we're actually building? Because I'm not sure we're building too many 1,000 square foot apartments here in folsom. >> they did. We have a list of comparable projects. I think both in folsom and maybe in the broader region. But primarily in folsom. That helped inform. And we also had multiple conversations with staff to make sure that -- and with stakeholders. We conducted our own stakeholder outreach with both market-rate and affordable developers and ran those assumptions by then as well. >> if somebody lived in a 1500 square foot rental unit or bought a 1500 square foot condo, would they need substantially different income or am I looking at a very equivalent type of person? Is there a big difference between the rental market and the for-sale market of what my disposable income is at the end of the day? Because I look at the impacts and it's like within a dollar, right? Maybe go back to that slide, because I think you're calculating the impact to not be any different. Let's go back a little further here. Maybe I'm misunderstanding what the numbers are. Let's go back a little further. >> that was it! >> oh, sorry! There was one about, like, $34 a square foot was the maximum calculated in-lieu fee. That was the impact? There it is. Is that it? Yes. So 36, multi-family attached, I'm looking at your report. I've got 34 for single family attached. That updated maximum in-lieu fee is kind of like a corollary to what the impact is, right? That's why it's much higher? >> it is, yes. >> so it's pretty similar -- it steps up for multi-family attached, but there's not a differentiation between rental here and for sale, right? >> well, you need a down payment and you need a certain monthly income in order to qualify for the owner occupied multi-family product versus the capital outlay on a monthly basis for the rental product. It's much less. >> okay, but am I reading that -- that's the m3401, is that for rental family? >> it is. >> that's for a rental family, okay. >> yes. >> and it's also for the for-sale family? That's the impact that we would expect them to have on the need for affordable housing? >> yes. And again, it's based on these three steps, which is the affordability gap for those particular prototypes and the number of workers households generated by the spending of the households in those particular prototypes. >> okay. And then the neighboring jurisdictions that we have, from what I can tell from the report, it looks like most of them are charging their square foot fee for your rental products also? >> some are, yes. But some are not. >> okay. Do we know which ones? Do we have that? The ones way outside of our area, I'm not too interested in, but the ones that are close to here, it looks like our neighboring jurisdictions are charging for a rental multi-family product. You're saying some of them are not? >> I will say folsom is one of the few that has an in-lieu fee program and when the in-lieu fee program was established, multi-family rental was not allowed to be charged. >> understood. >> the peer jurisdictions that we looked at have a development impact fee, and there was no such limitation for that, so they did adopt a fee. Some of them did adopt a fee assessed on multi-family rental products. >> okay. I think -- and these changes, one other question. These changes are not just for the folsom plan area. These changes are throughout folsom? >> yes. >> thank you. That's all my questions. >> council member kozlowski? >> yes, my question is kind of about the edge case on the requirement to charge these fees at all. I know that we have an interesting history of how we arrived here in the first place, but is there -- and I'm thinking serving at sacog that we're coming up on a cycle sooner rather than later. We have these requirements to stimulate or create the opportunity for low-income housing of various stripes but is there actually a mandate that we have an in-lieu fee program at all? And to what extent? And I know that's kind of a broad question, but I just feel like that might be an interesting underpinning for the public to understand. >> so the current inclusionary housing ordinance which includes the in-lieu fee was the result of a settlement agreement from a lawsuit back in the early 2000s that the city lost and then we were required to put that in place. >> mm-hmm. >> jurisdictions are not required to have inclusionary ordinances, but they have become, particularly with the housing element cycle, a critical tool in terms of providing gap financing on affordable projects or buying land to develop affordable housing or other things like that. It's one of the few mechanisms that we have to help support the construction of deed-restricted affordable housing in folsom. And this has become even more important with the decline in federal funding and then the limitations the state has given the state's budget problems. >> gotcha. And maybe this question is for the city attorney. Have we satisfied that settlement agreement in other respects? And is this a perpetual requirement that we will live under for all time? >> it depends on how one reads the settlement agreement. I would say it's ongoing until something changes. >> there wasn't a target number of units or conditions to reach? >> no, it was a time frame. So the city council has already satisfied the time frame requirement and the city council has continued over the years by implementing the general plan including updates to include inclusionary. For practical reasons, because it's not just the settlement agreement that's part of the consideration. It's the arena to meet the state's repeated mandates over the years. >> if we were a jurisdiction that hadn't started down this road because there had been no settlement, we in some ways wouldn't have any hook from the state to force us to -- >> we might. >> in terms of subsidizing construction rather than creating conditions? >> yes, sir. And it could actually take the money out of the general fund to help the city head off any enforcement action from the state. >> we always have the option to spend our general fund in a lot of ways. Are you saying the state would mandate that we do that? >> I'm not saying that. I'm saying the trend is concerning. The state has established -- I don't think this is recent, it's a year or two ago -- enforcement units. This is something the state is hammering local jurisdictions to make sure that we or they exert as much pressure as possible on local jurisdictions to allow affordable housing to be produced. They know and we know we do not build, but they want us to incentivize. And this is how we incentivize affordable housing construction. >> all right, I'm not sure that fully answered my question, because I'm trying to get down to the base level of if we feel like we've met the settlement agreement at some time, and we recognize that the bulk of the responsibility to the rhna process is to make sure there's land available for the type of development that's desired, is there a state mandate for us to also act as a tax collector and financier of construction on that land? >> the answer is no. But practically speaking, it's not so simple, because the pressure is from elsewhere. >> I get that. Listen, the work that was done here is excellent. I just wanted to back up a couple of steps and make sure we understand the base case for why we're doing this, thank you. >> thank you. Council member rohrbough, any questions? Can be council member leery? >> leer learly? >> leary? >> were all of those costs an average as well for the municipalities? Or is that a hard question to answer? >> so, no, it's based on the prototype, so there's the 2600 square foot prototype, and so that's why it was used. What I was trying to point out and maybe didn't do a good job of it, since we have $3 a square foot, it's not going to mean that every house pays 7800 there are in an $7,800 inan in-lieu fee. It will depend on whether it's 1600 or 3,000 square feet, so the fee level will vary based on -- so that's just a representative snapshot based on the 2600 square foot prototype. >> so homes in rancho cordova that are 2600 square feet are significantly lower fee? >> so this was from some time ago and it was negotiated and it's one specific plan. There are multiple specific plans in rancho cordova. It's the rio del oro specific plan and it was done quite some time ago, so that's the explanation for that situation. And then davis, of course, is quite the outlier here with the 21,000 square foot. >> okay. Thank you. >> thank you. This is a public hearing, so I will open the public hearing. We do have a request to speak. >> yes, from martin navinski. Martin, while you're making your way down, we have two requests from you, but both identify item 15. Did you just want to speak upon one item? >> no, two items. >> what was the other one? >> I don't remember. >> you can let me know afterwards. Thank you very much. I can call you back up again. >> thank you, mayor aquino, council members, thank you for having me tonight. I'm here to talk about the inclusionary housing ordinance. I walked in late, maybe I missed this, but the whole reason in my opinion that this is going on, I think the city has been making some fiscal policy changes recently to become more efficient to live within your means a little bit better and I think this is staff's opportunity to try to make themselves more efficient. I think the staff has done a good job explaining how burdensome it is for them to administer this program. We're part of this program, it works for us, but it is administratively burdensome for us as well. I heard desmond say it's sometimes difficult to even collect information from the builders, except for one! [Laughter] I believe you'll get reinforcement from them that there's one builder that does participate pretty well. So from a practicality standpoint, becoming more efficient is a good thing. And I think your staff has done a great job of being very transparent and doing outreach and keeping the development community informed of this process and what they're going through and listening to our concerns and everything. Basically there's three options that you have before you. Option 1, keep it the same, but outsource to some other company to administer. That's a fee increase. We pay the same amount of fee, but then we also have to pay for the outsourcing administration fee, so that increases our fees. The second option was to collect all of the money at the certificate of occupancy, the first closing, if you will, in a submission. And the reason we don't like that, if we had 100-lot subdivision and a 3,000 square foot house, that's a $9,000 per house, so you'd collect $900,000 before we closed escrow on our first home. That's fiscally very burdensome and I wouldn't come in with 100-lot subdivisions anymore. I'd come in with ten-lot subdivisions ten times in a row. And as your public works director and city engineer can attest, there's quite a bit of work that goes into a final map and that would I think increase the administrative burden on your staff again by ten-fold. So the second option doesn't really work for us either. The third option is going to a flat square foot fee of $3 per square foot and I think the city has done a really good job of trying to keep the fee about the same where it is. The city has collected quite a bit of money. We're in favor of lessening the burden on staff which helps us, it helps us for forecasting what our fee will be before we step into it. And if the city is going to consider one of the three, toll brothers would support option 3, the square foot, $3 per square foot price, and thanks for your time. >> thanks so much. Any other requests to speak? >> no further requests to speak on this item. >> then we will close the public hearing and I will entertain a motion. >> just a quick clarification. Option number three was not the staff recommendation? That was to have a caveat of changing the sliding scale for large homes? >> yes, but the recommendation before you is to go with the per square foot basis, which we expect to be about a $3 fee. >> got it, perfect. I'll kick us off. I've said it multiple times from the dais, it won't come as a surprise to any of my colleagues, I'm not in favor of these fees for for-sale condominiums and townhomes. I think we need more starter homes out there and I think although the study might show that all of these prototypes are financially kind of at the cusp, our experience has been a little bit different here in folsom. We've had a lot of units that were built here, and I understand there's a lot of moving pieces that go into these studies, but when I look at it, I think of what are we trying to incentivize? And I don't think disincentivizing or incentivizing rental units above for-sale units is what I want to see for our city. If it is a 1500 square foot attached multi-family project, whether it is a luxury apartment or whether it's a condo, I don't want to encourage that builder or that developer to make it a rental project versus making it a for-sale project. And so I'm totally fine with transitioning to a per square foot fee, but my real challenge is how do we lessen the impact. And I'm fine with them for single family homes. That's been there, we're staying within that same rate, but really that section in the middle of the multi-family projects is where I'd like to see what you guys' thoughts are on just removing the fee entirely for those tranche of projects. Or alternatively, and this is maybe a little tougher with eps' analysis, making the rental projects pay that fee. like our other neighboring jurisdictions. So my first preference would be to go with the multi-families not being charged our inclusionary housing fee and try to make some more of this naturally attainable housing attainable here in folsom. >> so you're saying that you would agree with staff's recommendation except take out the multi-family? >> so right now, they're saying $3 a square foot for single family and correct me if I'm wrong, desmond, but 3.50 per square foot. There was a little bit of discount given to the multi-family projects. We really want to incentivize more of the condo and town homoprojects to townhomeprojects to make it go forward. >> desmond or pam, do you want to respond in any way? >> yeah, so a couple things with regard to that. So as we explained with the rental product, we didn't want to put the burden on it, because it's not financially feasible with about a $40,000 gap between what they can get in rents and what they can get -- or what it actually costs to build. With the multi-family for-sale product, when we look at the townhomes and we look at the duplexes or the halfplexes that are being sold in the plan area, those are, even with the 2.50 fee per square foot fee, they are financially feasible. They're right at that break-even point as amy pointed out. And they're also selling at considerably more than what a moderate income household can afford. So that's why we elected to keep the fee in place, because they're selling for $550,000, as an example, that's considerably more than what a moderate income household can afford, which is about $415,000. So because it's yet another product that caters to higher income folks, we are able to use -- we're proposing to put that money or collect that money and put the in-lieu fee on that project, because it doesn't impact the financial viability of that project, but it does then give us money that we can then use to, whether it's buy land for affordable housing or do gap financing on affordable projects or support a project like the habitat for humanity project. So that's kind of the reasoning behind where we went with that approach. >> MADAM Mayor? >> yes. >> when I reviewed this with the staff last week, I made the suggestion, because I hadn't really thought it all the way through, and honestly, I might be chasing a product ghost a little bit, but the thing that seeps seems apparent is that nobody builds a house detached that is anything less than probably 16 or 1800 square feet nowadays. And that is not going to be affordable to the group that you're talking about. So in days gone by, there were brand-new tract homes built on small lots that were 1,000 or 1200 square feet and people grew into them and expanded them over times. That MAY not be a feasible product, but I think if we were going to put a floor where we eliminated the fee, perhaps it's just for any product that meets this moderate income price range. So if somebody does come forward with a product that they can sell at that moderate sales price, and again, it MAY never happen, but if they can hit that, let's at that point eliminate the fee on those projects. Or on that product. >> product. To help it along. If they're teetering just on the edge of doing it, maybe we can incentivize it without having to transfer the money around and track it in the same way. It might meet both of our objectives. >> that's an approach to take. I don't think these are that far out of the range of your moderate income folks, right? Maybe when we're talking about 130% of ami instead of 120% of ami, to me, why are we disincentivizing them? That's just my view on it. I don't think we need to add an extra $5,000. It looks like all the projects are marginal. I'm trying to take into account our lived experience, right? We've had a really hard time in this city building condos and townhomes. You know what we haven't had a hard time building? Luxury apartments. The eps study can say, you know, here's what the conditions are right now. That is a snapshot in time where we're living with really high interest rates and these projects are quite pricey. And they're probably, you know, suffering from this temporary period of really high interest rates. That's my guess. I don't know, I'm not the economic consultant, but that's my guess. We're just looking at a single snapshot in time and I think we're now making policy for the next five to ten years based on that little snapshot in time. >> we can debate what interest rate effect is on the price of housing in the united states. I think it's opposite of what you're suggesting. But I guess my recommendation is that -- it's based on a couple of things. I'm looking to try to incentivize people to build market-rate housing that can meet that middle that's missing. But also recognizing that the credit that we get for it in the rhna activity is different if it misses by $10,000. Right? If it actually is moderate income, we get to take credit for it. If it's moderate plus $10,000, we don't get to take credit for it. So if we can help that along, it saves us the trouble of finding other projects that do in fact meet that moderate price range. So that's my suggestion. >> would someone like to make a motion for us to consider? >> I have another question. So it seems to me that there are some things that need to be worked out here before we vote on this the way that it's set up. do staff have any ideas about how to implement what vice mayor raithel and council member kozlowski are saying? I'm having trouble putting all of those pieces together plus these three options. That have been presented into something that is workable that would incentivize people to build the smaller housing products as well. Because other areas are building them. And there's state laws that are also impacting the ability for people to build condos and attached housing for sale. So that's another piece of that puzzle that we can't solve with this. >> I do have a suggestion for making a motion on this that could serve both purposes. I'll see if you guys care to take it. So my proposal would be that we do in fact approve the staff recommendation but ask them, because we have the luxury of being able to change this again and nobody is going to complain if we reduce fees, that we ask the staff to take one more look at a floor of some sort to try and incentivize that missing middle type development that hits the rhna mark for moderate income at a later date. That would be my proposal. >> MADAM Mayor and members of the council, so what we can probably do is exactly what council member kozlowski indicated. Introduce and conduct first reading of this ordinance and direct staff to come back with a formula or some kind of exemption provision to be inserted into this new ordinance. >> at some future date. >> because you're talking about exempting certain products, so there'll be an exemption section. >> it could be exempted, but right now, staff is already recommending a lower fee for these products, right? So that's the recommendation that staff is giving. I'm just saying a 50-cent discount on a 1500 square foot, we're talking about a $750 discount on your $5,000 fee. Am I roughly in the ballpark there? So I'm saying instead of staff's recommended $750 discount to incentivize this project, we give them a $5,000 discount to incentivize that project. The other way we could look at it, what's the maximum square feet, right? My only concern around doing, hey, you're exempt up to 1500 square feet, is then we have this, like, kind of cliff, right? Whatever we calculate the moderate rate to be, all of a sudden we don't see any more 1500, 1700 square foot -- >> I'm suggesting that we tie it to sale price rather than -- so we kind of do both things. Right now, we have it tied to sale price. I'm saying for that particular product, we tie it to sale price and if a developer comes forward and can dem demonstrate they're going to meet that sale price range, that gives us credit for moderate income housing that we then provide a discount of up to 100% on the fee. >> can I make a comment in here? >> yes. >> I think it's clear that I know that sarah has also articulated this. I have as well, and you too as well, and barbara, you highlighted it. That we want to encourage condos. And I think staff knows that that's a priority of this council. So maybe coming back next time with how can we do that, how can we incentivize that, if it's tied to the fees or not. We've heard a lot about this particular agenda item or I have, I'm sure, every other council member has as well, but one of my priorities consistently since the beginning was to deliver our portion of any development process or product in a timely and obviously accurate but timely manner. Something we've talked about in the last several years. >> all right, would you like to make a motion? >> my motion is to approve the staff recommendation and to ask the staff to look at other incentives for moderate income housing that we can institute at a later date. >> I'm looking for the staff to come back with a recommendation, because as I started my comments, we MAY be chasing a ghost. Toll brothers MAY not be interested in building that particular product and it will come to nothing, but I want the staff to take a look at that. >> yeah, that would help their other developers that MAY be looking at that kind of product as well. No, I understand that and it's a real struggle, so I just want to make sure we're being fair to ourselves in terms of being able to have money to purchase land and support other projects like the habitat for humanity. >> is the intention to bring the changes back for the second reading? >> no, a later date. >> my motion is to approve the first reading, have it come back on its regular schedule so we can do the final reading and then at some point over the next few months to get a new presentation of tinkering. >> we're going to jump to new business 20, approving a minor administrative modification request from the folsom-cordova unified school district to modify the folsom plan area land using designations and residential unit allocation for designated parcels to accommodate the relocation of a planned middle school site to a location adjacent to a high school site. >> bear with me, sorry. My apologies. There's some technical difficulties with opening one of the... We're having an issue with the school district's PowerPoint. >> maybe I'll just describe it! We'll do staff's presentation and then in the meantime, I'll try and get this issue fixed. So I'll turn it over to jessica brandt, principal planner with the community development department. I'll go behind the scenes and see if I can get it fixed on my computer. >> the superintendent can present through interpretive dance! >> absolutely! >> good evening, jessica brandt with community development, and I'm here to present the request from folsom-cordova unified school districts for a minor administrative modification to the folsom plan area specific plan to relocate a planned middle school site. And as you heard, we do have a representative from folsom-cordova here. And they will have hopefully an applicant presentation as well. So folsom-cordova's request is to relocate the middle school site in the folsom plan area and that requires a change to the specific plan land use designations for the two subject sites and a transfer of development rights between the parcels. Both of which can be accommodated for a public quasi public use like this through a minor administrative modification. And so kind of to get it on record, the specific changes to the specific plan are as follows. The existing middle school site, which is about 22 acres, would be changed from public, quasi public, to single family, high density land use. The proposed middle school site, which is about 15 acres, would be changed from single family high density land use to a split of 11.75 acres of public, quasi public, and about 3.93 acres of single family high density. In addition to accommodate the request, 85 residential dwelling units that were allocated to the proposed middle school site and four residential dwelling units from another residential site would be transferred to the existing middle school site to retain consistency with land use residential density requirements and the overall unit count allowed. The folsom plan area specific plan includes policy language and criteria for considering a minor administrative modification. Just to highlight, policy 4.24 states that all public, quasi-public sites MAY be relocated or abandoned with the minor administrative modification process. The land use designation of the vacated site or sites will revert to the lowest density adjacent, and in no event shall the maximum number of plan area dwelling units allocated in the specific plan be exceeded. Section 13.3, which is administrative procedures, states that administrative modification that are consistent with and do not substantially change the overall intent of the specific plan, such as minor adjustments to land use, parcel boundaries, land use acreages MAY be approved provided seven specific criteria are met. I'm not going to go through all seven. The main one here is that the land use pattern remains consistent with the intent of the specific plan. That the backbone infrastructure network is not substantially altered and that the proposed modification doesn't increase environmental impacts beyond those identified in the plan area eir. The proposed modification also needs to offer equal or better development capacity. And then specific to this request, relocated school parcels must continue to meet standards for the type of school proposed and remain within walking distance of residents they serve. There are also additional criteria for transferring dwelling units that mirror these ones I discussed. So folsom-cordova will provide additional detail in their presentation, but this slide provides a summary of their vision for the combined campus that would result from the move of the middle school site. Their vision includes improving communication for staff, articulation of instruction across grade levels, sharing facilities that MAY not otherwise be available to middle school students, maintaining a safe and cohesive campus, and then meeting the district school to provide timely and cost-efficient school complex. Staff reviewed folsom-cordova's request and have determined that it meets all applicable plan area policies and the required and minor administrative modification findings. Briefly, the proposed relocation is consistent with plan area policies in that the middle school remains near residential neighborhoods and because folsom-cordova will provide campus facilities that meet state law, needs of plan area residents, and it will not burden folsom residents outside of the plan area financially. The relocation does not modify the general land use pattern of the specific plan and again, folsom-cordova MAY talk about this, but a combined high school/middle school campus was actually originally proposed for the folsom plan area. And so this goes back to that model. Further, folsom-cordova provided a study that demonstrated that the request would not require significant alteration to the roadway network or result in any additional significant traffic or other environmental issues. Finally, the relocated site remains within a residential area and reduces the acreage needed for the middle school from 22 acres to 12, increasing service efficiency. So with that, staff is recommending that the council move to adopt resolution number 11512 approving folsom-cordova unified school district's request to modify the land use designations and residential unit allocations for the designated parcels through a minor administrative modification to accommodate the relocation of the planned middle school site. This completes my presentation and I'm happy to answer any questions now that I've got my breath. As mentioned at the going, craig, director of facilities, finance, and planning with folsom-cordova, is also here as the applicant representative and has prepared remarks as well. >> there's a pdf issue with this thing. >> any questions for staff? >> any questions for jessica? >> super. >> good evening. I'm the executive director for the facilities development from the folsom-cordova unified school district. I apologize for that! >> new to the job! >> oh, boy, that's not a good start. We really appreciate the opportunity to come speak tonight regarding relocating this middle school site and we have a few slides here to kind of add on to what was just presented by staff. We'll be talking about the new middle school, folsom planning area and relocation of the middle school site. In this presentation, we'll be talking about the relocation need, identify the purpose, adjacent high school, middle school sites, easing the grade-level transitions as they move from sixth, seventh, and eighth into the high school. The holistic student development and then the status of the design development and moving into construction. In 2017, that's when this first started, the original school site really had some limitations with the accessibility and the topography that really made the site too expensive to explore to And based on that assessment that came back, the district had to look at splitting the sites and look at a new location for the middle school and we had the support from the land owners and the city to try and look at another location and a minor administrative modification was approved by the city for this purpose. And then in 2025, moving forward, an effort to achieve the original vision of the combined high school/middle school site, the district went back and started talking to the sty and land owners to see if there was opportunity, as we saw earlier, about combining the two sites and moving it over to have the additional 15 acres to have them on one site. So the site initial design maintains a distinct physical separation between the two campuses so even though they're combined, they're really set up to they're separated. Schools will be structured in a way there are clear lines of supervision from the principal and vice principal's offices to the respective middle school and high school campuses. The students will be housed in separate areas of the campus but still have a period of time to be sheltered from other students while transitioning into the new environment. Some of the advantages of having the adjacent high school and middle school site combined, one is cost. The cost to build a school is about $1,000 a square foot. It's really escalated and cost escalations has gone through the roof. By combining the sites having joint-use buildings really helps with the overall budget of a project of that size. It provides the students more flexibility. the younger students can take upper-level courses. Students get comfortable with their surroundings being on one campus. Better articulation between the staff and different grade levels ability to maintain connections as they move from middle school to high school and then the collaboration between the two staffs that they share the admin. Building, opportunity for them to work together and share information as the middle school students transition into the high school. Resources, by having the combined middle school and high school site, they have more access to fields and campus resources and then student safety and security is maintained in all areas of the campus. The middle school and high school students will have no common areas where they mix and very limited opportunities to interact. And they won't be unsupervised as they go throughout their day. So as we ease into the grade level transitions, each grade level transition creates exposure to and interaction with more students, different teachers and new surroundings. The goal is to streamline and ease them into the transition, to minimize anxiety and reduce isolation to the students. By fostering a more positive educational experience. Students will strive to adapt and recreate their identities in their new surroundings. There is a need to establish environment where students feel comfortable and safe. and then provide services and spaces that connect the students and engage them in the education process. So as our architects designed these campus, they really implement these talking points here into the design so students do not feel isolated and threatened if they're crossing over the campuses. So the status of the high school and middle school project, this is all dependent on the home sales and development of the build-out where we're at and funding availability. We're currently in the design development. We have completed the schematic design phase and then the proposed high school start date is in 2027, that's phase one of the high school. And then based on funding and availability of the home sales, phase one of the middle school is scheduled to start in 2029. Any questions? >> thank you, craig. I actually do have a question. If one of the advantages of doing a combined middle school/high school campus is cost savings, why does your schematic show double the athletic facilities? It seems like that is a natural area where you just have one set of athletic facilities that both schools could share? >> we've got to think about the size of the schools. >> I can answer that one. We have a single set of athletic faculties and there is almost no time where they are not in use already so having a complementary set is almost essential to run regular sports programs at the high school level nowadays. >>