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AGENDA
CITY COUNCIL WORK SESSION
November 4, 2019
4:00 PM, City Council Chambers
130 S Galena Street, Aspen
I.WORK SESSION
I.A.Affordable Housing Fee in Lieu Rate
I.B.Budget Follow up (if needed)
I.C.Council Goals
I.D.Community Development Director Recruitment Update
1
MEMORANDUM
TO:Mayor Torre and Aspen City Council
FROM:Ben Anderson, Planner II
THROUGH:Jennifer Phelan, Interim Community Development Director
MEMO DATE:October 31, 2019
MEETING DATE:November 4, 2019; Work Session
RE:Affordable Housing Fee-in-Lieu Analysis
REQUEST OF COUNCIL:
At the work session on Monday, November 4th:
1) ComDev staff member Ben Anderson will introduce the Affordable Housing Fee-
In-Lieu Analysis and the consultant team that is working on the project.
2) The principals of the consultant team, Tyson Smith (White and Smith) and Julie
Herlands (TischlerBise) will discuss the project’s scope and process.
3) Council will have an opportunity to:
Review the proposed scope of work for the project
Ask questions of staff and the consultants
Provide additional direction to the study as it moves forward
A memo from the consultants outlining the current scope of the project is attached as
Exhibit A.
SUMMARY AND BACKGROUND:
The contract for professional services for a study related to Aspen’s Affordable Housing
FIL rates was approved by Council on August 26, 2019 in Resolution No. 90, Series of
2019. The contract was awarded to White and Smith in partnership with TischlerBise.
The proposed scope of the study can be summarized in four steps:
1) A study of Aspen’s current methodology for FIL calculations and regular updates
to the fees. This includes a case study of other affordable housing impact fees in
comparable communities and an analysis of potential alternatives.
2) An analysis of the role of the FIL in the effectiveness of Aspen’s Affordable
Housing Credit program.
2
3) A legal sufficiency evaluation of the land use code regulations related to FIL.
4) Recommendations for potential changes to policies and methodologies related
to the FIL and the intersection with the AH credits program.
On November 4th and 5th, In addition to the work session with Council, Mr. Smith and Ms.
Herlands will be holding a series of discussions with city staff and members of the
development community to better understand Aspen’s system and the local context and
challenges related to the development of affordable housing. Specifically, they will be
meeting those involved in recent public and private affordable housing developments,
including developers who have developed and/or are pursuing projects that are
generating Affordable Housing Credits.
It is anticipated that the study will be completed, and Council will be asked to consider
recommendations from the study in early 2020.
DISCUSSION:N/A
FINANCIAL IMPACTS:N/A
ENVIRONMENTAL IMPACTS: N/A
ALTERNATIVES:N/A
RECOMMENDATIONS:N/A
CITY MANAGER COMMENTS:
EXHIBIT A: Project Assessment Memorandum
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City of Aspen Affordable Housing Fee-in-Lieu Analysis
Task 1B: Project Assessment Memorandum
White & Smith, LLC | www.planningandlaw.com 1
Memorandum
To: Ben Anderson, Planner
Jim True, City Attorney
From: Tyson Smith, Esq., AICP
Julie Herlands, AICP
Date: October 15, 2019
Re: City of Aspen Affordable Housing Fee-in-Lieu Analysis
Task 1B: Project Assessment Memorandum
Based on our review of the background materials provided to us and our calls with you and the City’s
Affordable Housing Program Manager, we have identified here the methodological and legal areas of the
program to be addressed during the Affordable Housing Fee-in-Lieu Analysis currently underway. As we
have noted, while the Program includes many components, this Assessment is limited to an evaluation and
recommendations of a discrete set of methodology and legal issues. Summarized, the Analysis will evaluate:
1. Whether the current methodology for calculating the fee-in-lieu adequately captures the cost impact
to provide affordable housing generated from private development.
2. Whether the cost component in the fee-in-lieu calculation should be adjusted (construction, land, soft
costs).
3. Whether an alternative methodology for calculating the annual fee adjustment, authorized by Section
26.470.050.E. of the Aspen Land Use Code, may more accurately reflect increases in construction
costs in the area.
4. Whether the current fee-in-lieu amount incentivizes the market sufficiently to sustain the Affordable
Housing Credit System; namely, whether the fee-in-lieu is at a value sufficient to promote the
construction of affordable housing by the private sector under the current credit system framework.
Namely, with the credit value benchmarked to the fee-in-lieu amount, the concern is that the current
fee-in-lieu amount is lower than actual costs to deliver affordable housing units.
We are addressing these issues through legal research, a technical evaluation of the City’s existing
methodology, and research of other fee-in-lieu programs addressing issues similar to those discussed in this
memorandum. In addition, we are conducting a series of focus group sessions with local staff and
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City of Aspen Affordable Housing Fee-in-Lieu Analysis
Task 1B: Project Assessment Memorandum
White & Smith, LLC | www.planningandlaw.com 2
stakeholders in the Aspen/Pitkin County region on November 4 and 5. During that same visit, we also will
hold a workshop with the City Council to present the scope of issues being addressed and gain the benefit of
the Council’s early input, before we prepare the Task 2 draft Assessment and Recommendations Report.
This memorandum is divided into three sections:
1. Issues to be addressed related to the calculation of affordable housing fees-in-lieu;
2. Legal questions to be addressed in the Report; and
3. A brief discussion of the Jurisdictional Review and Report to be completed under Task 2A.
Methodology
First, the draft Task 2 Analysis Report will include a summary of findings along with recommended options
for potential modifications to the current fee-in-lieu calculation methodology. While the Report will not
include an update to the fee-in-lieu calculation, it will provide a roadmap to update the program, which is a
supplemental task (Task 4). It is anticipated there will be policy choices for further discussion and decision
that may, in turn, influence changes to the program.
Second, the Report will include recommended options for methodologies for annual updates to the Program.
Potential criteria to be explored are ease of use, cost, geographic applicability, volatility, and consistency with
potential methodological recommendations. Recommendations related to annual updates may take the form
of inflationary indices, proprietary data (available by paid subscription), model creation/implementation, or
local data collection.
The recommendation section of the Final Report (Task 3) may include a comparison matrix for both
methodology and update options, using criteria identified and refined during Tasks 1 and 2.
Each of the issues related to the fee-in-lieu methodology, summarized on page 1, is described in more detail in
this section.
Whether the current methodology for calculating the fee-in-line adequately captures the cost impact to
provide affordable housing generated from private development.
The City’s current fee-in-lieu was calculated as the difference between total development costs to construct an
affordable housing unit and the deed-restricted sale price of the unit. The difference is the subsidy amount
and is expressed as the subsidy amount per FTE (full-time-equivalent employee).
The Growth Management Quota System (GMQS) chapter of the City of Aspen Land Use Code describes the
methodology and assumptions on which the fee is calculated:
The subsidy per FTE was calculated by subtracting unit sales revenue per FTE from the total development costs
per FTE. Total development cost per FTE was determined by using an average of recent City of Aspen projects
and foreseeable future City of Aspen projects for which land has already been acquired and program/density has
been deliberated, where in each case actual land costs were used in the calculation. The Program/Density
projections for future projects were based upon assumptions suitable for the respective neighborhood, public
outreach, and program/density review by City Council. Development cost calculations included all “hard” and
“soft” costs associated with development. (Sec. 26.470.050 [E]).
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City of Aspen Affordable Housing Fee-in-Lieu Analysis
Task 1B: Project Assessment Memorandum
White & Smith, LLC | www.planningandlaw.com 3
The current methodology originated with a 2012 study by RRC/Rees that identified several calculation
options.1 The calculation options were further refined and modified over subsequent years by City staff until
the above approach was adopted by City Council in 2015.
Key issues surrounding the current methodology are:
a. Does the current methodology adequately capture the cost impact to provide affordable housing
generated from private development?
b. Should there be adjustments to the approaches for the cost component in the calculation (construction,
land, soft costs)?
c. Does the fee-in-lieu amount incentivize the market sufficiently to sustain the Affordable Housing
Credit System; namely, is the fee at a sufficient value that promotes the construction of affordable
housing?
Whether the cost component in the fee-in-lieu calculation should be adjusted (construction, land, soft costs).
We will explore recent Affordable Housing projects developed by both the City and private developers. One
key objective for this item is an understanding of actual costs (by component parts) for development projects
including land acquisition, construction costs, and soft costs. This is both to understand how actual
development costs relate to the current fee structure (reflective of the cost assumptions on which the fees are
based) and, to the extent possible, to understand changes over time compared to the annual escalator
approach.
Whether an alternative methodology for calculating the annual fee adjustment, authorized by Section
26.470.050.E. of the Aspen Land Use Code, may more accurately reflect increases in construction costs in the
area.
The 2015 adopted methodology recommended annual updates using a cost index tracked by the Engineering
News Record (ENR).2 This is a cost index tied specifically to construction (as opposed to one tied to general
inflation, such as the Consumer Price Index (CPI)), which can be obtained for geographic regions; however,
with the geographic regions typically limited to metropolitan areas.
The main concerns regarding this index include:
a. Does the current index capture the true cost changes of the residential market on an annual/regular
basis?
b. Is use of an index sufficiently user-friendly?
c. Is the data that is available by standard geographies reasonably reflective of conditions in the Aspen
market?
1 RRC Associates, Inc. and Rees Consulting, Inc., “Affordable Housing Fee Methodology, City of Aspen/Pitkin
County/APCHA,” December 2012.
2 “The Fee-In-Lieu rates shall be updated every five years and adopted by city council ordinance. During intermediate
years, The City may choose to update the fee-in-lieu schedule, by ordinance, based on the change in the engineering
news record inflation index.” ((Sec. 26.470.050 [E]) 6
City of Aspen Affordable Housing Fee-in-Lieu Analysis
Task 1B: Project Assessment Memorandum
White & Smith, LLC | www.planningandlaw.com 4
d. Relative to cost differentials and annual increases, does the delineation of the seven Affordable
Housing Categories continue to be appropriate for the City of Aspen?
Whether the current fee-in-lieu amount incentivizes the market sufficiently to sustain the Affordable
Housing Credit System; namely, whether the fee-in-lieu amount is reflective of the actual cost to deliver
affordable housing by the private sector.
The City of Aspen has an Affordable Housing Credit Program in place as one of its preferred mitigation
methods. Per the APCHA Guidelines:
The APCHA Board has prioritized affordable housing mitigation options available to private sector property
developers in the following order:
1. On-site deed-restricted housing units constructed or converted next to or attached to the proposed
development.
2. Off-site deed-restricted housing units constructed or converted at a separate location within the Aspen core
subject to approval by APCHA. A single off-site deed-restricted unit in an otherwise free-market housing
complex shall not be approved.
3. Use of the Affordable Housing Credit Program.
4. APCHA approved buy-down units.
5. Payment-in-lieu to the city or payment of an Impact Fee to the county; or Land-in-lieu by conveyance of
vacant property to the city or APCHA, permitted on a case-by-case basis.3
The Affordable Housing Credit Program allows the City to issue credits to private developers of affordable
units, based on the number of FTEs housed by the units they construct. The developer can then sell those
credits to developers of market rate housing or commercial floor area, to mitigate the demand for affordable
housing needs that their projects have created.
Issues and possible modifications identified by the City and stakeholders related to the current program
include:
1. Fee-in-Lieu as the method/value to determine the difference (i.e., “giving change”) between
categories of Affordable Housing certificates (e.g., converting Category 2 to Category 4 credits).
2. Similarly, the relationship of Fee-in-Lieu to the APCHA housing unit Category system is anticipated
to be an additional topic for investigation. Namely, the City is interested in further investigating the
need to differentiate impact (and therefore fees) by category of unit (Categories 1-7) as well as the use
of the housing unit categories as a mechanism to transition between category of credit and mitigation
requirements.
The above items are anticipated to be considered in the Phase I study. It should also be noted that
two components of the current fee-in-lieu formula: (1) employee generation rates (number of FTEs
3 APCHA, “Current Employee Housing Guidelines,” p. 14; available at
https://www.apcha.org/DocumentCenter/View/1225 7
City of Aspen Affordable Housing Fee-in-Lieu Analysis
Task 1B: Project Assessment Memorandum
White & Smith, LLC | www.planningandlaw.com 5
generated per residential housing unit and per nonresidential floor area) and (2) mitigation rates (30
percent for residential and 65 percent for nonresidential) are not anticipated to analyzed as part of
this analysis. However, it is acknowledged that these two components are key parts of the fee-in-lieu
formula and adjustments to either would affect the fee-in-lieu amount.
Legal Issues
On the legal front, in coordination with the City Attorney’s office, we will evaluate the legal and
procedural aspects of the current fee-in-lieu program, as well as any recommended revisions thereto,
including the three specific areas discussed below. The results of these legal analyses will inform
any recommendations for Task 4, updates to the fee-in-lieu program, or confirm the current
approach. In addition, we will confirm or recommend policy changes regarding nexus and
proportionality under the current program.
The effectiveness of the fee-in-lieu option as a housing production component of the City’s current
program and the legal issues surrounding its availability as a compliance option.
From a policy and implementation point of view, the option to use the fee-in-lieu to meet mitigation
requirements – either by-right or with City Council approval – has served a useful purpose. One, it
has resulted in a revenue stream for the production of affordable housing. Two, it helps address the
practical challenge of meeting “fractional” mitigation obligations. On the other hand, use of this
option may not result in the production of affordable housing as directly and timely as actual
construction on-site. Therefore, in order to confirm the most effective means of doing so, we will
consider the legal aspects of this component of the program.
Legal issues related to mandatory thresholds for providing housing instead of fees-in-lieu,
including the impact of such thresholds on housing production and availability.
Similarly, we will evaluate the legal aspects of the current and alternative thresholds for the
availability of the fee-in-lieu option for meeting housing mitigation requirements. Currently, the
option is available by-right if the total mitigation requirement for a project is less than .1 FTEs.
Otherwise, City Council approval is required, pursuant to Section 26.470.110.C of the Land Use Code.
In order to fully inform any recommended changes in Task 4 we will identify any statutory or case
law that informs consideration of changes to these thresholds, if any.
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City of Aspen Affordable Housing Fee-in-Lieu Analysis
Task 1B: Project Assessment Memorandum
White & Smith, LLC | www.planningandlaw.com 6
The implications of mandatory thresholds on the City’s housing credit program, taking into
consideration the current inventory of credits and recent annual trends.
In order to evaluate the relationship between the fee-in-lieu thresholds and the associated credit
program for purposes of policy recommendations, we will research and make recommendations
regarding state statutes or case law relevant to these thresholds and the credit inventory.
Jurisdictional Review
Aspen/Pitkin County is not alone in addressing the provision of affordable housing and
implementing mitigation programs that connect the impact/demand from private development to
the need for additional affordable housing. Common approaches include: inclusionary zoning,
affordable housing impact fees, excise taxes, linkage fees on nonresidential development, and direct
construction of affordable units.
The City of Aspen is interested in exploring programs from other jurisdictions to both benchmark
the current Aspen system as well as obtain further insight into current practices in other
communities. Five case studies will be pursued (with the potential for supplemental information
gleaned from other jurisdictions).
Our working set of criteria by which to select case study examples (after discussion with City staff)
are as follows, which may be further refined after stakeholder meetings:
1. Current fee amounts comparable to City of Aspen
2. Use of different/alternative methodologies to derive fees
3. Use of different/alternative annual update methodologies
4. Similar type of location (e.g., another Colorado mountain town)
Possible case study options include (but not limited to):
1. Palo Alto, CA
2. San Francisco, CA
3. Pasadena, CA
4. Santa Barbara, CA
5. Vail, CO
6. San Jose, CA
7. Los Angeles, CA
8. Boulder, CO
9. Denver, CO
10. Boston, MA
11. Santa Monica, CA
12. Seattle, WA
13. Portland, OR
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1
MEMORANDUM
TO:Mayor and Council
FROM:Raquel Flinker, Project Manager
THROUGH:Sara Ott, City Manager
DATE of MEMO:October 30, 2019
MEETING DATE:November 4, 2019
RE:Revised 2019/2020 City Council Goals
REQUEST OF COUNCIL:
Provide input on the revised 2019/2020 City Council Goals and the Draft Resolution 123. Staff
will incorporate feedback and return to Council on November 12th with a resolution for final
approval.
After Council’s direction, a work session dedicated to defining a work plan and tasks for each
goal will be scheduled.
BACKGROUND:
During the November 7th Work Session, we received feedback from Council on the draft Council
Goals. The Goals have been revised accordingly.
STAFF RECOMMENDATION:
Staff welcomes feedback on the revised 2019/2020 City Council Goals as well as the Draft
Resolution 123.
EXHIBITS:
Attachment A – 2019/2020 City Council Draft Goals – Redline
Attachment B – 2019/2020 City Council Draft Goals – Clean copy
Attachment C – Draft Resolution 123
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October 29September 30, 2019 1
2019/2020 City Council Draft Goals
1. Increase Leverage the City’s resources for affordable housing development funds to
finance affordable housing projectsby leveraging existing funds in tandem with
partnering with regional entities.
Lead: Pete Strecker & Scott Miller
2. Review adopted regulations that affect the development of affordable housing
including a study of the affordable housing fee-in-lieu rate, the Certificate of
Affordable Housing Credit program, employee generation and mitigation rates, and
multi-family replacement requirements.
Lead: Jennifer Phelan
3. Establish and utilize a financial advisory board to advise, evaluate, and make
recommendations on the long-term economic stability of affordable housing
development.
Lead: Pete Strecker
4. Work with partner agencies and home owners associations to formulate options to
address delayed affordable housing maintenance, including insufficient capital
reserves policies.
Lead: Scott Miller & Sara Ott
5. Evaluate decision making authority for quasi-judicial boards and commissions in
affordable housing related matters.
Lead: TBD
6. Develop a long-range community waste management plan to reduce waste in the
highest impact landfill diversion areas.
Lead: CJ Oliver & Liz Chapman
7. Identify and implement capital funding sources to address and expand the aging
stormwater system as well as finance projects focused on treating outfalls to the
Roaring Fork River that protect and improve river health and the stormwater
system.
Lead: Trish Aragon & Pete Strecker
11
September 30October 29, 2019 2
8. Reduce the energy use in commercial and multi-family buildings through increased
incentives and the codification of Building IQ, which requires energy use tracking
and improved energy efficiency.
Lead: Mike Metheny & Ashley Perl
9. Create and implement a community engagement strategy that incorporates
participation data to inform and increase future public participation in policy
decisions.
Lead: Tracy Trulove & Alissa Farrell
10. Engage with the business community and local stakeholders on ways to finance and
expand child care availability and create workforce development opportunities.
Lead: Shirley Ritter
11. Analyze opportunities to retain and attract essential, small, local and unique
businesses to provide a balanced, diverse and vital use mix supporting the
community.
Lead: Community Development Director & Mitch Osur
12. Assess the changing landscape of internet retailers and sales tax remittance at the
local level and recommend any necessary steps to ensure proper tax collections.
Lead: Jennifer Walker
13. Implement tools to identify the non-traditional short-term rental offerings within
the City of Aspen and actively engage owners to register as a business and remit
appropriate lodging taxes.
Lead: Pete Strecker
12
October 29, 2019 1
2019/2020 City Council Draft Goals
1. Increase the City’s resources for affordable housing development by leveraging
existing funds in tandem with partnering with regional entities.
Lead: Pete Strecker & Scott Miller
2. Review adopted regulations that affect the development of affordable housing
including a study of the affordable housing fee-in-lieu rate, the Certificate of
Affordable Housing Credit program, employee generation and mitigation rates, and
multi-family replacement requirements.
Lead: Jennifer Phelan
3. Establish and utilize a financial advisory board to advise, evaluate, and make
recommendations on the long-term economic stability of affordable housing
development.
Lead: Pete Strecker
4. Work with partner agencies and home owners associations to formulate options to
address delayed affordable housing maintenance, including insufficient capital
reserves policies.
Lead: Scott Miller & Sara Ott
5. Evaluate decision making authority for quasi-judicial boards and commissions.
Lead: TBD
6. Develop a long-range community waste management plan to reduce waste in the
highest impact landfill diversion areas.
Lead: CJ Oliver & Liz Chapman
7. Identify and implement capital funding sources to address and expand the aging
stormwater system as well as finance projects focused on treating outfalls to the
Roaring Fork River.
Lead: Trish Aragon & Pete Strecker
8. Reduce the energy use in commercial and multi-family buildings through increased
incentives and the codification of Building IQ, which requires energy use tracking
and improved energy efficiency.
Lead: Mike Metheny & Ashley Perl
13
October 29, 2019 2
9. Create and implement a community engagement strategy that incorporates
participation data to inform and increase future public participation in policy
decisions.
Lead: Tracy Trulove & Alissa Farrell
10. Engage with the business community and local stakeholders on ways to finance and
expand child care availability and create workforce development opportunities.
Lead: Shirley Ritter
11. Analyze opportunities to retain and attract essential, small, local and unique
businesses to provide a balanced, diverse and vital use mix supporting the
community.
Lead: Community Development Director & Mitch Osur
12. Assess the changing landscape of internet retailers and sales tax remittance at the
local level and recommend any necessary steps to ensure proper tax collections.
Lead: Jennifer Walker
13. Implement tools to identify the non-traditional short-term rental offerings within
the City of Aspen and actively engage owners to register as a business and remit
appropriate lodging taxes.
Lead: Pete Strecker
14
RESOLUTION # 123
(Series of 2019)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ASPEN,
COLORADO, ADOPTING THE 2019-2020 CITY COUNCIL GOALS
WHEREAS, the 2019-2020 City Council Goals is attached hereto as
Attachment “A”;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF
THE CITY OF ASPEN, COLORADO,
That the City Council of the City of Aspen hereby adopts the 2019-2020
City Council Goals, a copy of which is annexed hereto and incorporated herein,
and does hereby authorize the City Manager to pursue said Goals.
INTRODUCED, READ AND ADOPTED by the City Council of the City of
Aspen on the 12th day of November 2019.
Torre, Mayor
I, Linda Manning, duly appointed and acting City Clerk do certify that the
foregoing is a true and accurate copy of that resolution adopted by the City Council
of the City of Aspen, Colorado, at a meeting held, November 12, 2019.
Linda Manning, City Clerk
15
MEMORANDUM
TO:Aspen Mayor and City Council
FROM:Sara Ott, City Manager
Courtney DeVito, Interim Deputy Human Resources Director
MEMO DATE:October 31, 2019
MEETING DATE:November 4, 2019
RE:Community Development Director Recruitment Update and Input
SUMMARY AND BACKGROUND: City staff are advancing the recruitment search for
the City’s next community development director with the assistance of a recruitment firm.
As part of this process, the assigned recruiter has taken input from the community at
large, staff and the city manager to develop the recruitment strategy and advertising
collateral. You can find the recruitment brochure here.
Shortly, a staff team will be working with the recruiter to narrow the candidate pool for
semi-final and final interviews.
In preparation for the next steps, I am requesting a brief Council discussion on desired
qualities and competencies in the next community development director. Your input as a
stakeholder group will assist in this decision-making process.
DISCUSSION:There are several considerations in identifying the best suited candidate
for this position. The Council may wish to use the following questions as prompts to
providing input.
1. What skills and leadership attributes does the Community Development Director
need in order to be successful in this role?
2. In your opinion, what background, experience, or knowledge does the next
Community Development Director need to have?
3. What are the top 2-3 projects or priorities you feel the Community Development
Director will need to tackle once hired?
4. From the Council’s perspective, what do you feel the city manager should
consider when selecting the next Community Development Director?
5. What do you feel the next Community Development Director, or a finalist, needs
to know about the Aspen community and our organization?
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The onsite interview process for finalists will include interaction with the general public,
staff, community tour and interviews. Council members are welcome to attend the public
interaction session. The specific dates, time and format are not yet announced.
After a candidate is selected and offered the position, City Council will be asked to
consider ratifying the city manager’s selection as required by section 6.11 of the City
Charter.
FINANCIAL IMPACTS: none
ENVIRONMENTAL IMPACTS: none
ALTERNATIVES:n/a
RECOMMENDATIONS:Staff appreciates Council’s input on the desired qualities in the
next community development director.
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