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2018-03-28 Planning Board MinutesCITY OF EDMONDS PLANNING BOARD MINUTES March 28, 2018 Chair Monroe called the meeting of the Edmonds Planning Board to order at 7:00 p.m. in the Council Chambers, Public Safety Complex, 250 — 5r' Avenue North. BOARD MEMBERS PRESENT Nathan Monroe, Chair Matthew Cheung, Vice Chair Alicia Crank Daniel Robles Mike Rosen Carreen Nordling Rubenkonig Megan Livingston, Student Representative BOARD MEMBERS ABSENT Phil Lovell (excused) Todd Cloutier (excused) READING/APPROVAL OF MINUTES STAFF PRESENT Rob Chave, Planning Division Manager Jerrie Bevington, Video Recorder Karin Noyes, Recorder VICE CHAIR CHEUNG MOVED THAT THE MINUTES OF MARCH 14, 2018 BE APPROVED AS PRESENTED. BOARD MEMBER RUBENKONIG SECONDED THE MOTION, WHICH CARRIED UNANIMOUSLY. ANNOUNCEMENT OF AGENDA The agenda was accepted as presented. AUDIENCE COMMENTS There was no one in the audience. DEVELOPMENT SERVICES DIRECTOR REPORT TO PLANNING BOARD Chair Monroe referred to the written Development Services Director Report, but there were no comments. UPDATE ON DEVELOPMENT OF HOUSING STRATEGY Director Hope said she was present to report on the status of the Housing Strategy and accept comments and questions from the Planning Board. She emphasized that the project is still in the preliminary stage and public outreach is very important. There will be numerous opportunities for public involvement as the project moves forward, and valuable information about the project can be accessed at www.edmondshousin ste rategy.org. She reminded the Board that the Comprehensive Plan calls for developing a Housing Strategy by 2019 that will increase the supply of affordable housing and meet the diverse housing needs of the community. The project started in 2016 with preliminary research and feedback from the Planning Board. Progress increased in 2017 as housing issues became more and more urgent and other resources became available. In 2017, the Mayor appointed a Housing Strategy Task Force with participations from across the community with housing expertise. The City also hired a consultant, Berk Associates, to help move the project forward. Director Hope announced that the draft Housing Strategy will be presented at a public open house in May, and announcements will be sent out once the date has been finalized. Valuable information will be made available on the website, as well. There will also be a variety of other public meetings as the strategy is further defined, and it will come back to the Planning Board for additional work, too. Director Hope provided a brief review of the most current housing data, cautioning that there is no way to know exactly how many people have housing challenges and what those specific needs are from year to year. However, the information is useful in providing a snapshot of what the needs are. She shared that the Housing and Urban Development (HUD) Area Median Family Income (HAMFI) in Snohomish County was about $96,000 in 2017, and the median family income in Edmonds was slightly higher than the County as a whole. The average household size in Edmonds is about 2.25 people, but the majority of households are 1 or 2 people. About 190 senior families and 665 seniors living alone in Edmonds have an income below 30% HAMFI. There are also an estimated 130 large families and 455 small families with income that is less than 30% HAMFI. She noted that renter and non -family households were much more likely to have lower incomes for a variety of reasons. The median home value increased by $250,000 over the past six years, from $314,500 in September 2011 to $554,400 in September 2017. By February 2018, the median home value had increased to $561,000. In addition to the rising costs, the inventory of homes available to purchase is very low at this time. Director Hope explained that households who are required to pay more than 30% of their income into housing are considered "housing cost burdened." This might not be a problem for some people who have other resources, but it is a significant problem for many others. She provided a graph showing rental affordability limits based on unit size and pointed out that vacancy rates are currently low for all unit sizes (3-4%). That means there is not a significant inventory available even for people who can afford the higher cost. She pointed out that average rents are not affordable to households at 60% HAMFI or less. The largest groups that are cost burdened in Edmonds are small families and non -family, non -senior households. Director Hope advised that about 11,000 people work in Edmonds, but 77% of them live outside of the City and 42% live more than 10 miles from their workplace. If greater workforce housing was available in Edmonds, more Edmonds workers would be able to live in the community. This would reduce traffic, reduce transportation costs, and be a positive impact on the environment. Director Hope reported that 21% of the City's population is over the age of 65, and this percentage is expected to grow significantly over the next 10 years. Nearly 2,000 elderly households are cost burdened, and 422 are renters. Housing needs among the senior population will continue to increase across the entire income spectrum. Director Hope advised that, currently, there is a significant misalignment between the size of housing units in Edmonds and the size of households. Some of this disparity is due to a large number of "empty nest" households with older residents. Currently, 71% of households have only one or two members, and only 11% of the units have one or fewer bedrooms. About 38% of the unites have two or fewer bedrooms. In 2017, there were 18,663 total housing units in Edmonds, and detached single-family units accounted for 63% of the available stock. There were 68 new units permitted each year since 2010 and 107 new units permitted since 2015. About 44% of the permitted units were in larger multifamily buildings. Only 9% of the units permitted were in the "missing middle" formats (duplexes and 3-4-unit buildings). Director Hope summarized that there are a variety of housing types that are needed to serve the various populations in the City. For example, more market rate housing in the "missing middle" formats could serve small families with incomes between 60 and 100% HAMFI; market rate apartment production and transit -oriented housing options could serve workers, small families and senior households with incomes between 60 and 100% HAMFI; programs to support affordable aging in place would serve low to middle -income senior households; and subsidized multifamily housing at targeted income levels and household types could serve small families, workers and senior households with incomes between 0 and 80% of HAMFI. She provided the following needs assessment highlights: Planning Board Minutes March 28, 2018 Page 2 • There are homeless people in Edmonds, including about 260 homeless or doubled -up students. Subsidized multifamily housing and transitional housing would help these families. • Over 1,100 low-income workers commute more than 25 miles to jobs in Edmonds. In addition, there is a large number of low-income households that are between 0 and 50% HAMFI. These populations could be served via more subsidized multifamily housing and accessory dwelling units (ADUs). • There is a large number of low-income senior households (440 renter and 890 homeowner) with an income between 0 and 50% of HAMFI that could be served by more subsidized senior housing, ADUs and tax/fee relief. • Moderate income workers and families (between 50 and 80% HAMFI) could be served by more market -rate multifamily rental housing, ADU's and subsidized multifamily housing. • Middle income households, including seniors seeking to downsize, (between 80 and 150% HAMFI) could be served by more condominiums, townhomes, cottages, and ADUs. They could also be served by more market -rate multifamily rental housing and market -rate senior housing. Director Hope advised that the consultant has interviewed a number of local developers, seeking insight on the current issues and needs relative to housing. Interviewees included 2 affordable housing developers; 4 market -rate, multifamily/mixed-use developers; 2 market -rate, 2 primarily single-family developers; 1 ADU architect; and 1 in the construction business. They provided the following feedback: • Height limits in Edmonds are too low. It was noted that multifamily development generally needs 45 feet in height, and even more if underground parking is provided. Single-family development needs 30 feet. • The parking requirements can make multifamily development difficult to pencil out. • The ground floor retail requirements in the downtown zones need to be reconsidered. The current requirements reduce the space for housing and it is difficult to fill the retail space in today's market. • There needs to be clear and consistent expectations regarding Development Code requirements. • The permit review process needs to be fast and have a predictable timeline. • The City should consider revising the engineering permit review process to reduce redundancy and unnecessary steps. • The City should provide more information about incentives and reconsider impact fees. Several of the developers were unaware of the City's Multifamily Tax Exemption (MFTE) and other incentives, but they voiced concern that impact fees harm a project's feasibility. • Edmonds should inventory all publicly -owned land for development potential. This is a great idea, but not very useful for Edmonds because the City does not have a lot of undeveloped public lands. • Consider a regional funding approach, such as King County's A Regional Coalition for Housing (ARCH) Program or Snohomish County's Alliance for Housing Affordability (AHA) Program. The cities and County could work together, with each jurisdiction contributing funds or land for the development of subsidized housing. • Bring in non -profits through the Requests for Proposals process after identifying goals and resources and conducting outreach. • Reconsider the City's current ADU provisions. The current height limits and parking requirements can make projects infeasible or very expensive. Approving pre -fabricated designs would reduce the costs. Director Hope advised that, as the process moves forward, the consultant has put forward for consideration the following list of housing objectives, as well as tools for accomplishing each objective: Objective 1 — Increase the supply and diversity of market -rate multifamily housing. Potential tools for accomplishing this objective include reducing residential parking requirements, allowing greater building heights and densities in multifamily zones, targeted rezoning of single-family residential areas to allow multifamily units, and providing faster, predictable and user-friendly permit review. Objective 2 — Expand opportunities for "missing middle" home production. Potential tools for accomplishing this objective include relaxing restrictions on ADUs and backyard cottages and applying targeted rezones to allow for townhouses, cottage housing and/or small -lot single-family development. Although the City has provisions for ADU's, only attached ADUs are currently allowed. Objective 3 — Provide incentives or reduce costs for affordable housing. Potential tools for accomplishing this objective include expanding the existing MFTE program, developing voluntary inclusionary zoning and density bonus Planning Board Minutes March 28, 2018 Page 3 programs, waiving or reducing impact fees for affordable housing, waiving or reducing permit fees for affordable housing, and helping facilitate donations of land to use for affordable housing. • Objective 4 — Increase resources for subsidized affordable housing. A potential tool for accomplishing this objective is linkage fees. For example, a certain type of development could be allowed in a zone if the developer pays a fee based on the size of the development. The funds collected could be used to help develop subsidized housing. Other potential tools include a housing levy where tax money is paid into a fund and finding more ways to qualify for grant funding. It was noted that Community Development Block Grants are typically geared towards lower income areas, so it is difficult for the City to qualify for these funds. • Objective 5 — Identify solutions for special needs populations. The beneficiary of this objective would typically be seniors, veterans, and disabled and homeless populations. Objective 6 — Provide protections for low-income tenants. The state recently approved legislation that prohibits landlords from discriminating based on the source of income. That means that people who receive Section 8 funding should not be eliminated from being considered for housing. A potential tool would be for the City to do more to provide fair housing information. • Objective 7 — Help keep some housing affordable. Potential tools for accomplishing this objective include supporting third -party purchase of existing housing in exchange for long-term preservation of the units and finding ways to help property owners make improvements in return for a covenant that the units must remain available to households at a certain level of income. Director Hope summarized that the intent is to show a range of opportunities that include partnerships, code changes, additional incentives and obtaining more resources. Moving forward, the consultant will refine the tool list and conduct additional research into tool viability. Some of the tools may not be practical for the City, but the intent is to put forward as many ideas as possible. She invited the Board to provide additional input, noting that the updated tool list will be presented to the task force for additional recommendations. Again, she advised that a public open house will be held in May to solicit community input. As the plan moves forward, the Planning Board will have additional study sessions, as well as a public hearing, before forwarding a recommendation to the City Council. The goal is to have the draft Housing Strategy before the City Council for review and possible action in mid -summer. Board Member Crank disclosed that she works for the YWCA Seattle King Snohomish, and housing challenges are something she deals with every day. She said she is pleased to see the progress that has been made on the Housing Strategy since the first task force meeting. She noted that most of the task force members are developers. She asked if the consultant has considered meeting with organizations such as the YWCA, which owns 15 permanent housing structures with over 900 units across both counties. The YWCA's Shelter Plus Care Program responds to the needs of homeless adults and families with disabilities, assigning them with permanent housing and long-term support services. In addition to the YWCA, there are other organizations that could provide great insight and resources. She felt it would be helpful to speak with other organizations to learn more about what the needs are and what is and is not working. Director Hope said the consultant has had some conversation with the Catholic community, which has thousands of housing units in the area, as well as some other organizations. But she recognized that more could be done. Chair Monroe asked if the City has reached out to neighboring jurisdictions and the County regarding the concept of creating a regional approach to address housing issues. Director Hope answered that the Housing Strategy will emphasize the importance of partnerships with other jurisdictions, as well as non-profit organizations such as the Alliance for Housing Affordability. She announced that Snohomish County has provided up to $500,000 in matching funds to cities who build affordable housing, and this is just one example of how the City could partner with other jurisdictions to get more done. Board Member Rubenkonig advised that she followed all of the links provided at www.edmondshousin stg rategy.org. She particularly referred to the Complete Housing Tool Kit published by the Puget Sound Regional Council (PSRC), which provided a list of 13 tools the City could use to address housing issues. The City is already using some of these tools. She reviewed the list as follows: Planning Board Minutes March 28, 2018 Page 4 • Accessory Dwelling Units (ADUs). The PSRC provides links to websites that illustrate how the concept is used successfully in other communities to meet a variety of housing needs. Director Hope noted that the City already allows attached ADUs, but the current requirements are stringent. • Cluster Development. Director Hope advised that a type of cluster development is already allowed in Edmonds through the Planned Unit Development (PUD) provisions, but the provisions are not user-friendly in their current format. Typically, cluster development refers to cottage units clustered around a green space or single-family homes clustered together on smaller lots. She acknowledged that the PUD code provisions could be amended to better address opportunities for cluster development. • Cottage Housing. Director Hope said cottage housing development is where you build an equivalent of two homes on a single lot. Typically, cottage homes are clustered with a number of smaller homes that share some open space. Board Member Rubenkonig commented that the City of Shoreline had provisions for cottage housing, but they were later eliminated after concerns were raised about a particular cottage housing development. Director Hope said several other cities, including Mountlake Terrace, have provisions for cottage housing, but design standards are very important to make them work well. • Infill Development. Director Hope said the City's opportunities for infill development are limited. Perhaps more opportunities will come up depending on the market value of property and the zoning options available. • Master Planned Communities. Director Hope advised that there is not a lot of opportunity for Master Planned Communities in Edmonds because the City is primarily built out. Typically, this process is used for very large • Mixed -Use Development. Board Member Rubenkonig noted that this concept has been used in various parts of the City, most recently in the Westgate and Highway 99 subareas. • Mobile/Manufactured Homes. Director Hope said they do not have any of this type of development in Edmonds, and none have been proposed, either. Given the cost of land, it is difficult to image that this type of use would be feasible. • Multifamily Development. Director Hope observed that only a small portion of land in Edmonds is zoned for multifamily development. Most of the multifamily -zoned property is built out, and it would be difficult to replace the older stock given the 25-foot height limit. Most cities allow a greater height in their multifamily zones. Board Member Rubenkonig pointed out that there are some multifamily developments that have a height greater than 25 feet, but they were built under the County's jurisdictions prior to annexation. Director Hope pointed out that the City of Edmonds used to have greater height limits, too. • Planned Unit Development (PUD). Director Hope advised that PUDs are similar to Master Planned Communities. • Preservation and Rehabilitation. Board Member Rubenkonig suggested that perhaps the City could make funding available to rehabilitate and preserve existing affordable housing stock to bring it up to code. Another option would be for the City to purchase the housing units so they can remain available to the community. Right now, the City does not have a program of this type. Director Hope agreed that the City is not involved in any of these situations currently, but some non-profit organizations may have existing housing in the City and it might be appropriate for the City to consider how it could support and help in this effort. • Small Lot Development. Board Member Rubenkonig recalled that in the recent past, the Board discussed the concept of small lot development. Many of the lots in the downtown area are smaller than the minimum lot size allowed in the zone, but the City cannot deny the owners the ability to redevelop or develop them. She asked how a small lot development provision could help provide opportunities for affordable housing. Director Hope agreed that small lot development could work in some places. Whether it is an option for Edmonds is questionable because so much of the land is already developed. Some cities have developed standards for small lots so that development looks like single- family homes. Small lot development provisions can allow larger lots to be subdivided even if the lots do not both meet the minimum lot size requirement. She agreed that the City should consider this tool as a potential option. • Townhomes. Board Member Rubenkonig recalled that the Planning Board recently forwarded a recommendation to the City Council that should help with townhome development, and it was subsequently adopted into code. She asked if this tool should be given more attention, and Director Hope answered no, with the exception of perhaps Five Corners. • Zero Lot Line Development. Director Hope advised that, with the exception of Planned Residential Developments, the City does not allow zero lot line development. Board Member Rubenkonig asked if the PSRC's tool kit would be considered as the Housing Strategy moves forward, and Director Hope answered affirmatively. Board Member Rubenkonig said it appears that much can be done to address the various Planning Board Minutes March 28, 2018 Page 5 housing issues, and she welcomes the use of the phrase "missing middle." She commented that the issues are overwhelming, particularly when considering all of the young people she is aware of who were raised in Edmonds but can no longer live here because apartments are not as available as they once were. Many have been converted to condominiums, and most of the entry units were lost. Director Hope pointed out that the legislature passed condominium liability laws that make it difficult for people to build this type of entry housing. Although the legislature has considered changes to this law, none have been approved to date. Director Hope agreed that the issue of housing is complicated and there are no simple answers. Input from the Board and the task force is helpful. There are a lot of different situations and needs. The hope is that the Housing Strategy will offer a variety of tools that the City can prioritize and implement going forward. Board Member Rubenkonig suggested that more narrative and examples should be added to the statistical presentation to help people understand the importance of the numbers and the situations that many residents are experiencing. While Edmonds is an affluent City, not all of its residents are affluent. They need to consider the needs of all residents. Board Member Robles said he enjoyed reading through the preliminary information provided to the Board, and it is clear that the staff and consultant have listened to the input provided by the Board thus far. It is exciting to see all of the ideas coming together. He said he also likes the idea of addressing the "missing middle." The idea of providing a set of diverse tactics will make the community more resilient. Board Member Robles observed that there are a lot of "silent" costs associated with affordable housing that might not get mentioned in the Housing Strategy. For example: • Maintenance can add an enormous cost to living in a condominium, and poor management of repair contracts can increase these costs even more. He suggested there needs to be more resources available to help condominium associations and individual owners manage these costs. • A senior property owner might not be willing to be assessed for a 20-year roof if he/she only plans to live in the condominium for five years. Condominium associations need to be made aware that a non-profit organization can borrow money from itself, and this eliminates the counter incentive. Perhaps the City could introduce a class of entrepreneurs who can assist in getting these specialty financial products to the community. • The income potential from an ADU can be subtracted from the mortgage to make a home more affordable, but banks must be willing to count this additional income. Perhaps the City could negotiate with a local bank that is willing to offer this one product because it is a viable option in Edmonds for making housing more available. • There is a large number of split level homes in the area that could be divided into two units, with the upper and lower units having separate accesses. Perhaps the City could offer pre -permitted plans that property owners could use to understand exactly what needs to be done. This concept could result in trans -generational housing opportunities for older couples who need assistance, young couples who need financial help with rent, college students, divorced couples who both want to live near their children, etc. • He is in favor of having the ability to look at a variety of solutions and offer unique insurance products that can cover the gaps in liability that are introduced as they try to solve the housing problems. • The City already allows some types of home businesses, and perhaps this opportunity should be expanded to include new types of light industrial businesses such as online businesses, 3-d printing, etc. Board Member Robles summarized that there are a lot of good ideas and many professionals are available to help the City come up with architectural plans, etc. He noted that the Architectural Design Board has indicated a desire to participate in coming up with Edmonds -type solutions, as well. They currently have awareness and support from the community to resolve this issue, and he is glad to see a wide-open door to consider a variety of ideas. Vice Chair Cheung said he supports expanding the ADU provisions to provide greater flexibility to property owners. Some properties might not be suitable for an attached ADU, and a detached ADU would be a better option. There are a number of situations that would benefit from the ADU option, such as live in child care, an aging parent, college students, etc. ADUs offer opportunities for additional rental income, as well as opportunities to seniors who no longer want large homes to remain in their same location. He recognized that some people are not inclined to support ADUs because of privacy and noise issues, Planning Board Minutes March 28, 2018 Page 6 but many more people will likely be interested in the option. He said he would like input from the public regarding this particular tool and its potential benefits and impacts. Board Member Rosen applauded the work that has been done on the Housing Strategy thus far. He really likes the structure of the presentation and how it was organized. The work done so far speaks well of the City staff, consultant and task force. He said he also supports ADUs as a tool and is interested in obtaining public feedback about the pros and cons. He voiced concern about the term "affordable housing. Moving forward he suggested that they either alter the term or look for ways to provide qualifiers to make it clearer. In some cases, the term "affordable housing" could hurt more than help. Board Member Rosen commented that the data shared is incredible. However, as they move forward with future discussions, it will be important to put the data in the context of value and why it is important. They all want a place where they can work, live, play, learn and age, and it would be nice if those needs could all be provided within the City. They also want their neighborhoods to be safe and a place where young professionals can live, work and raise their families. They want to provide opportunities for multiple generations to live together. Whatever they do, they want to preserve the aesthetics of the town without compromising property values and property rights. They also need to accommodate growth. The current inventory of affordable housing is low and the quality of this housing is also questionable. They must increase the inventory of quality, affordable housing going forward. They need a place where tourists can come and spend their money and then leave, and housing has something to do with that, as well. They must protect the environment and ensure that property owners and developers have a level playing field. Board Member Rosen observed that it is more challenging to address affordable housing in the City of Edmonds, which is primarily built out already and more people are coming. Additional housing is needed and incomes and the cost of housing have not kept pace with each other and the housing shortage is getting worse. There is no silver bullet answer. All of the tools being considered are important, but he believes that ADUs, in all formats, are one of the most important. If you make a list of all of the needs and all the things that ADUs can bring to the party, they become a sound solution that meets a large number of the needs. The City of Edmonds is not unique, and they can learn from other jurisdictions. They need ADUs and they need to continue to educate and engage the community in the discussions. The decisions should be driven more by values, so creating minimum standards to protect the values and safety they all want will be important. He said he worries that the American dream is going to become just that, a dream. There is no do -over button for the decisions that are made now. The decisions are important for the fabric of the community and for future generations. He said he appreciates the thoughtfulness that has gone into the process so far and hopes it will continue going forward. Chair Monroe thanked the staff, consultant and task force for doing such a great job of defining the problem, and the data provided was helpful, as well. However, he questioned how much of the HAMFI data is skewed by the homeownership of the elderly. A number of senior citizens own their own homes and do not have a mortgage. Therefore, they can get by with less income. Director Hope agreed that while some senior citizens do not have a lot of income, many already own their homes and are in better shape. However, it would be difficult to collect this level of specific data. Chair Monroe said he is also in favor of expanding the ADU provisions, which he does not believe would add a concentration of density in any one location. Board Member Rubenkonig pointed out that the American Housing Survey collects data on whether or not a person owns his/her home. She also asked if the City's current ADU provisions allow for ADUs above commercial and industrial buildings. She suggested that this could be a valuable option that would not consume valuable commercial and industrial property with residential uses. Director Hope answered that ADUs are allowed in the mixed -use zones and all commercial zones allow some amount of residential use, with the exception of the Commercial Waterfront zone. She said they do not have any heavy industrial development in Edmonds, but there are some light -industrial uses. However, it is important to note that adding to an existing structure might not always be feasible. Board Member Rubenkonig suggested that the staff and consultant research this option further to see how it would impact the current inventory. Board Member Robles noted that there has been no mention of Airbnb and other short-term rental organizations. This is another way for a family or individual to live in place. The problem is not that the use is illegal, it is that it is extra -legal. There is not a set of rules in place to protect owners and surrounding property owners. While adjacent property owners need to be aware of the activity, he cautioned against restricting the use because it brings in tourists and provides income to people. But because Planning Board Minutes March 28, 2018 Page 7 the use is extra -legal, there is no way to finance improvements or protect both parties, as well as the community. This can result in problems that eventually lead to the uses being shut down. He does not believe the City wants to reach that point. Instead, they want to allow homeowners this additional tool. Director Hope advised that bed and breakfast establishments are allowed in the City, but a business license is required. Several are licensed and operating at this time. Mr. Chave added that the City allows property owners to rent rooms and to operate bed and breakfasts. Airbnb is also allowed, depending on how many rooms are rented and what process you go through. Director Hope explained that Airbnb and similar short-term rental organizations have created problems in some cities. For example, in the Town of Leavenworth, bed and breakfasts and other short-term rentals have been so successful that there are no longer places for workers to live. Property owners get so much more money from tourists that workers are being frozen out of the housing market. REVIEW OF EXTENDED AGENDA Chair Monroe reviewed that the April III agenda includes a continued review and discussion of the Draft Urban Forest Management Plan, with a public hearing following on May 91. The discussion relative to the Housing Strategy will continue on May 9', as well. PLANNING BOARD CHAIR COMMENTS Chair Monroe commended the Board for their thoughtful comments relative to the Housing Strategy. PLANNING BOARD MEMBER COMMENTS Board Member Rubenkonig recalled that Board Member Lovell agreed to attend the April 4' meeting of the Edmonds Tree Board where the draft Urban Forest Management Plan will be presented. She said she may attend the meeting, as well. ADJOURNMENT The Board meeting was adjourned at 8:28 p.m. Planning Board Minutes March 28, 2018 Page 8