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Councilmember Hendriksen responded that there are rural lots that will be in the MUSA boundary and their restrictions will automatically change if they do not retain the R-1 Rural designation. There will be a significant backlash if the City tries to impose urban standards on rural lots. Councilmember Gerald Zimmerman and Planning Commission Chairperson Mike Nixt arrived at 7:00 p.m. Staff discussed with City Council the fact that most of the performance standards are based on the size of the lot, not whether the property is in or out of the MUSA. By a majority consensus of City Council, staff was directed to go forward with the merging of the rural and urban single family districts into one district. 2) Urban Services in the R-1 District - Mr. Gordon stated that the proposed zoning regulations will require all new development in the MUSA to be serviced with sanitary sewer and municipal water. Existing large lots will not be required to connect to the services until they subdivide. Councilmember Hendriksen stated that there should be a lot size threshold wherein existing homesteads can remain with their on -site septic and well systems and not be required to hook up to sewer and water when they subdivide their property. There was a unanimous consensus to direct Mr. Gordon to include language in the code to the effect that newly created lots shall be serviced with city sewer and water and the existing homestead is exempt from this requirement as long as it maintains some minimum lot size. Mr. Gordon and Staff were directed to plug in an appropriate lot size; perhaps something more than 2.5 but less than 10 acres. 3) Accessory or "Mother-in-law" apartments - There was a very brief discussion about accessory or moter-in-law apartments and Staff was directed to write provisions into the Code that would allow accessory apartments within the main dwelling on a property. 4) Home Occupations - Staff was directed to list home occupations as a permitted use within the residential districts; remove all references in City Code to utilizing the conditional use permit process to obtain a home occupation permit; establish a procedure and performance standards in City Code for obtaining home occupation permits. The language in the new text should also use the phrase 'no outward manifestation of the business activity within the home.' Chapter 9 Committee/March 21, 2002 Page 2 of 5