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HomeMy WebLinkAbout5I Park Dedication Fee Agreement O � PRI�� � � V � 4646 Dakota Street SE Prior Lake, MN 55372 `�INxESO��' CITY COUNCIL AGENDA REPORT MEETING DATE: OCTOBER 28, 2013 AGENDA #: 51 PREPARED BY: JANE KANSIER, ASSISTANT CITY MANAGER PRESENTED BY: JANE KANSIER AGENDA ITEM: CONSIDER APPROVAL OF A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE THE CITY'S STANDARD PROFESSIONAL AGREEMENT WITH HOISINGTON, KOEGLER GROUP, INC. FOR THE COMPLETION OF THE PARK DEDICATION FEE EVALUATION AND UPDATE DISCUSSION: Introduction The purpose of this agenda report is to obtain City Council approval for the completion of the Park Dedication Fee Evaluation and Update and to authorize the City Manager to execute a Standard Professional Agreement for the study. Histo The City of Prior Lake uses a variety of funding sources to acquire and develop parks and trails. One of the most important funding sources is the dedication of land or fees from new development. The basic premise of the dedication requirement is that new development should pay for the park and trail facilities designed to serve their needs, and that these facilities should not be the responsibility of the existing taxpayers. The City first completed a park dedication fee evaluation in 2001, and updated this evaluation in 2005. The current park dedication fee was established in 2005. The fee was established based on the projected cost of the future system, as identified by the Comprehensive Plan. The intent was to monitor the costs and make adjustments, either upward or downward, to the fee to ensure that the park dedication fund balance would be virtually exhausted at the end of the planning period. Current Circumstances Minnesota Statutes 462.358, Subd. 2b requires a cash fee be based on the average fair market value of the unplatted land. Subd. 2c of the Statute goes on to state "There must be an essential nexus between the fees or dedication imposed under subdivision 2b and the municipal purpose sought to be achieved by the fee or dedication. The fee or dedication must bear a rough proportionality to the need created by the proposed subdivision or development." Land values have gone through several changes since the study was last updated. The purpose of this update is to reevaluate the costs of future park and the current land values to assure we are collecting no more but also no less than we need to complete the initial construction of our park system. To complete this work we solicited a proposal from Hoisington Koegler Group, Inc. Greg Ingraham, one of the principals in HKGi, completed the original park dedication fee study and the subsequent update in 2005. We reasoned his cost would be most competitive since he completed the original study. The total cost proposed to complete the study is $15,755, including direct expenses. It is anticipated the work will be completed within 2-3 months. A copy of the proposal is attached. Conclusion The staff recommends the Council approve the completion of this study. ISSUES: While State statutes allow the City to collect park dedication fees, there is an emphasis on rational nexus. This has been a long-standing issue with the development community. In 2013, the State Legislature addressed this issue with the language pertaining to fair market value. As the pace of development begins to increase again, it is important the City's fee structure is consistent with State statutes and with our actual needs. With the completion of this update, City staff will have a mechanism to do regular adjustments without the need for consulting help. FINANCIAL The funding source for this study will be the $150,000 SMSC donation which was IMPACT: deposited in the Capital Park Fund. These funds were donated to the City for use on projects that will benefit the entire community. Staff believes this is an appropriate project, since the information generated will results in overall improvements to the park system. HKGi has discounted the cost of this study by $1,000 since we will also be entering into an agreement with them to complete the Trail and Sidewalk Study. ALTERNATIVES: 1. Adopt a resolution authorizing the City Manager to execute the Standard Professional Agreement with Hoisington Koegler Group, Inc., for the completion of the Park Dedication Fee Evaluation and Update. 2. Take no action and direct the staff as appropriate RECOMMENDED Alternative #1. MOTION: � O � PRIp� � � U � 4646 Dakota Street SE '��so��' Prior Lake, MN 55372 RESOLUTION 13-xxx A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE THE CITY'S STANDARD PROFESSIONAL AGREEMENT WITH HOISINGTON, KOEGLER GROUP, INC. FOR THE COMPLETION OF THE PARK DEDICATION FEE EVALUATION AND UPDATE Motion By: Second By: WHEREAS, The City of Prior Lake has determined that it is essential to provide the financial resources to compiete its park system at community build-out; and WHEREAS, The City has affirmed it is financiaily necessary to adjust the existing park dedication fees to generate sufficient revenues to offset the cost of future infrastructure associated with new development; and WHEREAS, The City Council has tleterminetl new development should pay its fair share of system construction or oversizing; and WHEREAS, The City last updated the park dedication fees in 2005; and WHEREAS, The City Council has determined the park dedication fees must be re-evaluated in order to meet City needs and to be consistent with Minnesota Statutes. NOW THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE, MINNESOTA as follows: 1. The recitals set forth above are incorporated herein. 2. The consulting firm of Hoisington Koegler Group, Inc. is hereby selected to complete the Park Dedication Fee Evaluation and Update at a cost of $15,755. 3. The City Manager is authorizetl to execute a standard professional services contract. 4. The funding source for this study will be the $150,000 SMSC donation which was deposited in the Capital Park Fund. PASSED AND ADOPTED THIS 28T" DAY OF OCTOBER, 2013. YES NO Hedber Hedber Keene Keene McGuire McGuire Morton Morton Souku Souku Frank Boyles, City Manager