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Home My WebLink About10G - Park Dedication MEETING DATE: AGENDA #: PREPARED BY: AGENDA ITEM: DISCUSSION: CITY COUNCIL AGENDA REPORT April 7, 2003 10G C\/\. \ Frank Boyles, City Manager X '\ CONSIDER APPROVAL 0 ODIFICATIONS TO PARK DEDICATION FEES AND POLICY. History: Minnesota Statutes authorize City's to collect a park dedication fee or land in lieu of a fee to develop their park systems. Accordingly, Prior Lake has had a park dedication ordinance for some years now. The present ordinance provides that the City may identify up to 10% of the gross land area of each development to be used for park purposes. If land is not desired, the City may collect fees. For residential subdivisions, the fee collected is $1685 per unit. For commercial land, the fee is $3550 per acre. The City may also receive a combination of land and money. Current Circumstances: Land values in Prior Lake have changed dramatically in the last few years. The cost and number of parks and trails the City develops is adjusted as a result of development. Therefore, the City Council has directed that the policy be reviewed to assure that it is appropriate and adequate to fund the improvements for which it is collected. Greg Ingraham of Ingraham and Associates, provided the City Council with an overview of the study process, findings and recommendations earlier in the meeting. Mr. Ingraham found that $16.5 million will be required for park acquisition and development attributable to new growth. These resources would be generated through park dedication. An additional $7.2 million is needed to fund park acquisition and development attributable to existing development. Mr. Ingraham's recommendations are as follows: 1. Revise the park and trail dedication fee from $1685 to $2670 per new residential unit, and from $3550 to $5000 per acre of new commercial I industrial development. 2. Revise park land dedication to be based upon net land area instead of gross area. 3. Establish an amount to fund existing projects and projects designed to meet current needs through the existing Park Fund balance and General Fund. 4. Evaluate and adjust park and trail dedication fees every two years. Attached is a complete copy of the report for your review. Conclusion: The Council should determine whether it desires to implement all or a portion of the study's recommendations. 16200 Eagle Creek Ave. S.E., Prior Lake, Minnesota 55372-1714 / Ph. (952) 447-4230 / Fax (952) 447-4245 I :\COUNCI L \AGNRPTS\2003\PARK DEDICA liIN)~6~trillfr.f)fMj}LOYER ISSUES: Members of the staff and the City Attorney have reviewed the study recommendations and support each element. We also have shared the study results with six of the developers in the community to receive feedback. While they may prefer not to see an increase in fees, they appear to appreciate (1) our effort to analyze and charge fees that are related to our actual needs; (2) establish per unit or per acre fees rather than use a formula that is difficult to compute; and (3) changing the land contribution from 10% of the gross area to 10% of the net area. The City Attorney supports the latter change as well. ALTERNATIVES: In order to implement each of the recommendations in the study, the Council should act on the following motions: (1) Motion and Second directing staff to amend the 2003 City Fee Schedule in accordance with the study. (2) Motion and Second directing staff to prepare necessary ordinance amendments to base park dedication on net rather than gross acreage. (3) Motion and Second directing staff to determine how funding might be set aside for the $7.2 million of land and park improvements needed but not related to new development. (4) Motion and Second directing staff to complete another park dedication fee study in 2005. RECOMMENDED MOTION: Individual motions addressing items (1) through (4) above. 1:\COUNCIL\AGNRPTS\2003\PARK DEDICATION FEE CHANGE.DOC Prior Lake - Park and Trail Fee Update March 25, 2003 A. Purpose of the Update The City of Prior Lake uses park dedication and park and library bond referendum funds to acquire and develop parks and trails. The most important park funding source is dedication of land or fees from new development. The park dedication requirement is designed to enable new growth to pay for acquisition and improvement of parks and trails designed to serve that new growth. The City conducted a study in January 2001 and revised its park and trail dedication fees at that time. Since that time there have been minor changes in the park and trail system, and land and construction costs have increased. The purpose of this update is to review these changes and recommend park and trail dedication fees that reflect park and trail needs and land and construction costs. B_ Assumptions The City of Prior Lake will continue to experience residential and commercial-industrial growth over the next 20 years. New growth requires the provision of new park and trail facilities. The basic premise behind the 2001 study and this update is that new development should pay for the park and trail facilities designed to serve their needs. New facilities designed to serve new growth should not be the responsibility of the existing taxpayers. Conversely, park dedication fees from new development should not be used to pay for renovation or repairs to existing parks. The other basic assumptions of the park fee study are: · Eight new neighborhood parks are needed to serve the forecast new development. · A community athletic park will be acquired and developed in the southwest corner of the city. · Approximately 15 acres of the Vierling property will be used for park/open space. · An additional 115 acres of open space land will be dedicated. · Approximately 5,556 new housing units and 330 acres of new commercial-industrial land will be developed. · New growth residential growth accounts for approximately 50% of the demand for new community recreation facilities such as the athletic park, local trails, Vierling and Jeffers parks. C. Changes since 2001 Changes since the 2001 park dedication study are: · Additional park and open space land was acquired and the addition of Wilds North Tot Lot and Meadowview Park satisfied one neighborhood park service area need. March 25, 2003 1 · Three miles of trail were built. · Approximately 894 residential units were platted. · No commercial-industrial land was platted. · The Stemmer property was annexed into the City and it is assumed that it will develop as low density residential housing. This creates the need for one additional park. Other potential annexation areas were not figured into this update. · The January 1, 2003 park dedication fund balance is $1,300,727. The five-year park Capital Improvement Program assumes use of all of the fund balance for planned projects. · The Jeffers park and open space is estimated at approximately 25 acres of upland dedication area. · The average estimated per acre vacant land values increased: December 2000 March 2003 Land Use Category land value per average land acre value per acre Low Density Residential $55,000 $75,000 Medium-High Density Residential $85,000 $100,000 Business $100,000 $217,800 Lake Shore $100,000 $300,000 Open Space/Conservation $20,000 $24,000 These figures are based on analysis of recent sales, current listings, appraisals and interviews with area assessors, real estate agents and developers. · The cost of park and trail construction increased approximately 5% per year between 2000 and 2003: December 2000 December 2002 Trail construction per $85,000 $100,000 mile Park construction per $200,000 $220,000 neighborhood park The 2001 study included a park and trail fee spreadsheet that calculated the cost of the planned park and trail system (land and construction), the fair share of the system cost attributable to new growth, the proportional share of park and trail system cost attributed to residential and commercial-industrial sources, the new growth forecast and the recommended per unit (residential) and per acre (commercial-industrial) park dedication fee. That spreadsheet was updated (attached) based on the changes and assumptions listed above and the park dedication fee recommendations were revised based on those changes and current conditions. March 25,2003 2 c. Recommendations 1) Revise the park and trail cash dedication fee from $1,685.00 per new residential unit to $2,670.00 per new residential unit and from $3,550.00 per net acre of new commercial- industrial development to $5,000.00 per net acre. Park and trail fees are based on system acquisition and development costs divided by the forecast number of new dwellings and new commercial-industrial growth. The fees are proportional to the demand placed upon the system by new development. 2) Amend the City park dedication ordinance to base land dedication on net acreage instead of gross acres. To be consistent with other city requirements and density calculations, the calculation of park land dedication requirements should be based on net acres (gross area less existing road easements, wetlands, and water). The current practice has been based on gross acreage. The change to use of net acres requires a minor ordinance change and will bring the park land dedication process in line with other dedication requirements and fees, which are typically based on net acreage. 3) The cash park dedication fee should be established at the time of preliminary plat approval. That amount should carry forward into the development agreement. Subdivisions that receive preliminary plat approval after April 7, 2003 shall be subject to the updated park dedication fees. 4) The City should continue to fund park and trail capital replacement on an annual basis. Capital replacement should be funded from the General Fund or an account specifically designated for park capital replacement, not the park dedication fund. There is a need for approximately $7,000,000 for park development attributable to existing development. Annual park dedication funding will decline as the community approaches full development and park capital funding needs will shift from primarily new construction to primarily replacement. The City should plan for this transition from park dedication to other funding sources. 5) Park and trail dedication fees should be evaluated and adjusted every two years based on the cost of land and the cost of park and trail construction. March 25,2003 3 . ~- ~. - -~- . - . .._L - --n._-~.--i--.--_n--L-n___-------L__._ ---T----- _.~_+__.n__. ---r~- _._. O.Prior lake Park and Trail Fee Study- Update. II 25-Mar-431 ... . -- - - - ~ _ IPari<alld T~Ji Fee 13p~~h8itt _~=- ~~~~ur11p}l~n~=- _. lN~9r~~_b-~f~5.5~c!'Nl!1IIr19 uriils. ~pprox_6,9_66~~ex~sti69~~:rii~:_ ---_ .~_.J330acrE!s_o!.nE!.~ C:Ol11l11ercial-inC!ll.strialgrowth forE!~s.!.. ...L__ _ ,_______.___+ _ I Jeffers Park approx. 25 acres upland and 45 acres open space __ ___ _ _'--_ . . ~_ _ ___~__=_=-~=~==-=-~~~=-~ --:A)facre pa~rk on ~!5~0~iifn9ji~~~_:':=-_ ..__l:'::~~-- =T~:~-::~_:~ -- - _____L_ __~_L _ ... .___L_ ____~_ -1Eig.tl.tn_e~':'.e!~rhood yark~_~!5 ac~~ea.c:h______j______ Partl Land Needs (by Comprehensive Land Use Category) I Communi!)' athletic park of 25-40 acres (32.5 acres ave. assumed) R~=:=~~=-E=:-_~r:o~~;~=_L==~..--..~E_-=~:1=~-~i~~~c.o-"~~~~~_n_~re~approxJi.~~~~_}=~~:~- LI:J. ____ __+~ _. __+ _ ...~!i~_-i-a.llc>c:lI.~_50"!o.~f,Je_ff.E!.~t.'l~~..llE!II~~pmE!nt(112 .o!.!15_acr~~il(!)____!---~___r_____L______ ~~l~~~---t-=-lcf.~.l1i~:':~'a~ ~~"'"@~""t~~~t-t::~..- 6!hjr:Q~ii:~~~-~-:_-_--r-:~1m=:: i~':-~~ ~:~ area _ -lMiSc comp~te9on~s - open space a$~re-+-=:':_:'::=- _-:_-:.:_~::.:::l=.-:--=--= i-~=~-=::P~: ~n~:~ space :cres =-=-3_===-_~__=i..~-==_:.:==--= Trail Land Needs I i 37 miles of new trail less 2 miles in trust land and 10 miles of collector trails i ------- iTrust and r--~--~---- , 1--- J Collector J Local trail iT otalloc:al trail I I i TOta-'-Nli.~s r.1J1~_ _ _ 111!les ,area liIcres 50% of area 150% of all new trail land - 20 foo.!.wJ.5je row_~~~__ ____ - 37 u_ __ ~ __!2___~__ .J~ _1 __~~~_ ----+-~--=f' acres Allocate 50% of new trail cost. to new devel!,p.!!le.nt - ___---1 I ---L-. _ Avera en htofway.c:ost=~.$~~!.!.___-+__ ~ti~~J:.a~if~~~e (biRomprehenslv~ Land O~e Cat lory) -=-----1--- -~- . --t-----=--- -- . ---:-+=--=-~=- RR-----n+-----+~aIU~~~_------!-------L--. ,. _~I----_-+----_ ~~-~~~-f!b_-:.E==-=-~~F~bg:~~~ I . -:n=-_-__t~ --=i=~-==-t----r____r_=-===c~~~l--=~~~-- LD!:i~a.~!!o!~-~_-i-$ _. 3QQ,llQ'b+= I I I 1. ==i=--i----- ope_~ce . -~-----t-$~ 24,000 !,!,~scellan~~u.~ COITlpJ:I~n catl!9.o~~(~n~d not suitable !or active park U&-----t-------f-___u P~~~,icfJ~$"~~~~n f~f==~~~:l~:~te i . -- I --=1= t=-t- i ------ -t---.:.::.= Neigh~O'rt,"@~.il~_- :::~::.--- !o: . $-:---"220,OQO ~..r.pa~___----+-__ _ alioeate 5~f Jeffers and Vie~eW-d.E!~elopnier1! c.. ().r11'!'.~U~.ityJ'.--.a.rk!. __... ~.-~...J.'__-.---.1 --t.L 2.,50.(),000. per park. f----- alloc:at~~()_'\l,~ew comm.unity.p.a~ to new p.E!.,!-.el---. _. Tralls__ . T__~ _ J-.--2~_+L- _100cOClQ ~ per .!J1i1fl___ _---j__ ___ allClcate 50% ~f trail cost ~o new ~E.rn~.!1!-L- _n_ ~~-[)8!~iOp~ri_!I=o~L~_.:':.-+:':_::':::~~=-=-I-_=t- -l -~ =__=-:.::____~ -===---=~n l -. t _______--+g\o'Je!lingll.n!t!f--_____-l--~res Estimated pro I'!ion of par~~nd trail ~~__-+-___ Residerltial_L... ...... ... .----t-...M56. ---+--.1668 90% --.:I-----f--+---- :::~~;~:~1;:~:~~_~~~~---n~:_:~-:t::.:=:.:.-=:==t-n~~~--L-____~~~,- +--+=.=~=t~~=_-= L<lnd~cg~I~~()~E'.!~+Rark an~_t!'!ilcon~tuction co~t~par StS~r11 co~-1 i=---+ .'. I ___-1-.____ =;~~~~~=.1;~~t--=t~~f~~t=-1~~- t~},~i()_li lReSidential PE!r~n~!~_----"-=--==-::': - . Round to $2;6701n_ un~_":'__ I - . C:=: =~:.==-__=:t-=::.::.-=. _ $4.,9951~-1C_"_'!'~r~i~!:lndLJ~~J~~~fee _~_ Rounci to $;'~~~ acre I ------~-t----..J--_-- Ii'.! : I "I i , I i I Ii, i i : f 'I I I I I I i I ',I I' I I I " I .u u_ _L__ _ _____1 ___._ ~~1t,;!_~!;::~f~---:=ef~-=-t ..t~ =t~~.. - J)I2.ofV,enln9~a!k7.5acresa~$300.00.P/l!~e_,,_ ~-1------Lg~.!iQ.000 1__--+__ _--+_ ~ _nJ__~_ ~~ ~ 1/~_o!..comrTIun!~ athletic field_s.J.~~~~ ~res at$24,0.Q9.!!l~~,,-_ _-+- $390,Q~ --1--- __ .:___ ___,___ _ __ __+11~ o! I~cal !.rail ~.9.I'1.l!.c?f_~+l1 ~cres~t$75,000/acre = , $825,000 I _ __ ~ _ _j__ _..;_ u_ __ P"""".'fj"!~~~~i].&;,~~~"~~;j~". l:;~J:.. .~=+-J. ... __p_~.of25m+eS Of!.oc:a~"---~---__r_-----T-- - I :;:~;~:~~~ 1- n---t==----l=--..~=-+-=~_ _~._~~=t----..~J_:~:~-=:.:!-~~~~==__i -=---===r=__ --l----~1_-=~~__ ..L~-~--=t= !New ark & trail costs associated with existin devel. $7,122,500 . . I E. Comparison to Land Dedication Requirements It is important that the cash park dedication fee be comparable to a land dedication requirement. The City can require either a land or a cash dedication from new subdivisions for parks and trails. The land dedication is typically about 10% of the subdivision land area. The current practice is to require dedication based on gross acreage. A more consistent method is calculation based on net area. The net area typically excludes existing road easements, wetlands, water and other undevelopable land. The change from land dedication based on net acres instead of gross acres will result is slightly smaller land dedication areas. Therefore, it is important to assure that only usable upland areas are counted as dedicated land. Other open space areas such as wetlands can be accepted for public ownership, but these areas should not count toward satisfaction of park land dedication requirements. The cash dedication fee amount should be based on the fee amount in effect at the time of preliminary plat approval. That amount should carry forward into the development agreement. Subdivision 10% Estimated Land dedication Cash dedication option. Examples dedication of per acre option - Park land Per unit or per acre (in net acres) land area value dedication value per based on recommended unit or acre 2003 dedication amount 10 acre single 1 acre $75,000 $3,000/unit $2,670/unit family residential (25 units) 10 acre multi- 1 acre $100,000 $2,000/unit $2,670/unit family residential (50 units) 10 acre 1 acre $217,800 $21,780/acre $5,000/net acre commercial- industrial development The table shows that the per-unit or per-acre cash park dedication fees are similar to the value of the raw land dedication. The cash dedication per-unit fees are slightly higher for multi-family residential units due to the higher density and the commercial-industrial cash dedication is lower because of the higher land costs and the lesser demand on the recreation system than an equivalent area of residential land use. March 25,2003 5 F. Comparison to Other Communities Park Dedication Fees The average park dedication fee for developing cities in the Twin City metropolitan area is approximately $1,960.00 per residential unit and $5,850.00 per acre for commercial-industrial subdivisions. These figures are based on 2001 and 2002 surveys of metropolitan cities. The cash park dedication rates for cities near Prior Lake are higher as shown below. Residential er sin Ie famil unit) $2,000 $2,400 $2,500 $2,660 $2,670 ro osed $1,642 (min. $8,OOO/acre) $3,600 Commercial- Industrial er acre) $7,000 $7,000 $7,000 $4,470 $5,000 ro osed $15,000 based on bId . size City Sava e Chanhassen Eden Prairie. Shako ee Prior Lake Chaska Bloomin on March 25, 2003 6 References and Source Materials - 1. City of Prior Lake & Prior Lake Comprehensive Plan - 1999 & 2001 2. Edina Realty and MLS real estate listings. 3. Scott County Assessment Division 4. Minnesota Center for Survey Research- Leisure in the Twin Cities Area by Laurie Manteufel and Rossana Armson, 1996 5. Minnesota Recreation and Park Association - 2001-02 Park dedication surveys 6. Park Dedication Survey of Minnesota Cities - Ingraham & Associates, 2001 7. National Parks and Recreation Association 8. Recreation. Park and Open Space Standards and Guidelines by Roger Lancaster, 1990 9. Park. Recreation. Open Space and Greenwav Guidelines by James Mertes and James Hall, 1996 March 25,2003 7