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HomeMy WebLinkAboutMay 19, 2000 rD' """'U' ',.,'.',' r.'M" \ . }f :: '" l :; :; '* J } :~ ~~ .'i :~ ~", , " , " 1.:: .. ~ .};' .:, p ;::W ~ i~ -"':;~;i:;:tf;> ',:~~:::n:: '::::,:,:.. :::~ "'::i':'<':. ?'UJffl tM V~ 06 FRANK BOYLES May 19, 2000 TO: MAYOR MADER AND CITY COUNCILMEMBERS SUBJECT: MAY 22ND CAPITAL IMPROVEMENT WORKSHOP The City Council has directed that I schedule workshops so the Council can review the draft 2001-2005 Capital Improvement Program in detail by department. The following two workshops have been scheduled: · Monday, May 22nd @ 6pm at Fire Station No. 1 with respect to Parks projects. · Monday, June 5th @ 5pm at Fire Station NO.1 with respect to Public Works projects. In order to better understanding the overall Capital Improvement Program, I proposed that each workshop focus primarily on the proposed projects and at least briefly on the revenue sources supporting each. The primary funding sources for park projects other than Referendum dollars are park dedication and park support funds. Park dedication is paid by the developer at the time of platting. The form of payment is up to 10% of the land being platted or if no park is needed in the area, a cash dedication is collected. The cash dedication assumes that raw land values at $13,000 per acre. So, we receive $1300 times the number of acres in the subdivision. The dedication can also be park land and part cash. Previous Councils have strongly encouraged staff to take high and dry property for parks rather than lowlands or steep slopes. Minnesota statute authorizes this exaction. The park support fee ($850) is collected together with each building permit as part of the permit fee. These dollars are also used to purchase park equipment, land and for development of park land. We have not changed either of these funding sources for numerous years. The City Attorney is concerned that our present park support fee does not have clear statutory authorization. The City Council should consider revising our method of supporting parks. Such action would require a study which would quantify the parks and trails to be built or rebuilt in the City until 16200 Eagle Creek Ave. S,E" Prior Lake, Minnesota 55372-1714 / Ph, (612) 447-4230 / Fax (612) 447-4245 AN EQUAL OPPORTUNITY EMPLOYER MAYOR AND COUNCILMEMBERS May 19, 2000 The City Council should consider revising our method of supporting parks, Such action would require a study which would quantify the parks and trails to be built or rebuilt in the City until build out based upon the adopted Comprehensive Plan, Development anticipated through build-out would be estimated and a method established to collect the necessary revenues in a fashion authorized by statute. I have attached for your information an example of one such study done for the City of Shakopee. If we were to initiate a study, I would survey other communities prior to issuing a request for proposal. Please be sure to bring your copy of the Capital Improvement Program. I :\FRAN K\MEMOS\COU NCI L \OO\P ARKCI p, DOC ASSOCIATES City Planning Landscape Architecture Park Planning 8 Design Land Use Planning To: Mark McQuillan, Shakopee Park and Recreation Director From: Greg Ingraham, Park Planning Consultant Date: September 25, 1998 Re: Park Dedication Analysis and Recommendations Summary The Comprehensive Park and Trail Plan update and the Park Dedication Analysis show that the City's current park dedication fees will not provide sufficient funds for acquisition and development of the park and recreation facilities needed to serve new development. The existing park dedication ordinance provides a reasonable method for allocating land and fee dedications for parks and trails, however the residential fees are too low and do not reflect the cost of the acquiring and building the park system. The fees are also less than the equivalent value under a land dedication situation. The park dedication analysis is based on creating a "fair share" fee system, where new residential and commercial-industrial development will pay for the cost of new park and recreation facilities needed to serve those developments. Phased park dedication fee increases are recommended to establish the "fair share" relationship. Changes to the fee collection system are also recommended. B:I(~kgl'ound In June, 1997 the City of Shakopee revised its park dedication requirements and fees. The park dedication ordinance and fee schedule calls for new subdivisions to dedicate 10% of the undeveloped land or pay a per-dwelling unit fee for residential or a per acre fee for commercial-industrial propelty. 2659 Dupont Avenue South Suite 100 Minneapolis, MN 55408 (612)377.2500 telephone (612)377.1010Iocsimile The current fees in lieu ofland dedications are: Residential Single-family/Duplex Units Multi-family/Apartment Units Commercial/Industrial Property $900.00 per unit $750.00 per unit $4,500 per acre At the time of the ordinance revision, the City Council said they would review the park dedication fee structure following the update of the City Park and Trail Plan. The Draft Park and Trail Plan is now complete and has been reviewed by the Park Commission and at a recent Comprehensive Plan public hearing. The updated Park and Trail Plan is designed to act as a guide to acquisition and development of parks, trails and recreation facilities for the entire city. Comparison to Other Cities Park Fees A 1997 survey of park dedication fees showed an average fee of$1,188 per single family lot for developing metro area cities. Since that survey several cities have increased their fees to reflect rising land and construction costs. Land Costs According to County records and recent sales, the current average value of undeveloped, unplatted residential land in Shakopee is approximately $30,000-35,000 per acre. Undeveloped, unplatted commercial-industrial land sells for approximately $60,000-70,000 per acre. Relationship of Land Dedication Valoe to Cash Fee 3 <-sol" , ~ Assuming a 10% land dedication, a residential plat would dedicate land valued at I "'CO 00 ! '.-"_-, .," approximately $3,250.00 for each acre of development. Under the current ordinance in a., ,', cash in lieu of land situation ($900 per home), a single family plat, at an average density of 3 'd ,I, '\'\'~ c 2.5 homes per acre, would pay a park dedication fee of $2,250 per acre. -\\-.~ ""'C"""" Ifland dedication were required for a commercial-industrial plat the dedicated land would be valued at $6,500 per acre within the subdivision. In a cash fee in lieu ofland situation the commercial-industrial plat would pay a fee of $4,500 per acre. The existing cash dedication fees for residential and commercial industrial subdivisions are less than the equivalent land dedication value. Park System Cost Relationship to Park Dedication Fees The Park and Trail Plans anticipate the need to acquire and develop the following additional park and recreation facilities (acquisition recommendations list attached): Neighborhood Parks 21 at 5-10 acres each = 195 acres 2 School-City Parks Community Parks 2 2 at 20-30 acres each at 25-40 acres each Total Trails 37 miles 50 acres = 65 acres 310 acres The 3 10 acres of additional park acquisition represent a core park system and does not include trail right of way, special use parks (historic, municipal pool, public golf, civic center, etc.), maintenance facilities or additional open space/conservation parks. Park development costs range from $25,000 to $50,000 per acre depending on the type of park and average around $30,000 per acre. Assuming half of the 37 mile trail system will require land acquisition (the other half would be part of road right of way), approximately 45 acres ofland is needed for new trails. Trail construction cost is approximately $65,000 per mile. Community, City-School and Neighborhood Parks Land Acquisition Development 310 acres 310 acres at $32,500 each at $30,000 each Trails Land Acquisition Development 45 acres 37 miles at $32,500 each at $65,000 each Total Core System Additions Cost Estimate: Residential- CommerciallIndostrial Use = $10.1 million $ 9.3 million $19.4 million = $ 1.5 million = $ 2.4 million $3.9 million $23.3 million It is estimated that 10,000 people currently work in Shakopee. The number of workers in Shakopee is forecast to increase to 14,900 employees by 2020. Approximately nine miles of trail system (25% of new trail network) and 15% of the new park demand are attributable to commercial-industrial development. The 15% park use figure is based on current commercial-industrial use of Shakopee parks (primarily adult leagues and facility reservations) and similar use patterns in other metro area communities. Using the 15% commercial-industrial and the 85% residential proportional ratio the following system costs are attributable to the two land use categories. Total Park and Trail System Additions = $23.3 million Residential Share (85%ofpark + 75% of trail) Comm.lIndustrial Share (15% of park + 25% of trail) = $19.4 million $ 3.9 million 3 Per Household Cost Estimate: $19.4 million/ 8,800 new households = $2,200/household Per Acre Commercial-Industrial Estimate: $3.9 million/l,005 acres new comm.lind plats = $3,880/acre Park Dedication Fee Recommendation Based on this analysis, the existing park and trail dedication fees of $750-900 per dwelling unit for residential land are too low and do not reflect the true cost of acquiring and constructing the park facilities needed for new residential development. An average residential dedication fee of $2,200 per dwelling unit is close to the "fair share" cost of new park system improvements. However, a $2,200 amount would be more than the equivalent value under a 10% residential land dedication situation. The existing $4,500 per acre dedication fee for commercial-industrial land is more than the future park system proportional cost of approximately $3,880 per acre. However, the $4,500 per acre fee is less than the equivalent value under a 10% land dedication requirement ($6,500). Based on this analysis it is recommended that the city revise the park and trail dedication fees to the following levels: Residential Single-family/Duplex Units Multi-family/Apartment Units Commercial/Industrial Property (per acre) Existing Fee $900 $750 $4,500 Proposed Fee $1,800 $1,500 $3,880 The recommended fees are lower that the "fair share" cost. This means that some park acquisition and development costs will need to be financed through a combination of bond referendums and general funds. Due to the magnitude of the proposed fee change, it is recommended that the residential fee changes be phased in over the next three years according to the following schedule; Residential Single-family/Duplex Units Multi-family/Apartment Units 1999 Fee $1,200 $1,000 2000 Fee $1,500 $1,250 2001 Fee $1,800 $1,500 Also, due to the constantly increasing land values and construction costs, the city should revisit the fee structure on a regular (i.e. every one - two year basis). 4 Park Dedication Fee Collection Most cities establish and collect park dedication fees from the developer at the time of final plat approval. The City of Shakopee, establishes the park dedication fee at the time of subdivision approval and collects the fee from the homeowner at the time of building permit issuance. Shakopee's current method has two problems. The fee collection system does not account for inflation. The time between plat approval and building permit issuance (1-1 0 years), results in a lag between the actual cost of acquiring and building parks and the fair share amount paid by the owner. For example, an owner obtaining a building permit in 1998 for a lot within a subdivision platted in 1992 would pay the 1992 rate of$556 instead of the current rate of $900. The fee collection is also unpredictable in any given period. This results in the general public having to subsidize new park development through the general fund. Inefficient administration and collection. The city must determine the correct fee rate for subdivisions of differing years and collect from every individual who obtains a building permit for new construction. This means researching, collecting fees and recording approximately 10,000 payments. Collection on a per plat basis would reduce the number of collections to approximately 1,000 payments (one per subdivision). Collection from the developer would also allow home owners to cover the fee within a mortgage as opposed to a cash payment as part of the building permit. Collection Recommendation It is recommended that Shakopee collect the park dedication fees at the time of final plat approval. This is consistent with most metro area cities and is consistent with the timing of land dedication requirements. This will reduce administrative costs, will allow homeowners to finance fees, and will allow more efficient timing and construction of neighborhood parks. An alternative would be to retain the current collection at permit issuance, but require the payment to be the current per unit park dedication fee. This would insure that the fee more closely reflects current costs. CC: Michael Leek, Community Development Jim Thomson, City Attorney 5 Shakonee Comnrehensive Park and Trail System Needs - New Parks and Trails Community, City-School and Neighborhood Parks Land Acquisition Development 310 acres 310 acres Trails Land Acquisition Development 45 acres 37 miles Total Core System Additions at $32,500 each at $30,000 each at $32,500 each at $65,000 each Cost Estimate: Park Dedication Fees - "Fair Share" Allocation = $10.1 million = $ 9.3 million $19.4 million = $ 1.5 million = $ 2.4 million $3.9 million $23.3 million Using the 15% commercial-industrial and the 85% residential proportional park use ratio the following system costs are attributable to the two land use categories. Residential Share (85%ofpark + 75% of trail) Comm.lIndustrial Share (15% of park + 25% of trail) Per Household Cost Estimate: = $19.4 million = $ 3.9 million $19.4 million/ 8,800 new households = $2,200/hoosehold Per Acre Commercial-Industrial Estimate: $3.9 million/l,005 acres new comm.lind plats = $3,880/acre Based on this analysis it is recommended that the city revise the park and trail dedication fees to the following levels: Residential Single-family/Duplex Units Multi-family/Apartment Units CommerciallIndustrial Property (per acre) Existing Fee $900 $750 $4,500 Proposed Fee $1,800 $1,500 $3,880 Due to the magnitude of the fee change, it is recommended that the residential fee changes be phased in over the next three years according to the following schedule; Residential Single-family/Duplex Units Multi-family/Apartment Units 1999 Fee $1,200 $1,000 2000 Fee $1,500 $1,250 2001 Fee $1,800 $1,500 6 fI.l "C ~ ~ Z e ~ ~ fI.l 00. - . .... = J.... ~ "C = = ~ J.... = ~ ~ > . .... fI.l =~ ~ ..... ..= = ~ J.... 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