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HomeMy WebLinkAbout2010-02-03 PACKET 04.J.REQUEST OF CITY COUNCIL ACTION COUNCIL AGENDA MEETING ITEM # DATE 2/3/10 PREPARED BY Community Development Howard Blin ORIGINATING DEPARTMENT STAFF AUTHOR COUNCIL ACTION REQUEST Consider the amount for park dedication fees for 2010. STAFF RECOMMENDATION Maintain the park dedication fee in lieu of land dedication at $4,200 per residential unit for 2010. BUDGET IMPLICATION $N /A $N /A N/A BUDGETED AMOUNT ACTUAL AMOUNT FUNDING SOURCE ADVISORY COMMISSION ACTION SUPPORTING DOCUMENTS ® MEMO /LETTER: Memo from John McCool dated 1/26/10 ❑ RESOLUTION: ❑ ORDINANCE: ❑ ENGINEERING RECOMMENDATION: ❑ LEGAL RECOMMENDATION: ® OTHER: Excerpt from 1/25/10 Planning Commission Minutes ADMINISTRATORS COMMENTS 'City Administrator Date COUNCIL ACTION TAKEN: ESrAPPROVED ❑ DENIED ❑ OTHER DATE REVIEWED APPROVED DENIED ® PLANNING 1/25/10 ❑ ® ❑ ❑ PUBLIC SAFETY ❑ ❑ ❑ ❑ PUBLIC WORKS ❑ ❑ ❑ ® PARKS AND RECREATION 1/11/10 ❑ ® ❑ ❑ HUMAN SERVICES /RIGHTS ❑ ❑ ❑ ❑ ECONOMIC DEV. AUTHORITY ❑ ❑ ❑ ❑ ❑ ❑ ❑ SUPPORTING DOCUMENTS ® MEMO /LETTER: Memo from John McCool dated 1/26/10 ❑ RESOLUTION: ❑ ORDINANCE: ❑ ENGINEERING RECOMMENDATION: ❑ LEGAL RECOMMENDATION: ® OTHER: Excerpt from 1/25/10 Planning Commission Minutes ADMINISTRATORS COMMENTS 'City Administrator Date COUNCIL ACTION TAKEN: ESrAPPROVED ❑ DENIED ❑ OTHER CITY OF COTTAGE GROVE MINNESOTA TO: Honorable Mayor and City Council Ryan Schroeder, City Administrator FROM: John McCool, Senior Planner DATE: January 26, 2010 RE: Park Dedication Fees Proposal The City's park fee in lieu of land dedication is currently in the amount of $4,200 per residential unit. This fee was based on land values in 2007. Land values have not increased since that time, and it is recommended that for 2010 the park fee remain unchanged. Commission Comments Parks, Recreation and Natural Resources Commission The Parks, Recreation, and Natural Resources Commission discussed the City's park fee at their meeting on January 11, 2010, The Parks Commission agreed that the economy has im- pacted new growth in the city and that the park fee in lieu of land dedication should not increase at this time. The Commission unanimously voted to recommend that the park fee in the amount of $4,200 per residential unit remain the same. Planning Commission The Planning Commission discussed the park fee at their meeting on January 25, 2010. The Commission recommended that the current park fee in lieu of land dedication remain at $4,200 per unit. The Commission discussed the relationship of declining land values and the park fee as well as the effect of the fee on development. The Commission suggested re- evaluating the fee in one year. • State Statute 462.358 provides cities the authority to require land dedication for park purposes as part of approving the subdivision of property. The statute allows a "reasonable" portion of the subdivision to be dedicated for parks. State courts have determined that a land dedication of 10 percent of the total area of the subdivision is a reasonable amount. Most cities in Minnesota have adopted this 10 percent land dedication requirement in their subdivision ordinances. Where park land is not needed in a subdivision, the statute allows cities to charge a fee in lieu of a land dedication. These fees are based on the on the value of unimproved land. This is the value prior to subdivision into individual lots and the construction of streets and utilities. Honorable Mayor, City Council, and Ryan Schroeder Park Dedication Fees January 26, 2010 Page 2 of 2 As with most cities, Cottage Grove determines a fee for individual housing units in a develop- ment. The fee charged for single - family residential subdivisions is based on the following formula: Average 10 % allowable _ 2.5 units per unimproved X land dedication) acre = Fee per lot land value The current fee is $4,200, which is based on a land value of $105,000. This amount was adopted by the City Council in April 2007. In December 2008, the City Council decided not to increase the park fee in lieu of land dedication because construction of new houses and resi- dential development had declined for the last three years. Fees in Other Cities For purposes of comparison, park fees collected by other cities in the metropolitan area are shown below. This survey was prepared in October 2009. Of the 15 cities surveyed, the City of Woodbury is the only city that increased their park fee for 2010. Cottage Grove's park fee is about in the middle of what other cities charge. "Cities in order of residential fees highest to lowest. • ii.'11 11 • • That the City Council not change the $4,200 per residential unit park fee in lieu of land dedica- tion for 2010. Residential Commercial City 2009 2010 % Change 2009 2010 % Chan e Plymouth $6,500 /unit $6,500 /unit 0% $8,500 /acre $8,500 /acre 0% Bloomington $6,500 /unit $6,500 /unit 0% $838/1,000 sf $838/1,000 sf 0% Eden Prairie $6,000 /unit $6,000 /unit 0% $11,000 /acre $11,000 /acre 0% Maple Grove $5,455 /unit $5,455 /unit 0% $11,000 /acre $11,000 /acre 0% Shakopee $5,340 /unit $5,340 /unit 0% $6,930 /acre $6,930 /acre 0% Brooklyn Park $4,600 /unit $4,600 /unit 0% $7,600 /acre $7,600 /acre 0% C:66'6`G>b�e" � : ,, `44;2flUlt} tit : � 14,2007ui�'E ..�k �� 4 %Pairl�kt: Va7us: �4loFairMkt:�% ue` `;.r4 Champlin $4,200 /unit $4,200 /unit 0 $8,000 /acre $8,000 /acre 0% Inver Grove Heights $4,011 /unit $4,011 /unit 0% $6,200 /acre $6,200 /acre 0% Ham Lake $3,000 /unit $3,000 /unit 0% $0 $0 0% Woodbury $3,000 /unit $3,600 /unit 20% $6,000 /acre $6,000 /acre 0% Andover $2,944 /unit $2,935 /unit < -1% $8,944 /acre $8,935 /acre < -1% Blaine $2,435 /unit $2,435 /unit 0% $7,163 /acre $7,163 /acre 0% Coon Rapids $2,000 /unit $2,000 /unit 0% $5,000 /acre $5,000 /acre 0% New Brighton $1,550 /unit I $1,550 /unit 0% $12,278 /acre $12,278 /acre 0% "Cities in order of residential fees highest to lowest. • ii.'11 11 • • That the City Council not change the $4,200 per residential unit park fee in lieu of land dedica- tion for 2010. EXCERPT FROM UNAPPROVED MINUTES OF THE JANUARY 25, 2010 PLANNING COMMISSION MEETING 6.5 Park Dedication Fees Discussion on if the City should increase park dedication fees. McCool summarized the staff report and asked for input from the Planning Commission. He stated that the Parks, Recreation and Natural Resources Commission reviewed the park fees and recommended that the $4,200 park dedication fee should remain the same for 2010. Messick asked what the current value for unimproved land is. Blin responded that because there have been no recent land sales, it is very difficult to determine what that is. Rambacher asked if Woodbury, which charges $3,600 a unit, uses the same calculation we are using. Blin responded that the city does not know how they calculate their fees; they've been behind the curve of other cities for years. Rambacher asked if Woodbury's park dedi- cation fee is more advantageous for developers to build, if the park dedication fees could be part of the reason that the development that was extended earlier has not started yet, and if the park dedication fees are a large portion of the city budget. Blin explained that state statute allows cities to require that anyone subdividing land set aside 10 percent of that land for park purposes, which is how most suburban communities have acquired land for park systems. State statute also says that in lieu of a land dedication, cities may require a cash contribution. Once those funds are paid, they go into a park trust fund and by statute can only be used for land acquisition and park development purposes; they can't even be used for park operations. Rambacher asked if the amount charged for commercial land is in line with other cities. Blin responded that Cottage Grove's fee is a little more conservative than other cities. Rambacher asked if the park fees are a hindrance for development. Blin responded that he does not believe it is. A study of our development fees was done a year ago and they compare favorably with other cities in terms of having lower fees in most cases. Thiede noted that the cities surrounding Cottage Grove have lower park dedication fees and asked if staff thinks that the park dedication fees would potentially steer developers into other areas before they come to Cottage Grove. Blin responded he does not believe so; this is a relatively small part of development costs. Pearson asked how much is in the park trust fund. Blin responded about $600,000. Willhite noted that the developers are given the option of dedicating part of their land for parks, and in most cases, they have opted to pay the money. Rostad noted those fees are ultimately passed on to the consumer; the developer pays for it up front. Rambacher asked if there was any discussion on lowering the fees. Blin responded yes but given this uncertainty as to what land values are, the city does not want to come up short. He stated that next year they may be more concrete data. He also noted that the City has been very conservative in calculating average land values in the past. Messick asked about an ordinance to tie park dedication fees to whatever the annual survey says. Blin re- Excerpt from Unapproved Planning Commission Minutes Park Dedication Fees January 25, 2010 Page 2 of 2 sponded that in the past the city surveyed land sales to come up with an average price, but there have been no land sales recently. Rostad stated that probably means there has been a significant decline in the value of land. Messick believes that once a fee or tax is estab- lished, it will never go down. However, he would urge that fee stay the same since there is no new data. Rambacher asked if the park dedication fees are reviewed annually. Blin re- sponded yes. Willhite asked if there is more of benefit for developers to dedicate land than to pay park dedication fees. Blin responded that it depends on where the land is. He explained that the city has a master park plan and if a development includes one of those parcels, the city would want it dedicated. Rambacher asked if the city is satisfied with the current number of parks. Blin responded that Cottage Grove has a fairly robust park system currently, which is due to decisions the city made 20 to 30 years ago to acquire land. We have more parkland per capita than what is recommended. We will have to continue to acquire parkland as new development occurs. The goal is to have all lots within a quarter of a mile of a neighbor- hood park and a half mile from a community park. Willhite commented that our park system is one of the things that are attractive in our community and parks are good selling points for developments. Rambacher made a motion to maintain the current park dedication fee of $4,200. Thiede seconded. Motion passed unanimously (7 -to -0 vote).