6.1. PRSR 12-09-2015 Request for Action
River
To Item Number
Parks and Recreation Commission 6.1
Agenda Section Meeting Date Prepared by
Discussion Item December 9,2015 Michael Hecker,Parks and Recreation Director
Item Description Reviewed by
Park Dedication Fees Zach Carlton,Planning Manager
Reviewed by
Action Requested
Discussion of Park Dedication
Background/Discussion
At the November 16,2015 City Council Work Session,Planning Manager Zach Carlton presented
recommendations for changes to the city's park dedication fees. This was following a park dedication
discussion at the October 19,2015 City Council Work Session. City Council directed staff to provide the
same presentation to the Parks and Recreation Commission.
Financial Impact
Changes to the amount of park dedication collected.
Attachments
• Staff Reports to City Council dated November 16 and October 19,2015
re- 1E8 ( i sr
NATURE
CI of
Request for Action
' ver
To Item Number
Mayor and City Council 9.2
Agenda Section Meeting Date Prepared by
Work Session November 16,2015 Zack Canton,Planning Manager
Item Description Reviewed by
Park Dedication Fee Update Cal Portner,City Administrator
Reviewed by
Action Requested
Provide direction on the preferred method to calculate park dedication.
Background/Discussion
At the October 19,2015,City Council Work Session,Rita Trapp of Hoisington Koegler Group,Inc.
(HKGi)presented recommendations for changes to the city's park dedication fee. The proposed changes
to the fee schedule are to ensure compliance with state statute by linking the fee to the fair market value
of the property. Staff reviewed eight different options,based on land value,which could be used to
establish the fee and decided to use the county appraised value due to the low cost(free),ease of
administering, and is a generally accepted method in the planning and development community.
The alternative techniques evaluated closely were an appraisal study completed by an outside firm to
establish a value for different land classes or requiring the developer to pay for an appraisal prior to final
platting. The first option was not preferred as it would cost the city between$3,500 and$10,000. The
study can be paid for with park dedication fees,but it will need to be updated periodically (every 3-5
years) to verify the fee is still a fair valuation of the land. The second option was not recommended as it
adds another cost(beyond the park dedication fee itself) and additional time to the development process.
The presentation by HKGi indicated a likelihood that the amount of money collected by the updated fee
would decrease,but the size of the decrease cannot be identified with certainty. Council directed staff to
review park dedication fees that have been collected over the past few years to get an idea of how much
lower the park dedication fees would be with the recommended approach of using the county assessed
value.
Staff reviewed 15 residential plats,five commercial developments, and six industrial developments from
2006 to present A couple of the projects never came to fruition and a few are projects in concept review
or are vacant property. The 2015 county assessed land value was used for comparing the current per unit
fee to the proposed percent of value fee.
Comparison Spreadsheet
Residential
Using our current park dedication fee schedule process,we collect an average of 29%of the assessed
value on residential properties. Staff's recommendation is to collect 10, 13, or 16% (based on density)of
the value of the property being developed,or an equal portion of land for park purposes. Although this is
10 II IN lite IT
Template rpdated 4/14 NATURE
a significant reduction,the goal of evaluating our current dedication rate is to establish a rational
connection between park dedication fees collected and the fair market value of the land.
Commercial/Industrial
Using our current park dedication fee schedule we collect 8%and 6%of the assessed value on
commercial and industrial development respectively. Utilizing the proposed 10%calculation will
increase,on average,the amount of park dedication for commercial and industrial developments.
Planning and economic development staff does not believe the city should increase the amount of park
dedication for developments that have less impact on our park system than residential development.
Alternatives
If the City Council is not comfortable with using the county appraised value, staffs recommended
alternative is to have an appraisal study done to establish a fair market value (per acre) for four land
classes. Staff recommends low-density residential,high-density residential,commercial,and industrial.
There are different ways the fair market value can be used to establish the fee and if the Council desires
to move m this direction staff will explore options.
Regardless of the method used to calculate the park dedication fee,the city will likely experience a
decrease in the amount of money collected. The goal of reviewing the fee is to ensure compliance with
state statute and base the fee on the fair value of the property. Planned expansions to the parks system
cannot be funded wholly by the park dedication fee,and alternative funding sources will need to be
identified.
Financial Impact
Changes to the amount of park dedication collected.
Attachments
II Park Dedication Comparisons
• Staff Report to City Council dated October 19,2015
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.ceirt
Request for Action
River
To Item Number
Mayor and City Council 9.1
Agenda Section Meeting Date Prepared by
Work Session October 19,2015 Michael Hecker,Parks and Recreation Director
Item Description Reviewed by
Park Dedication Fees Cal Portner,City Administrator
Reviewed by
Action Requested
Discussion of Park Dedication Ordinance language.
Background/Discussion
Based on City Council direction in june 2015, staff worked with HKGi to update the city's Park
Dedication ordinance.
'This work provided includes potential approaches for the determination of Park Dedication and
recommended revisions to the City Code.
HKGi Planner Rita Trapp will lead a presentation with City Council on recommendations and updates to
the city's Park Dedication Ordinance
Financial Impact
N/A
Attachments
• HKGi Update Memo on Park Dedication
r-satits IT
Template Updated 4/14 NATURE
MEMORANDUM Hoisington Koegler Group Inc.
111111
To: Elk River City Council and City Staff
From: Rita Trapp AICP
Subject: Update on Park Dedication Study
Date: October 14,2015
As was directed at the June 15`x'City Council Work Session,HKGi has been working with City Staff on
evaluating potential approaches for the determination of park dedication and recommended revisions to
City Code Sections regarding park dedication.
Park Dedication Rates
Residential Dedication Rote
As was identified in the initial park dedication review,the City currently has one park dedication rate for all
residential densities.Given the difference in need and impact of the various types of residential development,it
is recommended that the City use a graduated system for its park dedication rate.As shown in the previous
PowerPoint presentation,the residential park dedication rates in other communities vary between 10'%and
20%with a few outliers in some communities.
The following table was developed to illustrate the amount of park land needed to serve medium and high
density housing developments and the corresponding percentage of park dedication that would need to be
required to meet this need.The analysis uses the National Recreation and Park Association standard of 10 acres
per 1,000 people.It also assumes that medium density projects like townhomes have 2.25 people per unit and
multifamily projects like apartments have 1.75 people per unit.
Density Acres of Dedication
Type ofParkland Rate
(unit h per
Development Name Acres acre) Units People Needed Needed
Townhome Kliever Lake Fields 17.3 4.8 83 187 L9 11%
Townhome Trout Brook Condominium 21.9 5.3 116 261
Townhome Woods at ER Station 34.7 8.6 298 111311111111311111 19%
Multi-Family Coachman Ridge 4.8 24 116 203 ® 42%
Staff recommends that the City establish a park dedication rate based on density ranges rather than zoning
districts.This is recommended because different densities can occur within the same zoning district The
following chart shows Staffs recommendation based on the analysis and comparisons with other communities.
Density Units per Acre Park Dedication Rate
Low Under 4 units/acre 10%
Medium 4 to 7 units/acre 13%
High More than 7 units/acre 16%
123 North Third Street,Suite 100,Minneapolis,MN 55401-1659
Ph(612)338-3800 Fx(612)338-6838 www.hkgi.corn t
Page 2
Commercial and Industrial Dedication Rate
The City currently has a park dedication rate of ten(10)percent for commercial and industrial properties.As
was noted in at the June City Council Workshop,the park dedication survey HKGi completed this spring found
communities had park dedication rates ranging from two(2)to ten(10)percent with half using 10%.It is
recommended that the rate be maintained at 10%at this time.
Method of Cash in lieu Dedication
The fol lowing table was developed to provide an overview,as well as the pros and cons of each potential
method for collecting cash in lieu of a land dedication.
Method ON ciN ice% Pray ('oils
Set based on Use the fees set by other • Easy to implement • May not be reflective of real
neighboring communities as the basis for • Ensures City is estate market
communities the fee in Elk River competitive • Potential for legal challenge
as does not meet state
statute requirements
County Assessors Use estimated market value of • Easy to identify • Lags behind marketplace so
Value the land for fee collection • Generally accepted may collect too much or too
method little
Appraisal Study Hire an appraisal firm to • More accurate to • Study estimated to cost
-- - conduct a study evaluating the market conditions $5,000 to$15,000 depending i
__. average market value of vacant • Established fee that on the number of classes and
properties by dass.The study developers can be firm selected
would take about 2 to 3 certain of • Potential for market lag
months to complete and could depending on the frequency
be paid for from park that City conducts study f
dedication.This would be used
to set the fee amounts.
Require appraisal Require that the developer • Establishes fee at • Adds time to development
at time of submit an appraisal as part of exact land value process
development the final platting process.Fee • Reflects each unique • Additional cost for developer
collection would then be based situation —one firm estimated an i
5
on that value. appraisal to cost$2,500+for i
commercial/multi-family i
projects
Sale Price of Require that the developer • Relatively simple to • May not include value gained
Property provide the sale price of the implement through entitlement process
property and use that value for • Sale may have occurred a
fee collection. significant time ago i
• Potential for developers to
manipulate
Negotiation Require that each park • Uncertainty for • Potential to be challenging to
dedication fee be agreed to developers come to an agreement
through negotiation between • Starting point will still need
the developer and the City. to be established
• Staff time
• Potential for legal challenge
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Method ON&rs ieNN Pros Carts
Allow developer Allow developer to select • Provides more legal • Will end up with lowest
to select from whether they want to use the protection as amount of park dedication
options park dedication fee or submit developers have possible.Impact depends on
an appraisal opportunity to select options provide.
preferred option
Require'higher" List multiple options and • Best potential to • Potential for legal challenge
of multiple require the one with the maximize park remains if options are not
options highest park dedication dedication with the based on market realities
amount be selected least amount of • Adds time and cost to
effort by City developer
City Staff and HKGi did attempt to quantify the difference between the various methods.However,the City
does not have enough example appraisals to do such a comparison.If such a comparison is desired,the City
may want to consider conducting an appraisal study as was described in the third option.Such a study would
cost between$5,000 and$10,000 and take two to three months to complete.
City Staff has considered all of the options and recommends that the City Council use the County Assessors
Value to estimated market value of the land for the collection of cash in lieu of the land dedication. Staff
recommends this method as it is the easiest to administer and is generally accepted in the planning and
development community.
Recommended City Code Revisions
Once direction is received from the City Council regarding the industrial park dedication,residential park
dedication,and methodology for the cash dedication,proposed ordinance amendments will be developed.City
Staff did review all of the references to park dedication to identify any additional changes needed.This review
identified the following needs:
1) As shown below the section regarding the use of the cash dedication specifically references the
payment of funds for trails.The City does not have a trail fee,nor does it intend to require fees
for trails.Thus, it recommended that the sentence be struck to eliminate any confusion.
Sec.30-327..-Dedication of land or contribution of cash for public purpose
(e) Use of cash contributions. Any monies paid to the city in lieu of park dedication shall
be placed in a special fund and used only for the acquisition of land for parks,
playgrounds, trails, and public open space; for the development of such areas and sites;
and for debt retirement in connection with land previously acquired or developed for
such public purposes. Any monies specifically paid to the city for trails shall be used only
for the acquisition of land for trails and for the development of such land.
2) Currently the City Code requires that as part of the development process the Parks and
Recreation Commission advise the City Council on the acquisition of land.The vision identified in
the recent Parks and Recreation Master Plan is that the City will be emphasizing larger,
community parks rather than smaller,neighborhood parks over the next 20 years.To support
that vision,it is anticipated that more park dedication will be collected through the cash fee
rather than through land acquisition. Because the Parks and Recreation Master Plan provides
Page 4
clear direction regarding when park land is the preferred form of park dedication,Staff is
recommending that all references requiring Packs and Recreation Commission involvement in the
platting process be removed.Staff will continue to make a recommendation regarding park
dedication to the City Council and will use the Park and Recreation System Master Plan as a guide.
3) As shown below,the Open Space Preservation Plats requirements include specific provisions for
park dedication.Staff has reviewed that section and recommends that it be stricken.The
approach for park dedication for these plats will be the same as other residential plats.
Ser.30-515
(4)Park dedication fee requirements.Park dedication fee requirements shall be based
upon the total number of house lots platted if fees are paid in lieu of land.