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COMMUNITYGROWTH MEMORANDUM To: City of Pequot Lakes Park Board From: Lisa Barajas,City Planner Date: January 29,2007 Re: Park Dedication The Park Board has struggled with making recommendations on park dedications for new subdivisions as the Ordinance does not provide clear guidance. The Ordinance contains a provision that limits the fee required to no more than io% of the current market value of the land as estimated by the County Assessor's office. Issues, however, have arisen when subdivisions include lands set aside for parks and open space.The resulting park dedication fee has been difficult to determine and has resulted in confusion on both the City's part and the developer's part. To avoid future confusion,but to also ensure that park dedication fees are applied in a fair and consistent manner,this memo will explain the background regarding recently passed legislation, a methodology for determining park dedication,and options for moving forward. Background Section 9.1o, Subdivision 2 of the Subdivision Ordinance contains provisions regarding park dedication in new subdivisions.Specifically,the Ordinance states the following: 2. In addition, for every new subdivision of land involving three or more lots which are to be developed for residential purposes, the Planning Commission, with the concurrence of the City Council, shall require a payment to the City, in lieu of a land dedication for conservation purposes or for public use as parks, recreational facilities, playgrounds, trails, wetlands or open space, of a sum not to exceed ten percent (io%), of the fair market value of the land to be subdivided. The fair market value of the land to be subdivided shall be the value as determined by the Crow Wing County Assessor at the time of Final Plat approval. The amount of the payment shall be set by the Planning Commission,with the concurrence of the City Council,after taking into consideration the open space, park, recreational or common areas and facilities which the applicant proposes to reserve for public use within the subdivision. Funds received by the City, in lieu of land dedication, shall be placed in a special fund in accordance with Section 462.358,Subdivision 2b,of the Minnesota Statutes. In short,all subdivisions,regardless of the number of new lots being created,are required to pay up to io% of the value of their land if no land is set aside for public parks or open space. The Ordinance, as it is currently written, can result in what appears to be incredibly high fee requirements for some properties.A lakeshore property valued at$850,000 would require a fee Of$85,000, even if there are only four new lots created. On the same vain, an off-lake property may be valued at only $40,000, but the developer may be creating 4o new lots and only be required to pay$4,000 in park dedication fees.As has been discussed over the past year and has been brought to the forefront more recently, this method of calculating fees does not appear to accomplish, in a fair and consistent manner, the overarching goal of creating and supplying parks for the expected increases in population resulting from new land subdivisions. Legislation passed in the summer of 2oo6 has tightened up the requirements for the fees that