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Memo:Park Dedication,01/30/07 Page 2 of 6 municipalities are able to charge. Minnesota Statutes 462.353, Subd. 4 requires that fees that a municipality imposes be"fair,reasonable,and proportionate,and have a nexus to the actual cost of the service for which the fee is imposed." Further, Minn. Stat. 462.358, Subd. 2c details that "[t]here must be an essential nexus between the fees or dedication imposed...and the municipal purpose sought to be achieved by the fee or dedication. The fee or dedication must bear a rough proportionality to the need created by the proposed subdivision or development."(emphasis added) To ensure that the park dedication fees that are collected have a nexus with, and are in proportion to, the size of new subdivisions, many communities have moved toward charging "per lot"fees,or providing a range of options for dedication. The issue is figuring out what that "per lot" fee should be. The League of Minnesota Cities recommends basing the value on how many acres of parkland the City seeks to acquire to meet the needs of residents in the community. Typically, a City would initiate a parks planning process to study the recreation opportunities available and needed within the City, and then adjust Ordinances from there. The City can also use a simplified calculation based on estimates provided through various sources.The Staff recommends that the City,at some point in the near future,update and clarify the following process with a full parks and open space plan. Basic Park Needs Analysis 1. The standards indicate that rural communities with a good supply of recreation opportunities tend to have 12 — 15 acres of city parkland per 1,00o residents. Given the recreational character of the community,this analysis will use the standard of 15 acres of city parkland per 1,00o residents. 2. The City of Pequot Lakes has 1,956 year-round residents, according to the State Demographic Center for 2005 population estimates. Based on the standard listed above, the City should have approximately 29.34 acres of city-owned parkland available to serve the needs of current residents. 3. Within the City, there is currently roughly 29 acres of city-owned parkland available. (This was based off a quick estimate of city-owned properties.The acreage may be higher or lower than this.)It appears that the City is on par with meeting the acreage needs for existing year-round residents. 4. The per capita share of the total parkland goal should be calculated next. 29 acres/1,956 residents (population) = 0.015 acres per resident.This ratio assumes that all parkland is for residential uses and purposes. A park and open space plan would study the use of existing parks and determine what percentage of the use is attributed to residences and what proportion is attributed to commercial uses (such as employees eating on lunch break,business-sponsored softball leagues,etc.). 5. Incorporate the result from Step 4 into the Ordinance. The amount of land to be dedicated as part of residential subdivision or plat will be equal to the per acre residential share (0.015 acres) times the number of residents expected in the development or subdivision. 6. To calculate the park dedication fee in lieu of land dedication, the amount of land dedication required is multiplied by the per acre value of undeveloped land in the City. An analysis of undeveloped land in the City shows that the per acre value of undeveloped land is roughly $32,000, representing the median value of the land (half of the land is valued higher and half is valued lower).The average value of all undeveloped land in the City is $68,978, but this value includes high-valued lakeshore properties that the City is unlikely to seek to acquire for park purposes and that skew the average much higher when the majority of the properties have a much lower value. 14084 Baxter Drive, Suite 7 1 Baxter, Minnesota 56425 1 218.828.3064 1 www.communitygrowth.com