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`.- STAFF REPORT
<br /> Item: Park Dedication
<br /> Agenda Item:8(b)
<br /> Background: The City Council has directed Staff to develop a process or formula to calculate
<br /> Park Dedication Fees. Section 9.1o, Subdivision 2 of the Subdivision Ordinance contains
<br /> provisions regarding park dedication in new subdivisions. Specifically, the Ordinance states the
<br /> following:
<br /> 2. In addition, for every new subdivision of land involving three or more lots which are to
<br /> be developed for residential purposes, the Planning Commission, with the concurrence
<br /> of the City Council, shall require a payment to the City, in lieu of a land dedication for
<br /> conservation purposes or for public use as parks, recreational facilities, playgrounds,
<br /> trails, wetlands or open space, of a sum not to exceed ten percent (io%), of the fair
<br /> market value of the land to be subdivided. The fair market value of the land to be
<br /> subdivided shall be the value as determined by the Crow Wing County Assessor at the
<br /> time of Final Plat approval. The amount of the payment shall be set by the Planning
<br /> Commission,with the concurrence of the City Council,after taking into consideration the
<br /> open space, park, recreational or common areas and facilities which the applicant
<br /> proposes to reserve for public use within the subdivision. Funds received by the City, in
<br /> lieu of land dedication, shall be placed in a special fund in accordance with Section
<br /> 462.358, Subdivision 2b,of the Minnesota Statutes.
<br /> In short, all subdivisions, regardless of the number of new lots being created,are required to pay
<br /> up to 10% of the value of their land if no land is set aside for public parks or open space. The
<br /> Ordinance, as it is currently written, can result in what appears to be incredibly high fee
<br /> requirements for some properties. A lakeshore property valued at $850,000 would require a fee
<br /> of$85,000, even if there are only four new lots created. On the same vain, an off-lake property
<br /> may be valued at only $40,000, but the developer may be creating 4o new lots and only be
<br /> required to pay$4,000 in park dedication fees.As has been discussed over the past year and has
<br /> been brought to the forefront more recently, this method of calculating fees does not appear to
<br /> accomplish, in a fair and consistent manner, the overarching goal of creating and supplying
<br /> parks for the expected increases in population resulting from new land subdivisions.
<br /> Legislation passed in the summer of 2006 has tightened up the requirements for the fees that
<br /> municipalities are able to charge. Minnesota Statutes 462.353, Subd. 4 requires that fees that a
<br /> municipality imposes be"fair,reasonable, and proportionate,and have a nexus to the actual cost
<br /> of the service for which the fee is imposed." Further, Minn. Stat. 462.358, Subd. 2c details that
<br /> "[t]here must be an essential nexus between the fees or dedication imposed...and the municipal
<br /> purpose sought to be achieved by the fee or dedication. The fee or dedication must bear a
<br /> rough proportionality to the need created by the proposed subdivision or
<br /> development."(emphasis added)
<br /> To ensure that the park dedication fees that are collected have a nexus with, and are in
<br /> proportion to, the size of new subdivisions, many communities have moved toward charging
<br /> "per lot"fees,or providing a range of options for dedication.
<br /> L The issue is figuring out what that "per lot" fee should be. The League of Minnesota Cities
<br /> recommends basing the value on how many acres of parkland the City seeks to acquire to meet
<br /> City of Pequot Lakes Staff Report 6-1
<br /> May 17,200'7
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