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Item No: 04 Meeting Date: May 6, 2019 Type of Business: Work Session City Administrator Review: City of Mounds View Staff Report To: Honorable Mayor and City Council From: Jon Sevald, Community Development Director Item Title/Subject: Discussion of Park Dedication Fees Introduction: A Park Dedication Fee may consist of land or cash charged to a Developer, to be used for capital improvements to parks, trails, and open space. The Fee cannot be used for operations or maintenance. The intent is for the Fee to offset the City's cost of providing park facilities for use by these new residents and new businesses (e.g. Nexus between fee and need).' During the Council's April 1, 2019 Work Session, the Council briefly discussed Park Dedication Fees, directing Staff to conduct further research. Discussion: Mounds View's Park Dedication Fee is 10% of the land, or 10% of the estimated market value (EMV) of the land (or a combination of the two).2 If the project is a re -development in which a Park Dedication Fee was previously collected, then that fee amount is credited toward the new fee. In practice, the City has provided a credit for pre-existing homes, whether or not a previous fee was collected. For example, if one lot is subdivide into two lots, only one fee is charged. Because the cash fee is based on the EMV of land, which can vary widely, Staff have found this difficult to estimate on projects involving multiple properties. For example, on the planned Long Lake Woods Second Addition, the EMV varies between $0.40 and $2.19 per sq ft. Often times, a developer will request a fee estimate prior to submitting subdivision plans, or obtaining plan approval. It is difficult to estimate Park Dedication Fees because of the varying land values. The City of Roseville conducts an annual survey of Park Dedication Fees, finding that most cities charge a flat fee per dwelling unit, or per acre in the case of commercial/industrial developments. It is Staff's opinion that a flat fee for residential projects would be simpler. Attached is a chart comparing Park Dedication Fees of recent Mounds View developments if those projects had been in nearby cities. In summary, Mounds View charges a reasonable fee for single-family developments, a low fee for multi -family, and a high fee for commercial and industrial developments. In considering the Fee, the Council needs to consider the "nexus", between the need (park funding) and the additional demand of new users associated with new development. Strategic Plan Strategy/Goal: MN Statute 462.358, Subd 2(c) (Nexus) 2 In 2004, Ord 745 increased the fee from 5% EMV to 10% EMV for residential subdivisions less than 1-acre. If greater than 1-acre, the fee remained 10%. It is believed the City has charged a park Fee since 1988, and is based on 1980 legislation. The Mounds View Visior A Thriving Desirable Commu tt)