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10. Discussion on Park Dedication fees Staff Report Date of Meeting: February 7, 2018 To: City Council From: Neil Soltis, Administrator Re: Deferred Park Dedication Fees Background: During the discussion regarding funds for park improvements at the September Council work session the issue was raised about previous actions by the Council in approving a minor subdivision to allow the payment of the park dedication fees to be deferred. Councilmember Schneider requested further discussion on the deferrals. The development code does provides for the deferred payment of fees for future phases of a subdivision or for outlots subject to the payment in the future when the lands are replatted or final plats are approved. In looking at the deferrals it is also relevant to look at the findings for the park dedication fee in the development code which speak to new development creating a need for new parks, open spaces, and trails and the need for new developments to share a rough proportion of the burden that will be placed on the parks. Resolution 03-19-13-06 - The fee was deferred on this outlot with the condition that the outlot not be developed for residential use at this time, and that the p roposed use of outlot will be recreation. The development agreement indicates that the park dedication fee of $3, 000 shall be waived based on the proposed use of the outlot, and that the City shall require payment of the fee in the future if the lot is a pproved for development. This is consistent with the language in the development code and appropriate based on there being no additional burden placed on the parks. Resolution 08-20-13-02 – In this instance approval was given to subdividing the existing 33.2 -acre parcel and 1. 79 –acre outlot into 2 parcels, a 10. 1 acre parcel (lot 1) and the existing 25 acre parcel. The park fee is due when a building permit is issued for lot 1; however, prior to that occurring the developer or property owner would need to extend the street and construct a cul-de-sac. The basis for deferral in this circumstance is not as clear. One could argue that the lot cannot be developed until the street is extended; however the same logic could be used for any subdivision. In preparation for the discussion at the February Planning Commission meeting Sherri and I have identified certain legal issues that will impact the decision and the direction previously provided by the Council based on the following: Minnesota Stat. 462.357, Subd. 2c. Nexus. (a) There must be an essential nexus between the fees or dedication imposed under subdivision 2b 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. Interpretation of this language raises the following questions: 1. Outlots - Outlots have been created in some recent subdivisions, and the subdivisions included conditions that the outlots could not be developed for residential use. Based on the statutory authorization for dedication , can a park dedication fees be charged for outlots? 2. Lots created under Section 1, item 1.5 (1) of the Subdivision Ordinance - This section says that the Subdivision regulations do not apply to any division of land into two or more parcels where all parcels resulting from the land division exceed 20 acre in size and have 500 feet of frontage on a public road, and that subdivision approval is not required for such lo ts. Since the Park Dedication requirement is part of the Subdivision requirements, are lots created under this section exempt from the park dedication requirement? 3. Subdivisions where one of the parcels has an existing home on it. - The City has approved many subdivisions where a lot has an existing home on it, and the lot is divided to create two or three parcels, one of which includes the existing home, and the others would be sold for development of new homes. In the past, the City has not charged th e park dedication fee for the parcel with the existing home, based on the following considerations: 1) the lot with the existing home will not be creating any new demand for parks, and 2) the City may have charged the park fee for the existing lot at the t ime when it was created in the past if it was part of a subdivision. Can an existing parcel without a residential use be charged a fee when a house is constructed if it can be verified that park dedication was not charged previously when the lot was created? Does that conflict with the statutory authorization fo r park dedication?