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051199 PK CC JT MIN CITY OF SHOREWOOD 5755 COUNTRY CLUB ROAD PARK COMMISSION/CITY COUNCIL COUNCIL CHAMBERS JOINT MEETING 7:00 P.M. TUESDAY, MAY 11, 1999 MINUTES 1.CONVENE PARK COMMISSION /CITY COUNCIL MEETING Co-Chair Arnst called the meeting to order at 7:07 p.m. A. Roll Call Present: Co-Chairs Dallman and Arnst; Commissioners Puzak and Themig; Mayor Woody Love, Council Members Stover and Garfunkel; Administrator Jim Hurm; City Engineer Larry Brown Absent: Commissioners Colopoulos and Bensman; Council Members Lizée and Zerby B. Review Agenda There were no changes to the agenda. 2. DISCUSS PARK DEDICATION FEES This work session was called as a result of Commissioner Dallman’s report to the City Council following the March 23 Park Commission meeting where the Commission had discussed and recommended an increase in the Park Dedication Fees. Mayor Love stated that the City Council wished to revisit the recommendation. He added that the two concerns are: defining the needs, and; if we have a need, should it be based on a high impact fee with so few lots available for development. Council Member John Garfunkel noted his concerns over the amount of discussion about neighboring communities’ fees. He asked what the increase would mean dollar wise and what is the actual need. Just doing it because we can is not a good policy. He also stated that this is one more expense that can reduce a property’s affordability. Commissioner Themig explained that the initial discussion came up earlier in conversation about needs for Freeman Park and he agreed that a lot of conversation did involve other municipalities. He said it was a mistake not to include the issue of need in the discussion with the recommendation. Commissioner Dallman said there were about 300 buildable lots in the city, which at the present rate that would add an average of $3,000 for parks per year for 10 years. When it’s gone, it’s gone. Park Commission/City Council Meeting Tuesday, May 11, 1999 Page 2 Commissioner Puzak added that the discussion to raise Park Dedication fees followed two sessions of “sticker shock” over what it would cost to put in a scaled down bathroom facility at Freeman. That is just one item in a single park and it would have depleted all funds. It was depressing to see that all funds would be spent on just the first item of the wish list. Council Member Stover asked if other funding resources were discussed. Puzak said that the timing of a decision about Park Dedication fees is sensitive with the development of the Senior Housing property. The Park Commission had considered that one of the alternative ways to get a concession/restroom/storage facility is to see if the developer would build it in lieu of paying a fee, since his cost to build the structure would likely be half of what the City would pay to contract it out. Council Member Stover asked if a long term funding solution had been discussed. Puzak replied that the practice that had been followed for about 5 years is of collecting user fees, which would only cover maintenance and some minor amenities. Dallman added that the role of the Park Foundation is fund raising and this is also being discussed. The Park Commission is just in the process of identifying a policy on park user fees, but large expenses (such as re-building soccer fields, etc.) will also need to be addressed. Co-chair Arnst summarized that the Park Commission knows that funding through Park Dedication Fees is running out. User fees are not offsetting our costs. With that in mind they knew they needed to do something about rising costs and depleting resources. The Commission would not be in disagreement of other ideas. Mayor Love recommended looking at sustainability and offered a suggestion. Since Shorewood is running out of undeveloped property, a better solution might be a small impact fee charged at the point of turnover of any property within the City. Depending on legislative authority, the City could attach a fee at the time of homesteading. If it were a percentage of the sale price, it would ride with inflation. Stover said it is an on-going resource, which is why it peaks her interest. Dallman sited the example of Hilton Head, which imposes a title transfer fee tax. Love added that in terms of building amenities (not the general fund), it may be a good idea. Administrator Hurm said there is the Operating Budget and Capital Improvement Fund. This would be a third funding category. The big question for parks is depreciation now that the huge needs aren’t there as much since the parks are essentially developed. The Operating Budget can cover operating costs and the CIP is for improvements. Puzak noted that part of this discussion is because of a need for trail funds. There have been two walks so far with positive support, yet funding is not determined. Part of the reason for the increase was to meet a need for trails. The need is developing and there is strong support in at least two trail segments. Stover asked if the cost of a trail is known. Park Commission/City Council Meeting Tuesday, May 11, 1999 Page 3 Puzak said no, because it will depend on individual project needs for landscaping, dealing with obstacles, etc. Puzak added that, while Shorewood is approaching a mature development phase, it is at an immature capital amenities phase (i.e. no public flush toilet at any park). He said the other point is in the data and a survey, which indicate that people do support parks and feel they have a high value in the community. Themig noted that they also said Shorewood has adequate park space. Enhancements and sustaining amenities are now the main concern. Mayor Love sited the example of Excelsior, which is completely developed and relies on income from other sources for park costs. One funding source is through parking fees. There was some discussion about how that may work for Shorewood. Council Member Garfunkel agreed that this is a good time to look for other options. Puzak pointed out that, when spread over a 30-year mortgage, the additional park dedication fee is very affordable. Dallman added that affordable housing is wiped out already because of the cost of lots in Shorewood. Mayor Love said he has never been against impact fees. His concern is that the proposed increase is a hefty amount. Puzak countered that, without an increase, the City would run out of park improvement funds after buying the last key amenity at Freeman. Garfunkel said that even a million dollars isn’t going to go far. This aside, there has to be another solution. Co-chair Arnst summarized that it seems the Council is not comfortable with what the Commission has come up with and that they need to explore other options. Mayor Love said they are not comfortable with the large increase. This matter, however, has captured the Council’s attention, not just about the fees, but about the problem of limited funding for parks. Engineer Brown read notes from City Planning Director, Brad Nielsen. The statutes that allow the City to impose impact fees gives authority to base the amount on a percentage of the value of raw land not developed land. Each parcel would require an assessor’s appraisal. A newly created lot has little to offer until after it is divided. It would be tough for staff to advise on the cost, based on value. Puzak said this adds to a whole different number. It is a technical issue that would net less money, depending on the situation. Brown suggested that if the City uses a percent system, then limit it to division of 3 lots or more. When less than 3, use a flat fee. Arnst pointed out that this is still not addressing sustainability, even if we change this policy. Stover added that the City needs to find a way to add to park funds after all of the land is developed. Garfunkel had another concern as a property owner with the fairness of a sudden change from $1,000 to possibly $7,500 for park dedication fees. Commissioner Themig asked if the Council would favor an increase of any kind? Mayor Love suggested that if averaged out, $1200 to $1500 is fair. Stover added that the present Park Commission/City Council Meeting Tuesday, May 11, 1999 Page 4 fee amount has been the same for a while and she does not object to a small increase because of inflation, etc. Garfunkel agreed. Arnst brought up the point that the initial motion was for a flat fee of $1500. Mayor Love said that amount doesn’t send up alarms, but we still have to role up our sleeves to come up with a long term funding solution. Arnst suggested checking into turnover fees and parking stickers for non-residents. Love said that $5 for a parking sticker is not too high. Hurm said the practicality of that idea is questionable. And Themig added that Shorewood parks are not a destination point like Hennepin Parks or the lake. Our parks are more of a basic service we should be providing. Puzak said from coaches’ perspective, it becomes a problem of kids being dropped off. Arnst said a parking fee is still something to explore. Puzak asked about increasing funding to parks from the general fund. Hurm said it is at zero for this year, but will hopefully go to $10,000 after that. Puzak said we have zero ability to raise money and asked for change in the zero funding from the General Fund if we can’t see a change in Park Dedication fees. The other thing is: if we don’t fund the parks by new development, it may be through increasing taxes on residents. He would rather have new residents help with next amenity. Garfunkel pointed out the other danger of no guarantee that the 300 lots will sell. Stover asked about the role of the Park Foundation. Love said that is one resource but we still need to look for others. Mayor Love said that he appreciates the needs, both long term and immediate. He asked about the idea of having Eagle Crest help with the structure at Freeman. Themig said it still might be an option and needs further exploration. Puzak said it has been on the to do list for 4-5 years. Funding is flat and cost is going up so we are further away now than 5 years ago. Love asked how do we get that done this year. Arnst said Eagle crest is willing to bid on it. Brown pointed out that any developer is going to bid at profit or just say it’s not worth it to them. Puzak said that a higher park dedication fee would have helped in this case. Stover said it would be different if it were a developer bringing in high-priced homes. This is to be affordable and any cost increase would be passed on to the buyer. There was further discussion about the role of the Park Foundation in helping with improvements and the need to make the public more aware of the issue of limited funds for parks in Shorewood. Love asked what other cities do when park dedication fees are not an option. Hurm said that some don’t do as well at maintaining their parks. Those who do, have help from civic organizations. He was not aware of others charging a turnover fee, but it is an interesting idea. Dallman explained that the building at Freeman has been a major topic of Park Foundation meetings and it always comes down to other questions of how, who, what, when, etc. They have tried to involve the sports organizations and have considered fundraisers. It just hasn’t been able to get off the ground. Hurm suggested that another approach is to go to sports organizations for another user fee for sustainability funds. Park Commission/City Council Meeting Tuesday, May 11, 1999 Page 5 Engineer Brown said that he has a bid from the same contractor whom did the existing shelter at Freeman. The City cannot accept it as bid, but it is a good estimate of cost. Themig said the high cost of park buildings is just a reality that says we need to look to other sources of revenue Mayor Love suggested an approach that involves other civic organizations such as the Chamber of Commerce and recommended beginning with the concept of a building at Freeman. Arnst said the Park Foundation has a broader role than this building, which is to be a champion of the parks. We need that body to handle some of the “nuts and bolts” matters of parks—one to handle the ongoing public relations aspect, as well. Love said he would like to see regular meetings with the Park Commission and Council and to be in touch with issues of parks. The Council appreciates the problem and wants to look for other solutions and be part of the process. He asked staff to look at the other options that have been discussed. Hurm asked if there was a consensus on an amount of $1500 for the park dedication fee. Love said he could support that, but is not sure of a consensus. Garfunkel said that some impact fees can go up with costs and Love added that the Council could support an impact fee and would like to work with the Park Commission on solutions. Stover added that a disagreement with the first proposal does not mean they do not agree with some kind of increase. 3. REPORT ON TRAIL WALKS TO DATE Themig asked if the City Council has had feedback about trails from the community. Love said the petition opposing the segment along Howards Point Road is the main response. Stover added there is an occasional letter. Love said it is a tribute to the process. Garfunkel asked if the Smithtown segment connects to a Victoria trail. Arnst explained that the Victoria extension does not exist yet, but it is in their trail plan. Hurm said the videotaped copies of the trail walks are available. The Smithtown walk was positive. Garfunkel commented that his comfort level goes up when he sees public support for a segment. If people want it, he’s fine with the idea. Arnst added that the Vine Hill walk included about 80% of homeowners along the trail frontage and all were supportive. Puzak said the Park Commission was pleased and surprised that everyone who came out was in support and there was a good turnout. The perception is that those two segments are strongly supported. Garfunkel pointed out that we do not want the attitude that people feel they can’t do anything about it. Arnst stated an example of one resident who began with words like “fight” and “battle,” but became part of the process and has changed. Another resident Park Commission/City Council Meeting Tuesday, May 11, 1999 Page 6 along Smithtown was concerned about trees and he joined the walk and ended up being content with the process. Themig made the point that the Park Commission is not advocating one link over another, but will listen to public response and input. Garfunkel said there was opposition at the open house from people who did not attend walks. He asked what happened to the opponents in the process. We want to make sure folks don’t feel that they can’t fight city hall. The process is very friendly. Love pointed out that a friendly process could turn people around. Garfunkel told the Commission he wants them to try to engage those people who were opposed earlier in the process. Stover said that some people don’t care or want to be involved. Love added that we at least want to make sure they are informed. Themig said they would keep them informed with letters. Stover said all should be contacted so those who attended don’t feel left out. It was agreed that the City Council has a recommendation still standing for an increase in Park Dedication Fees and can carry on with this added information. They are committed to work on these problems with the Park Commission and will reply after further discussion. It will be on the next City Council agenda. 4. ADJOURNMENT The Work Session adjourned at 8:56 p.m. RESPECTFULLY SUBMITTED, Connie Bastyr Recording Secretary