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Park System Analysis for Establishing Park Fee <br />(December 2001 Analysis updated to November 2011) <br />Orono's park dedication ordinance calls for park dedication associated with new subdivisions to be <br />8% of the land. When the Council determines that land is not necessary, a fee in lieu of land <br />dedication is collected at a rate of 8% of the pre -development fair market value of the land. The City <br />has established minimum and maximum park dedication fees (set by Council resolution) to account <br />for situations in which property values would result in excessively low or high per-unit fees. <br />The minimum and maximum park dedication requirements for residential property since 1999 have <br />been based on the proportionate share of the ultimate cost of the City's park system to be borne by <br />new residential development. This policy was established to ensure that a rough proportionality is <br />maintained between the park dedication fees charged for new residential development and the impact <br />of that development on the park system. The basic premise is that the ultimate cost of a completed <br />park system should be apportioned equally between present and future residents; i.e. if the City is at <br />2/3 of full development, then the 1/3 yet to come should pay for 1/3 of the ultimate cost of the park <br />system. <br />An initial valuation of the Orono park system was done in 1997, and updated in 2001. At that time the <br />City Council also created a list of planned future acquisitions and improvements to the system (see <br />Table 1 attached). Based on the existing value and future cost estimates, staff calculated the <br />proportionate share of the projected cost of the City's park system to be borne by new residential units. <br />As of December 2001 this was an average of $4,630 per projected new dwelling unit. The <br />calculation of that amount was based on the accompanying table of proposed acquisitions, and <br />summarized as follows: <br />2001 Summary <br />1997-1998 Existing Parks Value <br />(x 1.10 1998-2000 Value Increase x 1.07 2001 Land Value Inflation Factor) $ 6,474,000 <br />Added Parks Land/Items Since 1997-98 1,966,000 <br />Subtotal - Existing $ 8,440,000 <br />Total Property Acquisition Intended <br />Expected Park Development/Improvements <br />" Trails " " <br />$ 5,874,000 <br />(December 2000 value x 1.0375**) 799,000 <br />( ) 3,424,000 <br />Subtotal - Future $ 10,097,000 <br />Total Projected Parks Value $ 18,537,000 <br />**Estimated average CPI inflation factor for December 2000 to December 2001 <br />Dwelling units at full development per 2000-2020 CMP 3,990 <br />Current dwelling units per 2000 Census (2766 households / 95.1 % occupancy) 2,909 <br />Number of future dwelling units to be added 1,081 <br />Projected # dwellings to be added is 1081/3990 = 27% of total projected dwellings. The added 27% of <br />dwelling units should pay 27% of the projected value of the City's park system. 27% of $18,537,000 <br />is $5,004,990. <br />____$5,004,990 to_ be_paid _b_y_1,081_ dwelling -units _is_$4,630_per_unit__— __ <br />