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DEVELOPMENT FEES By: Ryan R. Sehroeder, City Administrator Background: At the March 12, 1996 meeting, Council adopted Ordinance #96-04 and Resolution #96- 03-052, enclosed herein, requiring a dedication from developments toward transportation infrastructure needs resulting from future growth within the community. Since that time, the City has collected $48,250 in fees related to that action through building permits. Another $24,563 has been collected directly from developers (both amounts as of 12/31/96). Further, as part of the development permit process, developers have received credits for easement dedication, trail construction, and the like, that has lowered City revenue to the above from what would have otherwise been received absent the credits. Finally, for every tax increment industrial project, the receipt of fee revenue has been programmed from future increments to reimburse the City for expenses related to the industrial parks. Precedent to passage of the above, staff had provided research projecting expenses which will be incurred in the transportation area as a result of future subdivisions. Included were intersection improvements, roadway widening and the like. Also included were transportational trails. As part of the analysis, the trails represented $99.40/lot of the total fee that staff represented as necessary to cover future expenses. The Parks and Recreation has, in the past, proposed that a portion of park dedications be allocated directly to trail development. This has not yet occurred. Given, however, that we have clear statutory authority to levy charges for park dedication within which trail development occurs, it seems that this fee could be increased to provide for trails which were contemplated to be funded from other development fees at the time that our rates and charges were approved (December 10, 1996). On March 6, 1997, the Minnesota Supreme Court affirmed an earlier tax court decision that the City of Eagan's road unit connection charge was invalid. Eagan is a statutory city. Eagan also has levied this charge for future road construction costs in a manner differing from the format used by the City of Ramsey with its transportation impact fee. However, Attorney Goodrich has opined that the Eagan case has at least some impact upon Ramsey relative to development charges. As a result, the City Council has been advised to rescind transportation fees which are levied as a result of site plan approvals which are other than the result of a subdivision process. The Attorney has also cautioned that charges collected as a result of the subdivision process must relate directly to improvements created by the subdivision. Further, that perhaps, each subdivision should incur the requirement for a transportation impact analysis. Subsequent to such an analysis, Council could determine specifically which improvements need to be provided as a result of the subject subdivision. The Attorney has also suggested that a Charter Amendment as opposed to an ordinance perhaps should be considered given the Eagan case.