Park Dedication Ordinances in Texas: A Missed Opportunity

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Park Dedication Ordinances in TexasA Missed
Opportunity?

• John L. Crompton
• Distinguished Professor, Texas AM University
• Council Member, City of College Station
• Available at www.rpts.tamu.edu/faculty/crompton/cr
  ompton-recent-presentations.shtml

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Long History

• Montana 1919 For the purpose of promoting
  public comfort, welfare and safety, such plat and
  survey must show that at least one-ninth of the
  platted area, exclusive of streets etc., is
  forever dedicated to the public for parks and
  playgrounds.
• Bluefield, West Virginia, 1923 Not less than
  five per cent of the area of all plats shall be
  dedicated by the owner for parks and playground
  purposes except in the case of a very small
  area.
• Modern era post 1960s
• Accelerated with tax-revolt of late 1970s and
  1980s

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Principle

• Type of user fee.
• New development generates a need for additional
  park amenities. The people responsible for
  creating that need should bear the cost of
  providing the new amenities.
• Political imperative Growth should pay for
  itself.

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Analysis

• 117 Texas cities were contacted
• 83 responded
• 48 had Parkland Dedication Ordinances

View them at www.rpts.tamu.edu/landdedication
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Sources of Exactions
Police Power Promote the health, safety, and
welfare of residents (i.e., parkland dedication
and improvements)
Legislative enabling authority Impact Fees
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Impact Fees

• Need state legislative authority beyond the
  health and welfare mandate of the city.
• Much broader than parkland. Embraces all types of
  recreation amenities.
• Collected at building permit not platting stage.

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Sources of Exactions
Police Power Promote the health, safety, and
welfare of residents (i.e., parkland dedication
and improvements)
Legislative enabling authority Impact Fees
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5th Amendment

• Nor shall private property be taken for public
  use without just compensation
• Resolved by the 1970s through court cases
• Key questions relate to
• Nexus principle
• How much?

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Dates When Texas Cities First Enacted Parkland
Dedication Ordinances
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The Potential and Actual Scope of Exaction
Ordinances
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The Potential and Actual Scope of Exaction
Ordinances
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Legal Basis

• City of College Station vs. Turtle Rock
  Corporation 1984 established constitutionality of
  parkland dedication but required
• A reasonable connection between the increased
  population arising from the subdivision
  development and increased park and recreation
  needs in the neighborhood

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Nollan vs. California Coastal Commission (1987)

• Reaffirmed the rational nexus clause (i.e., the
  need for dedication zones)

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Dolan vs. City of Tigard (1994)

• Must be a rough proportionality between the
  requirements imposed on a development and the
  needs for park use projected to be forthcoming
  from the development
• No precise mathematical calculation is required,
  but the city must make some sort of
  individualized determination that the required
  dedication is related both in nature and extent
  to the impact of the proposed development.

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Legal Basis Codified

• The Dolan case has been codified in the Texas
  statutes which mandate that
• The developers portion of the costs may not
  exceed the amount required for infrastructure
  improvements that are roughly proportionate to
  the proposed development

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Implications of Dolan

• Prior to the Dolan case, developers challenging a
  communitys park dedication ordinance had to
  prove it was unfair. The Dolan decision shifted
  the burden of proof to communities, so they must
  now justify that the ordinance is fair. Thus,
  burden of proof of the legitimacy of rough
  proportionality is on the city.
• Rough proportionality is operationalized as a
  citys current level of service.
• Must be individualized. Cannot be an arbitrary
  amount imposed simply because it is comparable to
  another city.
• National standards or comparables are
  irrelevant.
• Cannot request disproportionate amounts from
  developers.
• Accommodate different densities of development.

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The Potential and Actual Scope of Exaction
Ordinances
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The Potential and Actual Scope of Exaction
Ordinances
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The Potential and Actual Scope of Exaction
Ordinances
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Scopes of Ordinances

• New Braunfels
• To provide adequate recreation areas and
  amenities in the form of neighborhood parks
• Arlington
• To provide linear parks and neighborhood parks
• Bryan
• To provide recreational areas in the form of
  community parks. Community parks typically serve
  an area with a radius of one mile, and most of
  these also serve as neighborhood parks

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Scopes of Ordinances

• League City
• To provide park and recreation areas in the form
  of neighborhood parks, recreational parks,
  regional parks, and connecting trails as a
  function of residential developments
• Colleyville
• To provide adequate land for parks, recreation,
  and open spaceto meet the demand and need of the
  future residents for open space and parks

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3 Elements in the Calculation of the Amount of
Park Dedication Requirements

• A land requirement
• A fee-in-lieu alternative to the land requirement
• A park development fee

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Neighborhood Park Requirements for Single Family
Homes

• Land Requirements for Neighborhood Parks
• The current level of service is one (1) acre per
  276 people
• 2006 Total Population 77,261
• 2.80 Persons per Household (PPH) for Single
  Family based on Census information.
• 276 people /2.80 PPH 98 DUs
• 1 Acre per 98 DUs

• Neighborhood Park Acquisition Costs (Determines
  Fee in Lieu of Land)
• One (1) acre costs 24,000 to purchase
• Single Family
• 24,000 / 98 DUs 245 per DU

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Neighborhood Park Requirements for Single Family
Homes

• Neighborhood Park Development Costs (Determines
  Fee for Development)
• The cost of improvements in an average
  Neighborhood Park in College Station is 515,450.
• One Neighborhood Park serves 2,207 people, based
  on a total city population of 77,261 being served
  by 35 parks (count includes neighborhood parks
  and 6 mini parks).
• It costs 234 per person to develop an average
  intergenerational park.
• 234 x 2.80 PPH 655 per DU
• Total Neighborhood Park Fee
• Single Family
• 245 655 900

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Leverage

• Implication of leverage especially in
  relatively small communities projected to grow.

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Leverage Potential

• Scenario
• (i) Cities A and B both have a population of
  10,000 (i.e. 4,000 dwelling units).
• (ii) Both cities will increase to 25,000
  population (i.e. 10,000 dwelling units) in the
  next 10 years.
• (iii) City A has invested in 200 acres of
  public parkland, while City B has invested in 20
  acres of public parkland. Thus, the existing
  levels of service are
• City A 1 acre per 20 Dwelling Units
  (4000/200)
• City B 1 acre per 200 DUs (4000/20)
• (iv) Land costs in both cities are 30,000 per
  acre
• (v) Park development costs in both cities are
  50,000 per acre

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Leverage Potential cont.

• Initial Investment in Parks with G.O. Bonds
• Private Investment Required by a Parkland
  Dedication Ordinance

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Leverage Potential cont.

• Conclusion
• At the end of 10 years growth, City B would have
  to issue an additional 36 million in GO bonds
  (40 million - 4 million) to catch up with the
  amount of parkland it had failed to accrue in
  that 10 year period.
• Thus, the total investment of taxes for providing
  equal provision of parkland would be 16 million
  in City A and 37.6 million (36 million 1.6
  million) in City B.

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Reimbursement Provision

• Limitation of fees in lieu
• If the City does acquire park land in a park
  zone, the City may require subsequent parkland
  dedications for that zone to be
  fee-in-lieu-of-land only. This will reimburse
  the City of the cost of acquisition.
• Revolving fund?

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Floodplain Land?

• Usual limitation No more than 50 of the total
  dedication AND
• A ratio of wither 21 or 31, floodplain to
  non-floodplain land

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Detention Basins

• San Antonio
• Detention basins which are required as part of
  the stormwater management standards shall not
  qualify as parkland unless seventy-five percent
  (75) or more of the active and usable area is
  designed for recreational use and the area(s)
  conforms to the requirements below.
• Detention areas shall not be inundated so as to
  be unusable for their designed recreational
  purposes. Detention areas must be designed to
  drain within 24 hours.
• Detention areas shall be constructed of natural
  materials. Terracing, berming and contouring is
  required in order to naturalize and enhance the
  aesthetics of the basin. Basin slopes shall not
  excede a three to one (31) slope.
• Detention areas may count for a maximum of fifty
  percent (50) of the park dedication requirement.

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Detention Basins cont.

• College Station
• Detention/Retention areas will not be accepted as
  part of the required dedication, but may be
  accepted in addition to the required dedication.
• League City
• Detention areas are unsuitable but an
  exception may be a ballfield that is located in a
  day detention basin with the approval of the
  Parks Board and City Council.

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Challenges in Existing Texas Ordinances

• Scope of many ordinances is restricted to only a
  sub-set of parks.
• Failure to extend the ordinance into the ETJ
  area. (Only 7 of 48 do this)
• Dedications fail to follow the US Supreme Court
  criterion of rough proportionality. They are
  fixed at levels far below the cost of acquiring
  and developing parks.

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Challenges in Existing Texas Ordinances

• Use arbitrary numbers not empirical procedures to
  identify levels of services and costs.
• Only 10 of 48 cities charge a park development
  fee. Some of those 10 derive it arbitrarily
  rather than empirically.
• Wide varieties in determination of fair market
  value of land (basis for fee-in-lieu).

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Challenges in Existing Texas Ordinances

• 27 of the 48 ordinances did not authorize any
  credit for private amenities.
• Courts require fees-in-lieu to be expended in a
  reasonable time period 16 of the 48 cities
  failed to specify a timeframe.
• 3 cities extended their ordinance to
  non-residential property.
• Only 11 of the 48 ordinances had a timeframe for
  regularly reviewing them.

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Analysis Conclusions

• Unrealized potential
• Restricted scope
• Not applied to ETJ
• Low fees make reimbursement clauses ineffective

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Analysis Conclusions

• Below-cost dedications
• Use of arbitrary instead of empirically derived
  numbers
• Fallacy of percentages on low dedication
  requirements
• Failure to meet the rough proportionality
  requirement
• In 44 of the 48 cities the increases of 150 -
  1800 are needed to meet the criterion
• Lack of a park development fee

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Why is the Potential Not Being Realized?

• Inertia lack of awareness no regular review
• Vigorous opposition by the development community
• Fifth Amendment resentment
• Political influence
• Tradition of providing for future generations

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Development Community Supporter Rationales

• Congruency with development
• General quality of life increases
• Overcome resistance to growth costs
• Public relations alleviation of distrust
  goodwill

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The Notion of Opportunity Cost

• Cost to Residents of Not Maximizing the Potential
  of a Parkland Dedication Ordinance
• Estimate of 10 year capital cost requirements for
  neighborhood and community parks based on a
  projected increase of 40,000 population in the
  next 20 years while maintaining current levels of
  service

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• New Neighborhood Parks
• Current level of service 1 acre per 276 people
• Additional land needed to retain current level of
  service 40,000/276 145 acres
• Cost of additional land 145 acres _at_ 20,000
• per acre 2,900,000
• Average park size of 8 acres means 18 new
• parks, with park development costs
• _at_ 576,000 10,368,000
• Total 13,268,000
• New Community Parks
• 12,068,000
• Total estimated cost
• 26,068,000

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• Revenue projections from land dedication
  ordinance based upon 40,000 additional population
  with equal number of single family multi-family
  units
• Existing ordinance requirements
• 7,979,000
• Proposed new ordinance requirements
• 25,605,000

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Conclusion10 year capital cost to retain
existing level of service(Current s)

• Neighborhood Parks 13.2 million
• Community Parks 12.8 million
• Total Cost 26.0 million
• Existing Ordinance Revenues 8 million
• New Ordinance Revenues 26 million
• If new ordinance is not implemented, residents
  will have to be taxed an additional 18 million
  to maintain the current levels of park service.

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The Political Case for Parkland Dedication

• Three options for paying for growth
• Existing residents subsidize new park development
• Lower the level of service (i.e., reduce the
  number of parks/quality of life)
• Require new growth to pay for itself.
• Tax outcomes are determined by front-end
  decisions, not back-end decisions.
• Create infrastructure deficits for future
  generations.

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The Political Case for Parkland Dedication

• Fiscal conservatism
• Those who benefit from services should pay for
  them. The bedrock of this philosophy.

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The Political Case for Parkland Dedication

• Not paid for by developers
• If a 2,000 exaction is imposed (fee in lieu
  and/or impact fee), there are four possible
  options for absorbing this cost
• Homeowners pay more. A 200,000 home is priced at
  202,000 (increased charges irrelevant!)
• Homeowners get less space. Instead of 2,000 sq
  ft, they get 1,980 sq ft (at 100 per sq ft)
• Passed back to the land seller who receives a
  lower price for the land (long term market
  forces)
• Engage in value engineering

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Impact on Land Sellers

• Assume an exaction of 1,000
• Before exaction
• 100 units sold _at_ 150,000 paid 2 million for
  land
• After exaction
• Cannot sell at 151,000 per unit so developer
  pays 1.9 million for the land to preserve profit
  margin

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OM Expense

• Reduce the number of new parks because we cannot
  afford to maintain those that we have
• The Proximate Principle directs that the premium
  generated by passive use parks is sufficient to
  pay for the maintenance expense.

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The Median Cost to Provide Public Services to
Different Land Uses per Dollar Revenue Raise
(n98 Communities)
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Framing the Debate

• 400 to 800 is a 100 increase stratospheric
• A 400 increase on a 200,000 house is 2/10th of
  1 (minuscule)

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Park Dedication Ordinances in TexasA Missed
Opportunity

• John L. Crompton
• Distinguished Professor, Texas AM University
• Council Member, City of College Station
• Available at www.rpts.tamu.edu/faculty/crompton/cr
  ompton-recent-presentations.shtml