HomeMy WebLinkAboutItem 5City of Lakeville
Parks & Recreation
Memorandum
To: Mayor and City Council
Justin Miller, City Administrator
From: John Hennen, Parks and Recreation Director
Date: April 22, 2020
Subject: Park Referendum Discussion
BACKGROUND
Over the past two years, the Parks, Recreation and Natural Resources Committee (PRNRC) and
City Council have discussed options for a potential Park Bond Referendum. At the January 11
City Council Retreat, staff was directed to work with Bakery Tilly on a survey to determine tax
tolerance with a plan to hold a referendum on August 11th.
The survey was completed from February 17 - 21 which included a random sample of 400
registered voters living within the boundaries of the City. Staff provided the Community Survey
Summary of Results along with the Detailed Community Survey Results to the City Council at
the March 30th City Council Work Session.
Data from the Baker Tilly survey regarding the impact on the average home is as follows:
Impact Category Favor Oppose Undecided
Increase by $50 77.5% 12.5% 10.1%
Increase by $75 57.7% 27.5% 14.8%
Increase by $100 44.7% 39.6% 15.8%
Staff has worked with Northland Public Finance to create some mid-range assumptions on
scenarios for general obligation referendum park bonds that are included in the packet. You will
see that:
1.A 50-dollar increase would allow for under $20,650,000 in construction costs (Scenario 1)
2.A 75-dollar increase would allow for about $29,150,000 in construction costs (Scenario 3)
3.A 100-dollar increase would allow for the entire project to be done (Scenario 7)
At the time the survey was completed, which was before the COVID-19 pandemic, Baker Tilly
estimated that a referendum with a tax impact under 80-dollars per year for a $330,000 home
would receive majority support.
At the March 30th City Council Work Session, several council members were hesitant to move
forward with an August 11th Park Bond Referendum Election considering recent events and
directed staff to bring the item back to them at the April 27th City Council Work Session for
further discussion.
On April 15th, the Parks, Recreation and Natural Resources Committee discussed the Park Bond
Referendum and recommended postponing the election on August 11th and revisiting the
subject matter in late August/early September.
Also attached are the following:
1.Park Bond Referendum Project Cost Estimates as of March 2020
2.August 11, 2020 Park Bond Referendum Proposed Timeline
DIRECTION
After reviewing the Park Bond Referendum results, Staff is seeking direction from the Mayor
and Council regarding if they would like to move forward with a Park Bond Referendum on
August 11. If so, the City Council would need to consider a resolution calling for a special election
at a City Council meeting in early May followed by the City Clerk providing a written notice to
the County Auditor and Secretary of State regarding the election no later than May 27 . If the
City Council decides to postpone the election, staff would like direction regarding continuing to
move forward with the purchase of the single-family property that abuts Antlers Park which is
part of the master plan for the park.
Preliminary for Planning Purposes Only
1 2 3 4 5 6 7
Construction costs $20,650,000 $22,850,000 $29,150,000 $29,800,000 $31,350,000 $32,000,000 $32,500,000
Par amount of bonds $20,890,000 $23,115,000 $29,490,000 $30,145,000 $31,715,000 $32,370,000 $32,875,000
Average annual bond payment $1,404,136 $1,553,691 $1,982,191 $2,026,218 $2,131,746 $2,175,772 $2,209,716
Estimated Pay 2022 City NTC $92,092,724 $92,092,724 $92,092,724 $92,092,724 $92,092,724 $92,092,724 $92,092,724
Tax rate impact of bonds 1.525%1.687%2.152%2.200%2.315%2.363%2.399%
Property Type
Estimated Market Value
(EMV) of Property for
Pay 2022
Residential Homestead $200,000 $28 $30 $39 $40 $42 $43 $43
$225,000 $32 $35 $45 $46 $48 $49 $50
$250,000 $36 $40 $51 $52 $54 $56 $56
$275,000 $40 $44 $57 $58 $61 $62 $63
$300,000 $44 $49 $62 $64 $67 $68 $70
Median Value*$361,730 $54 $60 $77 $79 $83 $84 $86
Mean Value*$379,939 $57 $64 $81 $83 $87 $89 $90
$500,000 $76 $84 $108 $110 $116 $118 $120
$750,000 $124 $137 $175 $179 $188 $192 $195
$1,000,000 $172 $190 $242 $248 $260 $266 $270
Commercial / Industrial $500,000 $141 $156 $199 $204 $214 $219 $222
$1,000,000 $294 $325 $414 $424 $446 $455 $462
$3,000,000 $903 $1,000 $1,275 $1,304 $1,372 $1,400 $1,422
$5,000,000 $1,513 $1,674 $2,136 $2,184 $2,297 $2,345 $2,381
$7,000,000 $2,123 $2,349 $2,997 $3,064 $3,223 $3,290 $3,341
$10,000,000 $3,038 $3,362 $4,289 $4,384 $4,612 $4,707 $4,781
Assumptions for Scenarios:
Estimated term of bonds (years) =20 Pay 2020 Median Value*$328,100
Estimated cost of issuance as % of par amount of bonds =1.15%included in par amount of bonds Pay 2020 Mean Value*$344,616
Estimated interest rate for bonds =3.00%average coupon
Estimated Pay 2022 City Net Tax Capacity (NTC) calculated based on the following:
Pay 2020 Prel NTC $83,306,830 From Dakota County Tables 9A, 9B, 9C
Plus estimated NTC from TIF Decertification $451,561 From Dakota County TIF Status Report, Pay 2019
Less NTC from TIF Decertification Subject to Tax Abatement ($227,576)PID 22-24500-01-023, Pay 2020 Valuation of $11,416,300
Valuation Growth from Pay 2020 to Pay 2022 $8,561,909 Annual growth assumption =5.00%
Estimated Pay 2022 City NTC $92,092,724
Estimated growth in EMV of property from Pay 2020 to Pay 2021 $4,176,541
Estimated growth in EMV of property from Pay 2021 to Pay 2022 $4,385,368
*Median and mean values are adjusted for annual
growth assumption
MID-RANGE ASSUMPTIONS
City of Lakeville, Minnesota
Review of Scenarios for General Obligation Referendum Park Bonds
Tax Impact on Property Type Examples
SCENARIOS
Tax Impact on Property Type
3/26/2020
WSB Estimate (1/6/2020)$7,823,465
Knutson Property
Purchase Price $275,000
WSB - Demo Specs & Consultation $8,000
Demo of home $50,000
TOTAL $8,156,465
SRF Estimate (12/18/19)$12,304,305
Draintile Installation $425,000
TOTAL $12,729,305
WSB Estimate (11-6-18)$1,879,053
10% Increase (2019 & 20)$187,905
TOTAL $2,066,958
Apex Estimate (1/10/20)$8,500,000
TOTAL $8,500,000
Demolition of 2-story home, Cabin Improvments,$1,000,000
New Addition, Septic and Parking Areas,
Pergola
TOTAL $1,000,000
$650,000
TOTAL $650,000
$33,102,728
AMES ARENA
RITTER FARM PARK CABIN & SITE IMPROVEMENTS
CASPERSON PARK PERFORMANCE STAGE & PARKING LOT IMPROVEMENTS
PARK BOND REFERENDUM PROJECT COST ESTIMATES
March 2020
ANTLERS PARK
AVONLEA COMMUNITY PARK
EAST COMMUNITY PARK
August 11, 2020 Park Bond Referendum Proposed Timeline
January 8 PRNRC Meeting
PRNRC revisited proposed park projects, estimated
costs and recommended adding two projects to the
Park Bond Referendum project list.
January 11 City Council at retreat directed Staff to obtain quote from Baker Tilly on Park Bond Referendum survey questions
January 21 City Council approved contract with Baker Tilly to complete Park Bond Referendum survey
February 3 – March 13 Baker Tilly Completes Survey
March 23rd City Council reviews survey results and sets Park Bond Referendum date for August 11 pending favorable survey results
April 1 PRNRC reviews final Park Bond Referendum project list and makes recommendation on the projects
April 20 or May 4 City Council Meeting City Council considers resolution calling for special election
No later than May 27
*City Clerk provides written notice to:(1) County Auditor and (2) Secretary of State regarding
election
May – August Educate community on Park Bond Referendum
August 11 Park Bond Referendum Election
August 2020 – February 2021 If Park Bond Referendum approved, complete plans and specifications for at least one of the projects
March – April 2021 Bid opening and City Council approval of contract agreement
Spring 2021 Construction commences
* At least 74 days before election, written notice must be provided form (1) City Clerk to County Auditor
(2) County Auditor to Secretary of State