November 2020 - Parks & Recreation - 19

instigators are widely praised for
their vision today.

Contemporary Application
In contemporary times, many
would applaud the wisdom of such
a long-term perspective by elected
officials, but such visionary actions
are rare. They require those of us
who are current office holders to
support investment of tax funds on
projects that will not come to fruition for a decade or more in the
future. Hence, while current elected officials incur the political cost
of raising taxes, the benefits accrue
for future officials - an unappealing scenario to most of us.
This political conundrum can
be resolved by including a reimbursement clause in park dedication and/or impact fee ordinances.
These ordinances require developers to provide land or a fee-in-lieu
of dedicating land, exclusively for
the acquisition and development
of parks. Many communities have
passed such ordinances, because
they embrace the principle that
parks should be financed by new
homes that have created the demand for new parks.
Most of the time, communities
opt to take fees-in-lieu of land, because the amount of land required
to be dedicated is too small for practical use as a park. When a threshold amount of revenue from these
fees has accrued, a community then
seeks to buy land for a park. Unfortunately, by the time this threshold
is achieved, it has frequently become too expensive and exceeds
the revenues available, because land
prices have risen as intensity of development in the area has increased.
To avoid this situation, a reimbursement clause could be insert-

ed into an ordinance. A typical
clause states, " If the city acquires
parkland in a zone in which a feein-lieu is paid, the fee may be used
to reimburse the city the costs of
the park's acquisition and development. " This enables a city to buy
parkland ahead of development by
using certificates of obligation or
general obligation bonds for which
it will be subsequently reimbursed
from the fees received from future
development. It apportions the cost
of providing park facilities for new
development before it is needed to
each new development in proportion to its impact on the park.
Negotiations with landowners
during times when activity in the
real estate market is slow, when a
bargain sale becomes available, or
when the land is beyond the community's existing developed areas
may result in good park and recreational land being purchased at a
relatively low price.
It also will be easier to acquire
substantial tracts of (say) 50 to 300
acres during this time, rather than
after development reaches these
outlying areas. While these acquisitions provide more land than the
community currently needs, they
provide additional capacity needed
to accommodate new growth.
Adopting this approach is likely
to be supported by developers, because the existence of parks makes
new developments more attractive
to homeowners. The public also is
more likely to support a park bond
issue if they are aware the increase
in taxes to pay the annual debt
charges is likely to be small because
the dedication fees will contribute to
paying these charges. The following
example illustrates this principle:
A fast-growing city in Texas issued

Certificates of Obligation to purchase two neighborhood park sites
of 12 to 15 acres in advance of development. At $20,000 an acre, this
involved a commitment of $240,000
to $300,000 per park. These purchases were made seven years in advance
of development. This time frame
was adopted because it had long been
used successfully by the school district
in its planning. The certificates were
repaid over time by (1) the cash-inlieu payments that the dedication
ordinance required developers to contribute for neighborhood parks, and
(2) 20 percent of the property taxes
the city obtained from residences in
close proximity to these parks. The 20
percent proportion was used because
it was the estimated premium created
by the presence of the parks.

Adopting this approach is likely
to be supported by developers,
because the existence of parks
makes new developments more
attractive to homeowners.
Because parkland dedication ordinances are a component of a city's
subdivision regulations, these ordinances usually are the purview of
the planning department. However,
they are in the operational sphere of
park departments. This suggests that
park boards and directors should
take a proactive role in making city
managers and elected officials aware
of the potential of using this reimbursement clause approach.
John L. Crompton, Ph.D., is a University Distinguished
Professor, Regents Professor and Presidential Professor for
Teaching Excellence in the Department of Recreation, Park
and Tourism Sciences at Texas A&M University and an
elected Councilmember for the City of College Station
(jcrompton@tamu.edu).

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November 2020 - Parks & Recreation

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