02-958Return copy to: (BJE)
Real Estate Division
140 CSty Hall
Presented By
12eferred To
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Committee: Date
WfIEREAS, the City charges a$500 adminisuative fee for the vacation of city street and alley rights-
of-way as established by resolution of the Saint Paul City Council (CF #93-1587); and
WHEREAS, said resolution calis for periodic review of the costs of vacaung street and alley rights-of-
way and, when appropriate, an adjustment in the admuustrauve fee; and
WHEREAS, the Real Estate Division of the Department of Technology and Management Services has
studied the cost of processing vacation petitions (see Attachment "A") and recommends an increase in
the administrative fee to more adequately cover processing costs while at the same time remaining
affardable to homeowners and residenual or commercial developers working to expand the City's
housing and business opportunities; and
WHEREAS, the Real Fstate Division proposes the following three-tiered fee structure to distinguish
between petitions of differing levels of complexity and processing time:
Tier I - Non-develo�ment
Petiuons from residenual property
owners for street1a11ey vacaUons
council F51e # O 1- 58'
Green Sheet # 203956
$ 600
Tier II- Development (Less than 50,000 sq. ft. of area to be vacated) $1,200
Petitions from commerciaUindustrial
property owners or owners of residential
developments.
Tier III - Development (50,000 or more sq. ft. of area to be vacated)
Petitions from commerciaUindustrial
property owners or owners of residenual
developments.
Easement Release Fee (50% of non-development fee)
Requests for the release of e�sting
easements on previously-vacated
property
$2,000
$ 300
NOW, THEREFORE SE IT RESOLVED, that the Saint Paul City Council adopts said proposed
vacation fee structure and easement release fee; and be it further
RESOLUTION
C1TY OF SAINT PAUL, MINNESOTA
a�
G�VSHA2ID�REAL W Pdata\VACATE�RevisedVacalionFees.Res.wpd
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Page 2
Council F�le #
Green Sheet # 203956
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RESOLVED, that said fee structure be applied to all new vacation peutions and easement release
zequests received by the City after the date of adopuon of this resolution.
Requested by Department of:
Technoloev & Manaeement Services
By: o
'i �irector
U
Form Approved by City Attorney
Adopted by Council: Date �•�� ��-a� p�
�
:
O a- °l� 3'
Attachment "A"
TMS-Real Estate Division
Vacation Processing Cost Review / Vacation Fee Proposal
The TMS-Real Fstate Division proposes to increase revenues derived from processing
vacations of streets, alleys and other city-owned properties by establishing a three-tiered
fee struclure and initiating a new fee for the release of utality easement rights in vacated
rights of way. These fee changes would allow the City to recover a lazger portion of the cost of
processing vacations and easement releases. The current $500 fee, which was approved by the
city council in 1993, at the Uune represented a significant reducuon from what had previously
been coliected by the City for vacations. Prior to 1993, owners of properties abutting vacated
azeas paid the fair market value for those areas. This payment was eliminated to encourage the
expansion of the city's commerciaUindustrial base and enhance residenual neighborhoods. The
$500 fee was established in its place to recover the administrative cost of processing a vacation.
The actual cost, however, generally has exceeded this amount.
Current vacation grocessin c�ost
Estimated annual staff time devoted to vacation processing
Average number of vacations processed annually
Staff processing time per vacation
Staff cost devoted to vacation processing
Note: this amount is derived by calculating
salaries plus fringes (@ 30%) and overhead
(@25%) for 2,500 hours of fime distributed
among five staff persons.
Average cost per vacation
Pronosed vacation fee structure and fees generated
2,500 hours
20 vacations
92 hourslvacation
$80
$4,010
The revenues generated by the new fee structure wouid cover approximately 35% of the vacation
processing costs. While this does not represent full cost recovery, it reflects a fair and reasonable
charge to property owners who petition the City for vacation services. Raising the fee to recover
all administrative costs likely would discourage some property owners from engaging in
development activiries and would run counter to the City's long-standing development goals.
The specific proposal includes:
1) Increasing the current fee to $600 to account for inflarion since 1993.
G:VSAARID\REAL WPdata\VACA1E�Rev�sedVacationFees.Rptwpd
oa•gsa�
2) Establishing a 3-tiered fee structure to recognize the variation in administrative
processing time:
— Tier I- Non-develo�ment. Petitions from residential property owners for the vacation
of alleys or streets. Typically, such vacations are requested to allow for expanded use
and/or construction on what is now platted ciry right of way.
— Tier II- Development (Less than 50.000 square feet of vacated areal. Petitions from
commerciaVindustrial property owners or owners of residential developments.
— Tier II- Development f50.000 sc�uare feet or more of vacated area). Peuuons from
commerciaVindustrial property owners or owners of residential developments.
Typically, as the square footage of the vacated area increases the complexity of the
vacation and the time required to process it also increases.
3) Establish a new fee for easement releases (@ 50% of the proposed Non-Development
fee)
4) Fee structure and amounts to be generated:
a) Non-Development ($600 ea. X 5 vacations) _ $ 3,000
b) Development: <SOk sf ($1,200 ea. X 8 vacauons) _ $ 9,600
c) Development: SOk+ sf ($2,000 ea. X 7 vacations) _ $14,000
d) Easement releases ($300 ea. X 5 releases) _ $ 1,500
e) TOTAL ALL FEES = $28,100
Budget impact (001-01300-2833):
2002 Adopted
Increase over 2002 adopted
$21,680
$ 6,420
G:�SI3ARID�REAI.WPdata\VACATE�ReviseAVacatlonAees.Rptwpd Page 2
� - �S8' �
T.M.S./REAL ESTATE DIVISION D�� August 26, 2002 Green Sheet Number: 203956
ntact Pe:wn and PLone N�Uer: 2 EPARTMENI' DII2ECT0�,, 4 CI1'P COL7NCII,
Bruce EngeIbrekt 266-8854 '�'"` 1 x�ATro� �,trL c�,�g
UDCETDII2FCfOR FEiCEOFFL�ANC7ALSVCS
° �'� ODC° � ° �� ep �� : A '` S � 3 YOR(ORASS7STANT)
OTAL # OF SIGNATURE PAGES 1(CLIP ALL LOCATIONS FOR SIGNATURE)
CTION REQi3ESTED:
To approve a revised fee structare for petitions to vacate city sh and alley rights-of way.
COMMENDAITONS: APPROVE {A) OR REJECT (R) ERSONAL SERVICE CON'TRACTS MUST ANSWF,R THE FOLLOWING:
Pf.ANNAG CObIMISSION gr,� •� the person/tirm ever worked mder a conttactfor this deparhnent? YES NO
.^•��� ` IIasfttisperson/firmeverbeenaCYtpemplopee? YFS NO
QVII,SERVICECOMMISSION ., n .�,�.._. - , ^`,^ . ..
���� 4
A ��, ki � . Does this person/Srmpossess a sltill notnormally possessed by aoy YES NO
�, p„t;6 current
CBCOMMIITN,E � �, ��- employee?
E lain all YES aasweis on a se te sheet and attach.
UPPORTS WHICHCOLTNCII,OBTECTiVE?
otmtciL Ap ' nis�ucT All
ARD(S) PLANNING
COUNCIL
1VIT7ATING PROBLEM, ISSUE, OPPORTUHITY(Who, �W�at, When, Where, Why?): °�£^ ���+�Q��
e City currently charges a$500 admixristrative fee for the vacation of ci���t,�i`� �� e� ' �f-way as
tablished by resolution of the Saint Paui City Council (CF #93-1587). The resolution also calls for periodic
eview of the processing costs and, when appropriate, an adjustment in theadministra6ve fee. The Real Fstat
ivision recently completed such a review and recommends an increase in the administrative fee through a
ew three-tiered fee structure. Real Estate also recommends establishing a fee to process the release of
asements on reviousl -vacated ri hts-of-wa .
VANTAGES 1F APPROVED:
The City will be more adequately compensated for its cost of processing street and alley vacations while
continuin to hold fees at affordable levels.
ISADVANTAGESIFAPPROVED:
The cost of street and alley vacations for resideniiai property owners and housing/commercial developers
will increase.
ISADVANTAGES IP NOT APPROVLD:
The CSty will not be adequately compensated for its cost of processing street and alley vacations.
07'AL AMOLJNI' OF TRANSACTION: N�A COST/RtiVE�*UE BUDGEIZE D(CIRCLE ONE) YES NO
uvcsornzcE: N/A AcTn��rnrmB�: N/A
ANCLAL INFORMATION: (EXPLAII3)
evenues derived from processing vacations are estimated to increase by more than $6,000 annually under the
ew fee structure.
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