Powell City Councilor Tim Sapp is proposing a change to the city’s development ordinances. His proposal would increase what developers pay to the city government to help develop city parks. 

As the ordinance is currently written, the developer of a subdivision being annexed by the city is required to set aside 6% of the total land area of the subdivision for park land. The developer can pay 10% of the raw land value in lieu of the land, if the city council approves. 

Sapp proposed changing the ordinance to base the in-lieu-of payment on the developed land value rather than the raw land value. 

“This is something I’ve been looking at for a while,” Sapp said at the March 1 city council meeting. 

He brought the item up for discussion, but no ordinance change was considered for action. 

Empty parks

In recent years, the city has found itself with more land for parks than it can afford to develop. 

As part of the Cedarwood Phase IV annexation in 2001, 2 acres of land were donated to the city, which remain empty to this day. Over the course of 2004 and 2005, the city was deeded more than 10 acres of land as part of the annexation of a few subdivisions in the Gateway West area of Powell. An ambitious plan to create an elaborate park, dubbed Centennial Park, has not materialized, largely for lack of funding. 

With possible budget restraints looming on the horizon and over $1.5 million in annual maintenance costs (including the Powell Aquatic Center), the city likely will not have a lot of money in its budget for park development anytime soon.

When the city recently considered the annexation of the 14-acre Cottonwood Subdivision in north Powell, the council agreed to the developer’s request to provide cash in lieu of land. Sapp said that netted the city $17,380, which, he pointed out, might buy a swingset. 

“Park equipment is so expensive we can’t hardly afford to do anything with our parks, in the way of equipping them,” Sapp argued. 

If the payment was based on the value of developed land in the same subdivision, Sapp said, the city would have been paid around $56,000.

“Our citizens deserve to have the park ground they desire,” he argued. 

Sapp first made the proposal to the Planning and Zoning Board at its Feb. 22 meeting. The board voted to table the measure until it could get more information. 

Board member Bob Graff said he wanted a more clear definition of what developed land would be. This question came up at the council meeting as well. It wasn’t clear if that would be on the land value after curb and gutter had been built or after a home was built on the lot. 

“I would like to see something in writing,” Graff said, speaking after the meeting. 

Board member Heath Streeter said the discussion at the board meeting went “in circles” before they finally decided to table it. 

One of the issues was the cost per lot. Sapp estimated it would be around $1,000 per lot, while others argued it would be closer to between $3,000 and $5,000 per lot.

“Our lots are pretty expensive as it is now, and the developers weren’t going to eat those costs,” Streeter said. 

The council debated this question as well. Sapp said $1,000 per lot “shouldn’t break a developer,” but Mayor John Wetzel disputed that estimation; with each developed lot valued at around $40,000, Wetzel noted the developer would pay $4,000 for 10% of its value. 

Seeking guidance

City Attorney Sandra Kitchen advised councilors that, if they decided to move forward with the proposal, they should consider the timing of the payment. Usually these payments are provided at the time of annexation. If the payment was based on the value of the land after development, that value wouldn’t be known until after the subdivision was platted and a number of other plans determined — all of which come long after annexation.

The mayor wondered how Powell’s payment in lieu of land compared to surrounding communities. City Administrator Zack Thorington said Cody’s is set at 10% and goes off the county assessor’s valuation, which is considerably less than the appraised value the City of Powell uses. Worland is at 8%. 

Montana local codes are defined by state law, Thorington explained, and there are a number of provisions that vary the amount required, depending on the type of development. Industrial parks, for example, aren’t required to provide any land or money for city parks. It only applies to residential developments.

“I don’t know if there’s any real guidance there,” Thorington said, and it would require a lot of analysis to make a meaningful comparison.

Wetzel pointed out that, at least at first blush, Powell’s ordinance appeared to be in-line with that of other communities.

“I don’t want to summarily dismiss this, but I don’t see this moving too far. It sounds like we’re within the realm of what our neighbors are doing,” Wetzel said.

Councilor Steve Lensegrav concurred that park equipment costs are “astronomical” and said it’s possible Powell’s ordinance hasn’t kept pace with the cost of park development. He proposed some increase in the raw land value, as opposed to a percentage of developed land value. Even with such a bump, Lensegrav said the city would still need to find money in its budget for park development. 

“You’re never going to get all the money you need to buy equipment,” he said. 

Wetzel said it was worth considering a bump of a few percentage points, but he wanted more information.

Opposition 

Councilor Floyd Young, who is the council's liaison to the Planning and Zoning Board, said the developers he spoke to were “totally” against it. Young was concerned that the proposal, if enacted, would discourage home builders from developing within the city limits and what impact it would have on already high housing costs. 

“It would make it so regular folks in Powell couldn’t afford a home,” Young argued.

Streeter said he is opposed to the proposal as well. He said increasing the cost of houses in Powell — which would ultimately happen if the cost of development increased — is not the way to go, in his opinion. Streeter said it would be better for the city to seek grant money to develop its parks rather than placing those costs on developers.

The council voted to have the Planning and Zoning Board investigate the issue and come up with a recommendation for the council to consider at a later date. The board meets again March 29.

(Editor's note: This version corrects that Councilor Young, not Sapp, is the current liaison to the Planning and Zoning Board.)