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HomeMy WebLinkAbout4.A.2 Response Letter to the Metropolitan Council's preliminary 2040 population/household.household size/employment projections. General Business 4. A. 2. SHAKOPEE TO: Mayor and City Council Mark McNeill, City Administrator FROM: R. Michael Leek, Community Development Director DATE: 11/19/2013 SUBJECT: Response letter to the Metropolitan Council's preliminary 2040 population/household/household size/employment projections. (B, D) Action Sought City Council is asked to approve sending the attached letter expressing the City of Shakopee's concerns regarding the recently released 2040 projections. Background The recently released 2040 projections substantially reduce population/household/household size/employment projections from the previously adopted 2030 projections. These reductions can have substantial long term implications for investments that have already been made by the City and the future availability of funding resources for future roads, transit, sewer capacity, parks and perhaps more. In advance of a planned November 8, 2013 meeting with representatives of the Metropolitan Council, it is suggested that the attached letter be forwarded to the Metropolitan Council. Recommendation It is recommended that the City Council authorize Mayor Tabke to sign and transmit the attached letter to the Metropolitan Council. Budget Impact There is no direct budget impact from the proposed action. Relationship to Vision This item relates to City Goal B. Positively manage the challenges and opportunities presented by growth development and change, and City Goal D. Maintain improve and create strong partnerships with other public and private sector entities. Requested Action Offer and pass a motion authorizing Mayor Tabke to sign and transmit the attached letter to the Metropolitan Council in advance of the scheduled November 8, 2013 meeting. Attachments: MC response letter DRAFT (On City Letterhead) November 6, 2013 Mr. Todd Graham Principal Forecaster Metropolitan Council 390 Robert Street North St. Paul, MN 5501 RE: 2040 Population, Household, and Employment Forecasts for the Shakopee Dear Mr. Graham: This letter is written in response to the recently the received preliminary 2040 population/household/employment forecasts for the City of Shakopee. Like many other outer ring cities,the City of Shakopee is both surprised by, and concerned about the new 2040 demographic projections. In 2010,the City of Shakopee had a population of 37,076 (Source: U.S. Census). The Metropolitan Council's 2012 estimate of Shakopee's population is 38,252. The Metropolitan Council's adopted 2030 population forecast for Shakopee is 52,000 persons. In significant contrast, the new 2040 population projection is 49,800 persons.The projections for households, household size, and employment similarly show a reduction in totals in 2040 from the adopted 2030 projections. The 2040 projections raise a number of questions and concerns for the City of Shakopee, and these are detailed below: Policy Change. The 2040 population/household/employment forecasts appear to represent an abrupt change in the Metropolitan Area's growth philosophy. Whereas the 2030 projections recognize outer ring communities as growth centers, the 2040 projections basically mandate the redistribution of growth to the urban core. It has not been demonstrated that the assumptions that lead to this demographic redistribution are sound, and Shakopee believes that significant discussion, and perhaps modification of the assumptions is needed. This policy change will have a tremendous impact on the City of Shakopee and other"outer ring' cities in the Region. Since the adoption of its 2030 Comprehensive Plan, Shakopee has made a significant public investment in time, money, and infrastructure development toward 1 implementation of its adopted growth strategies. This apparent policy change at the regional level and the ramifications associated with such policy change would thwart years of well thought out growth management efforts and public investments. Forecast Methodology. The City of Shakopee has reviewed the Metropolitan Council's "Preliminary Forecasts Methodology' report dated September, 2013. While the City is in no position to debate the accuracy of the mathematics which were utilized, it is difficult to ascertain the various inputs which were used as part of the calculations. In this regard, we request that the inputs be clarified to assist in understanding the basis of the forecasts, and facilitate a discussion of whether these inputs should be modified before the projections are finalized. Assumptions. The 2040 population projections represent a radical change from growth trends experienced over the past two decades. The following table graphically illustrates the change in population growth experienced by and forecast for the City of Shakopee. Population 6,876 9,941 11,739 20,568 37,076 38,252 52,000 49,800 Households 2,109 3,226 4,163 7,540 12,772 13,113 21,500 20,100 Employment 3,030 5,556 8,500 13,938 17,800 18,870 31,000 28,800 Years 1970 1980 1990 2000 2010 2012 2030 2040 In consideration of past population growth patterns, the abrupt population changes illustrated above in 2030 and 2040 are considered unlikely. In contrast, a gradual (rather than abrupt) shift in density to the urban core is realistically expected. In review of the 2040 forecasts, it appears that Shakopee's 2010 population and household numbers have been used as a "baseline' in the 2040 forecasts. We believe the 2010 numbers are uncharacteristic, in that they reflect the slower rate of growth which occurred in the midst of the recent recession. Since Shakopee was the fastest growing city in the Region for ten years from 1996 through 2006, and since the development pace in the City of Shakopee has again increased, the City believes this baseline should be reconsidered. Growth Trends. The growth trends anticipated in the Metropolitan Council's 2040 population forecasts are not consistent with both national and local growth trends. National Trends. In a Forbes article entitled "America's Fastest-Growing Counties: The 'BurbsAre BacK' (September 26, 2013),the findings of demographer Wendell Cox are conveyed. Mr. Cox'analysis concludes that growth within suburbs and exurbs are making a strong comeback. In this regard, the following finding was made: 2 Of the 10 fastest-growing large counties all but two- Orleans Parish, home to the recovering city of New Orleans, and the Texas oil town of Midland- are located in the suburban or exurban fringe of major metropolitan areas. http://www.fo rbes.com/sites/ioel kotki n/2013/09/26/a m ericas-fastest-prowing- counties-the-burbs-are-back/ Local Trends. The national trend referenced above has also exhibited itself locally. In a Star Tribune article entitled "Twin Cities exurbs see a return of new home construction" (October 15, 2013),writer Jim Buchta notes that rising land prices in the most coveted spots of the Twin Cities have pushed developers to the fringes of the metro area, where they're reviving some subdivisions halted during the recession. In this regard, the following specific finding was made: Recently, there has been an uptick in housing construction in several exurban areas, including Hudson, Wis., Cologne, Farmington and Elko New Market, said Ryan Jones, regional director for the Twin Cities office of Metrostudy. During the worst of the housing crash, such far-flung communities represented as little as 11 percent of all metro-area housing construction, but new data show those areas now accounting for nearly 17 percent of all housing starts. http://www.startribune.com/housing/227932051.html The 2040 forecasts for the City of Shakopee are also inconsistent with a Scott County Community Development Agency (CDA) study entitled "Comprehensive Housing Needs Assessment for Scott County Minnesota" (December 2011)which projects a 10-year housing demand (2010-2020)for 4,116 dwelling units, or on average about 412 dwelling units per year. http://www.scottcda.org/files/Scott County Housing Study MN.pdf The City of Shakopee questions the Metropolitan Council's assumptions regarding housing trend changes because they do not appear to be supported by current national and local growth patterns. In this regard, it is suggested that the Metropolitan Council growth projections mirror projection models utilized by school districts. Over the last several years Shakopee's school district (ISD 720) has commissioned former state demographer Hazel Reinhardt to provide a significant demographic analysis that demonstrates that the District (whose boundaries are largely the same as the City's)will continue to experience growth in households that are in their child-bearing years, and continued growth in the population of school age children. 3 Regional Resource Impacts. It is anticipated that an outcome of the Metropolitan Council's change in growth philosophy will be the allocation of regional resources to the cities within the urban core and fewer resources allocated to outer ring cities. In this regard, the City of Shakopee is concerned that existing or programmed public investments (such as the Bloomington Ferry Bridge/TH 169, expansion of CH 101, interchange at CH 691TH 169)will be underutilized, and is also concerned that previously expected support for transportation, parks, housing and other projects will no longer be available, or at least will be severely curtailed on the theory that such funding is not supported by the new growth projections. Sewer Capacity Allocation. The allocation of Metropolitan Urban Service Area (MUSA) acreage related to the provision of sanitary sewer within the City of Shakopee has been made in response to the Metropolitan Council's 2030 growth projections and is reflected in the City's current 2030 MUSA allocation. Of particular concern to the City of Shakopee is that future growth may well occur largely through annexation activities under an existing orderly annexation agreement. The 2040 projections do not appear to take account of such agreements or the potential for development to occur through annexation. Nor is it clear that existing sewer capacity is available in the Shakopee-Chaska interceptor to serve such development, especially in and around the programmed TH 169/CH 69 interchange. Return on Investments Public Sector. The City of Shakopee, like other communities outside the "urban core", has made major investments in infrastructure over the years to serve population growth as forecasted in previous Metropolitan Council growth projections. Similarly, the Metropolitan Council itself has made substantial investments in the Blue Lake Wastewater Treatment Plant (which is hosted by the City of Shakopee). In this regard, it is critical that there be a mutual understanding as to why the 2040 growth forecasts are so radically different than those previously forecasted, and that they are supported by foreseeable market trends. The City of Shakopee expects that the new growth projections will result in a reduction of previously anticipated sanitary sewer capacity and likely a reduction in the City's present 2030 MUSA area. Such capacity limitations are expected to significantly impact new housing starts which, in turn, will reduce the demand for commercial services in the City. The City of Shakopee has expended much effort to implement its various plans including its 2030 Comprehensive Plan. For several years,the City has invested a significant amount of time and money in a city economic development strategy. Key to such strategy is the promotion of commercial and industrial development along the TH 169 corridor. The area around the planned interchange at TH 169 and CH 69 has been identified by various economic development studies produced by Scott County Association for Leadership and Efficiency(SCALE) as a "high priority" development area within Scott County. 4 The 2040 growth projections identify areas of adjoining Jackson Township(including the TH 169/CH 69 interchange area), which are subject to the existing orderly annexation agreement as agricultural use areas through 2040. This obviously contradicts the both Scott County and the City of Shakopee's land use planning and economic development plans, negating past planning efforts and infrastructure investments consistent with those plans. The City of Shakopee views the TH 169 corridor as a unique opportunity to expand not only the City's, but also Scott County's tax base and create local employment opportunities. A reduction in the City's available MUSA and inability to develop at least a portion of the TH 169 corridor within the next 27 years would have a profoundly negative impact on both the City of Shakopee and Scott County. Private Sector. The ability to provide urban services to land significantly influences land value and affects investments in land. It is expected that the potential for prohibition of urban services to land previously expected to receive such services will lower property values, and not be well-received by the local and regional development community. Household Size. The City of Shakopee is of the opinion that the household size factor utilized in the population projections is questionable and should be reviewed. Like many outlying cities, the City of Shakopee has historically attracted young couples who are in their prime child- bearing years who purchase homes with the idea of starting families. That this is the case in Shakopee is further supported by the ISD 720 demographic analysis referred to above. Shakopee reasonably expects that this trend will continue into the future because of lower land costs than inner ring cities, quality schools and open space. According to the 2010 U.S. Census,the City of Shakopee had an average household size of 2.83 persons per household. For 2040, a household size of 2.24 persons per household is projected by the Metropolitan Council. Based on past experience, current development trends, and the demographic analysis done for the Shakopee school district,the City of Shakopee believes strongly that the City's household size will continue to be greater than the Metropolitan Area average (2.51 persons per household in 2012). In this regard, question exists whether or not the 2040 household size projection is based upon data or is simply an assumption. The City of Shakopee respectfully requests that the projected 2040 household size for the City be re- examined. It is our hope that this correspondence will prompt a reconsideration of and revision to the 2040 population/household and household size/employment projections. Thank you for your consideration. 5 Sincerely, Brad Tabke Mayor, City of Shakopee cc Shakopee Mayor and City Council 6