Mankato parks put pressure on budget, but city staff has a plan

Dec. 10—MANKATO — Rapid growth has caused new neighborhoods to spring up in multiple places in Mankato, which has left the city a bit behind on its goal of having a neighborhood park within safe walking distance of virtually every home.

Getting caught up will require building new parks in the Kearney Pond area amid the hundreds of new apartments north of the Madison East Center, at the Groh farm residential development along old Highway 14 midway between Mankato and Eagle Lake, and on land by the city Public Works Center to serve a mix of new and older housing south of Hoffman Road.

More than $1.8 million from a variety of funding sources is planned for those parks over the next five years. About $3 million more is slated for fixes and improvements to existing neighborhood parks ranging from pickleball courts to playground replacements to trail fixes at Rasmussen Woods.

And city administrative staff have a tentative plan to get all of that done while still setting aside money for long-term needs at regional athletic facilities.

"Whether that's replacement, whether that's expansion or whether that's new facilities, we've got dollars set aside," Administrative Services Director Parker Skophammer said of the funding proposal.

The key element of the plan would reserve a portion of any surplus revenue from the half-percent sales tax for inevitable major costs at the Franklin Rogers baseball park, the municipal pool at Tourtellotte Park, the youth softball fields under construction at Thomas Park, the youth baseball complex at Community Athletic Fields, the curling center at the Caledonia Community Center, the adult softball fields at Jaycee Park and the indoor ice sheets at All Seasons Arena.

Many of those regional facilities are undergoing extensive improvements and repairs or have recently been targeted for upgrades, including $6.4 million for Thomas Park, $8.4 million for Tourtellotte pool and $4 million for Franklin Rogers. What city leaders are hoping to avoid is an empty savings account in the years and decades ahead when fixes are needed.

Under the proposal presented to the council, half of any sales tax revenue beyond what is budgeted could be set aside for future needs of regional athletics facilities. This year, proceeds of the half-percent tax are expected to end about $400,000 above the $5.7 million budgeted — meaning $200,000 would be added to the savings account for the sports facilities.

Because the sales tax is vulnerable to economic downturns, staff tend to be conservative in estimating the future revenue it will produce, making surpluses more common. If excess sales tax revenue is hefty enough to cover the future needs of regional sports facilities, Mankato could focus more of its other funding streams on the new neighborhood parks and on repairs and improvements to existing parks.

The other half of any surplus sales tax revenue would be reserved for handling anticipated inflationary increases in the cost of major projects the council is planning to finance through a $12 million bond sale in 2026 — bonds that will be repaid with a portion of annual sales tax proceeds. The most commonly discussed possibility for a chunk of that funding is new indoor ice sheets, but other projects are also possible. By reserving some unused sales tax revenue for the 2026 bond issue, the city could maintain its buying power even in a time of inflation.

"The $12 million today isn't $12 million in 2026," Skophammer said.

Preparing for those inflationary expenses makes it less likely the city would have to fund some of those big-ticket projects with another borrowing instrument known as charter bonds. In turn, that would mean the charter bonds could be dedicated toward those neighborhood park projects that aren't eligible for sales tax funding under state law. The city is limited in the amount of borrowing it can do through charter bonds under state law, but they can be used for local parks.

"We have the ability to use charter bonds for new parks, which are often difficult to finance," he said.

Charter bonds were used in the past for creation of Riverfront Park and the construction of the Sibley Park farm-themed playground, among other things. The new plan would use those bonds for the Kearney Pond neighborhood park ($340,000 in 2024), the Groh farm neighborhood park ($500,000 in 2025) and the Public Works Center park ($325,000 in 2026).

Other anticipated sources of funding for those projects include mandatory park-creation payments imposed on housing developers, federal funding for new parks that serve lower-income neighborhoods, state Department of Natural Resources grants for park creation and a share of the $525,000 in property tax revenue allocated by the City Council for parks each year.

The complex parks-funding plan, if the council sticks to it when setting budgets in coming years, would finance almost all of the priority parks work by the end of 2027.

A notable exception — because a source of funding hasn't been identified to cover the entire cost — is a large splash pad at a yet-to-be-determined location. The water-infused playground, which has money set aside in the parks budget to cover the first $600,000 of its cost, could move up on the priority list once a couple of key questions are answered, according to Skophammer.

"What are the size and amenities that the council and constituents want to see?"

There is encouraging news, though, for Mankatoans who care more about their neighborhood park rather than the prominent regional facilities that tend to get the most attention. Even as the city lays the foundation for financing high-profile projects, work is being done on the less visible work of fixing restrooms and play structures and picnic shelters and other amenities in small parks around Mankato.

"Certainly we've made quite a bit of progress in replacing quite a few park systems in the last several years," Skophammer said.