03-25-2026 Council Packet - Laserfiche WebLink

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Staff Report To: Mayor Fischer and Members of the City Council From: Eric Seaburg, City Engineer Date: March 25, 2026 Re: 2026 Little Canada Road Improvements – MSAS Advance Request Action To Be Considered: Motion to approve, table, or deny the following: • Resolution authorizing request for advanced Municipal State Aid Construction Funding Background: The upcoming Little Canada Road and Country Drive Improvement Projects are eligible for reimbursement using the City’s Municipal State Aid (MSA) Construction Funds. The City receives an annual MSA construction allocation of approximately $500,000, funded through the Highway User Tax Distribution Fund (state gas tax, vehicle registration tax, and motor vehicle sales tax revenues). The City’s current MSA fund balance is approximately $1.01 million. The two projects will generate $3.36 million in eligible MSA expenses. If the City seeks reimbursement for all eligible costs, the account will temporarily go negative by about $2.35 million, requiring the use of advance MSA funding. The balance would recover over the next five years through annual allocations. The projects also include $7 million in federal grant funding, which is reimbursable, meaning the City must incur costs first, then request reimbursement from MnDOT. Advancing MSA funds will help maintain a positive balance in Fund 450 while the City cash‑flows construction and awaits federal reimbursement. Strategic Priority: N/A Source Of Funds: The Little Canada Road Project (PW 67) and the Country Drive Improvement Project (PW 40) are already included in the 2026–2035 Capital Improvement Plan (CIP). The CIP revenue projections assume the City will advance a portion of MSA funds to maintain a positive fund balance throughout the 10‑year planning period. Staff Recommendations: Staff recommends that the City Council pass a resolution authorizing a request for advanced Municipal State Aid Construction Funding. Attachments: • Resolution