Lake Elmo City Council — Transcript

Tuesday, July 14, 2026

Future of Old City Hall

Request-Based Parking Restrictions Evaluation Process

Draft Capital Improvement Program (CIP) and Strategic Financial Planning

Storm Water Funding for Street Projects

Votes (4)

Old City Hall Options Discussion

No formal action taken; council provided feedback and discussed next steps.

The council discussed various options for the Old City Hall, weighing the high cost of repairs and the low projected return on investment from leasing against the desire for flexibility given potential future developments on adjacent sites. The sentiment leaned towards avoiding long-term real estate investment and considering demolition with temporary parking as a flexible solution.

Evaluation of Request-Based Parking Restrictions

No formal action taken; council provided feedback on the proposed framework.

The council reviewed a staff proposal for a structured process to handle resident requests for parking restrictions. Key points included defining criteria for administrative decisions versus those requiring public hearings, and ensuring that changes are primarily driven by public safety concerns rather than mere preference.

Draft Capital Improvement Program and Strategic Financial Planning

No formal action taken; council provided feedback for future adjustments to the plan.

The presentation covered the extensive 10-year CIP and the city's strategic financial plan to manage debt, build reserves, and achieve revenue stability. Debate arose over the rate of increase in capital spending, with some council members advocating for a slower, inflation-plus-rate increase, while others argued that current increases are necessary to overcome past underfunding and maintain critical infrastructure. The goal of becoming debt-free by 2050 was discussed.

Storm Water Funding for Streets

No formal action taken; council provided feedback for further analysis.

The council debated the feasibility and methodology of transferring storm water funds to cover storm water components of street projects. This would require an annual 10% increase in storm water utility rates. The challenge involves balancing accurate cost allocation to utility payers with the administrative burden of detailed tracking, and the need to build up the storm water fund to support these transfers.

Notable Quotes (16)

So, last time we had some options. This time we kind of paired it down a little bit looking at option one, demolish the building, expand parking, two, lease the building to a business. Um, we could keep parking located in the back for city hall and build a new parking lot in front, keep the building and revisit next year or monitor the school site and partner with future developers on that site.

Staff/Presenter [0:00:34]
Old City Hall Options Discussion

I think in any case, shape or form, you'd start at about, you know, I'd say easily it'd be more like 52 to 54,000 in net income. And what that would be is it'd be an easy building to have if you leased it, a triple net lease where you bring in a tenant, they have it, they pay all the bills.

Scott Kragnus/Metro East [0:11:00]
Old City Hall Options Discussion

I I have no interest in trying to go 20 years out to have a net cash flow of 29,000 when there's still there's always going to be other other variables that we can't control for during the next two decades. I don't see a substantial value gain there.

Council Member Hearn [0:20:12]
Old City Hall Options Discussion

I look at and say, do we really want to be in the real estate business for 5,000 bucks a year of income? I mean, if we if we think the space could be used for office or someone could lease it, we should sell it.

Mayor [0:23:45]
Old City Hall Options Discussion

Currently city does not have a formal process for evaluating residents requests on existing roadways... To address this, staff is proposing development of a formal administrative review process.

Staff/Presenter [0:30:17]
Evaluation of Request-Based Parking Restrictions

I like the idea of if there is a concern um and that concern could be addressed by current code. I I think it's very reasonable. Um, I just want to have some sort of fail safe for maybe other residents around that area if for some reason they have the differing opinion.

Council Member [0:32:00]
Evaluation of Request-Based Parking Restrictions

I personally would need it to be it's a public safety reason why this change needs to occur. Yeah, that's the only because otherwise it's a public street.

Council Member [0:38:09]
Evaluation of Request-Based Parking Restrictions

We have a total of 156 projects totaling just over $137 million. This again, it's a 10-year CIP. So, that's over 10 years.

Director Hadler [0:44:11]
Draft Capital Improvement Program and Strategic Financial Planning

I feel like what we're doing here is we're saying, 'Hey, these are all the projects and then let's raise a levy based off of that.' I'd like to take a step back... I think we need to bring it down. And so, my feedback would be this needs to come lower.

Council Member Hearn [0:46:11]
Draft Capital Improvement Program and Strategic Financial Planning

I would love that in an ideal world um the struggle and part of the um reason that we really are trying to look at this strategically is that capital expenditures typically are not in a smooth uh you know incline across time.

Director Hadler [0:47:37]
Draft Capital Improvement Program and Strategic Financial Planning

I will say that the years past the city limiting two to 3% has put us in an unfortunate uh financial situation and behind the eightball.

Chief [0:55:40]
Draft Capital Improvement Program and Strategic Financial Planning

My goal is to get a debt free by 2050 if not sooner because I know that 20 30 40 years from now this city is going to have a huge huge amount of infrastructure work that needs to be done.

Director Hadler [1:02:59]
Draft Capital Improvement Program and Strategic Financial Planning

I came up with a really really really rough number of $480,000 average for the next 10 years that is only on the local street improvements does not include any of our transportation projects.

Director Hadler [1:15:37]
Storm Water Funding for Streets

So if we if we add in the 480 we need to up it to 10% and we're not achieving that solveny for another two years. Correct. Okay. Okay.

Staff/Presenter [1:18:04]
Storm Water Funding for Streets

The problem I have with it is the storm water utility payers are different than the taxpayers and we want to try and treat these two everybody pays something for MS4 though right everybody pays for there are very very few people that pay that don't pay taxes that pay storm water.

Mayor [1:21:49]
Storm Water Funding for Streets

I'm not saying it's difficult. I'm saying it's more time consuming and if we and we need the revenues to support it and so if you guys are okay with increasing the fund the the storm water rate by 10% per year for the next 10 years and we can we can make it work on our end and I can I can adjust our practices and try and find efficiencies wherever I can. I'm not saying it's not doable. I'm just saying I'm I prefer efficient and path of least resistance where I can.

Director Hadler [1:24:23]
Storm Water Funding for Streets

Ordinances & Resolutions (9)

Space needs studyPlan

Document discussing issues with the Old City Hall building and identifying over $800,000 in repairs.

Broker price opinionOther

Assessment of commercial value and potential leasing income for the Old City Hall.

Building reportOther

Report detailing issues with the Old City Hall, including non-code-conforming bathrooms and rotted siding.

Purchase agreementOther

Agreement for the sale of the elementary school site, impacting the future of adjacent properties.

Capital Improvement Program (CIP)Plan

A 10-year plan detailing 156 projects totaling over $137 million, primarily for public works infrastructure.

PlanetOther

Software used for managing fleet and equipment information in the CIP.

Utility studyOther

Updated study from winter informing suggested annual increases for storm water utility rates.

MSAS (Minnesota State Aid System)Other

Classification for some collector roads that receive state funding.

SEQ (Statement of Estimated Quantities)Other

Engineering document used to detail project costs, including potentially for storm water.

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