Lake Elmo City Council — Transcript
Wednesday, November 12, 2025
Highway 36 Lake Elmo Avenue Project Update
Short-Term Rental Discussion
Strategic Financial Plan Overview
CIP Future Project Discussion
Votes (4)
Highway 36 Lake Elmo Avenue Project Update: Keats Avenue Access and Allowable Working Hours
Dissent: Mayor and Council Members Holtz, Jaguchich, and Kraus voiced strong opposition to the proposed closure of Keats Avenue's eastbound-to-southbound right turn lane without clear safety data or alternative considerations.
Andrew Geon from Washington County presented the project overview, schedule, preferred alternative, and funding details for the Highway 36 and Lake Elmo Avenue intersection improvements. A key discussion point was the proposed closure of Keats Avenue as part of the project, which MDOT linked to significant state funding for a new frontage road. The Mayor and Council members expressed strong reservations about closing the existing right turn lane from eastbound TH36 to southbound Keats Avenue, citing lack of crash data for that specific movement, resident concerns, and questioning the 'reasonable access' and 'safety first' justifications without objective performance measures. The discussion also covered requests for extending allowable construction working hours to ensure timely project completion, with Council generally open but suggesting limitations on Sunday work.
Short-Term Rental Discussion
Dissent: Council Member Jaguchich voiced strong opposition to allowing any changes that would permit short-term rentals.
City staff presented an overview of the current bed and breakfast ordinance, the city's prohibition on short-term rentals (STRs), and how neighboring communities and state/county regulations handle them. It was revealed that approximately 11 STRs are operating in the city despite being prohibited, with no complaints received to date. Council members debated the merits of allowing STRs, balancing property owner rights with concerns about residential character, potential nuisance, and the significant staff effort required for licensing, inspection, and enforcement. The prohibitive cost of R1 occupancy conversion under state building code was also a point of concern for potential STR operators.
Strategic Financial Plan Overview and Foundational Assumptions
Dissent: Council Member Jaguchich stated he voted against the levy previously.
Finance Director Hadler presented the initial framework for a strategic financial plan, aimed at guiding the city's fiscal decisions over the next 25-50 years. The plan integrates existing financial policies, staffing projections, capital project scenarios, and debt management strategies. The council was asked to provide feedback on foundational assumptions, potential additional priorities (e.g., clear educational materials for incoming council members), and the starting point for the 2026 infrastructure levy. No significant concerns or desired changes to the proposed approach or current assumptions were raised by the council, aside from reinforcing the need for clear communication and education for future council members regarding the plan's insights.
CIP Future Project Discussion
The Administrator facilitated a discussion on the Capital Improvement Program (CIP), specifically regarding the future street projects. The council acknowledged the city's 'catch-up' efforts on street reconstruction, with the initial five to six years of the 10-year CIP addressing current needs. Beyond that, projects become more speculative. Council members expressed concern about the overall magnitude of street-related spending (debt service, construction, maintenance) compared to other city operations. Direction was given to staff to refine the CIP's financial analysis by not including developer-driven projects or highly speculative, low-priority projects in the cost tallies, while still tracking them for planning purposes.
Notable Quotes (15)
I don't understand why you would eliminate the frontage road while maintaining that um because it it doesn't show any crash data. It's not any harm to that intersection other than past experiences that the state has had and where they have eliminated that right turn lane.
Under the cost participation policy, improvement is funded under this cost participation policy where MINDOT will participate in local frontage cost, including rightaway costs when access to the trunk highway is being eliminated. The improvements provide safety and operational improvement benefit to the trunk highway. So, that's directly out of the cost participation policy, meaning we can participate in local frontage road construction and pay for those improvements with the elimination of of an access point.
I fully agree it there's no discernable data to show there's a safety issue going eastbound to south. I see no reason for any tax dollars from a state, county, or city level to be used to eliminate something when the number one goal of this project is safety.
By extending hours, it simply creates flexibility uh for extended hours or weekends as needed really just to help ensure um the project is completed on time.
Currently, we have bed and breakfastes that are um allowed, but they have to be owner occupied. So we don't get too many requests, but we do get requests from time to time to people that want to essentially apply for a bed and breakfast, but they don't want to live there, right?
I'm I do not support that any change. I think we should avoid short-term rentals as much as we can. We're a quiet residential community. That's part of our character. And I don't see what we get from benefit from short-term rentals as a community.
I I personally don't have an an issue itself with short-term rentals within a itself. But obviously in terms of scale and scope that's nothing. I don't want it everywhere. I would want it a specific limit, specific zoning.
So I kind of like to have some guard rails on it. But I also think sometimes that government should just stay out of some of those things.
This process is really meant to take all of those puzzle pieces and bring them together into our uh an overall look of the the city as a whole.
I want the city to be sustainable 25 years, 50 years from now. And a really large portion of that is going to be making sure that we plan ahead for those financial investments that are needed um especially for our infrastructure.
I think one thing to consider because I mean when the mayor and myself and a previous council member joined, you know, we were told at a very high level, well, this is what the, you know, staff has, you know, one staff member has decided is is our fiscal plan, but we really have the plan and the amount of work that you've done, you and and Nina and others have done over the last year, two years to compile this. I I don't know what what you have then for moving forward. We'll all be gone at some point, but to make sure that there is something uh an easy to um consume educational feature for all incoming council members to say, look, this is where we're at. This is kind of the the 20 year, 30-year picture. here's the reasons why certain decisions were made and here's how this affects this because usually when when I didn't run for council to be like I you know this topic we ran on for various reasons for but not necessarily to discuss the ins and outs of this exact topic.
Councelor Hearn had a concern about just the overall magnitude of it, right?
The first five years, maybe six years are already neighborhoods that need reconstruction as they stand today. The recommendation today would be so not five years from now, but today. So, they're still part of that catchup.
We have almost $4 million in debt service, a great portion of which is related to streets. We have $4 million a year in street construction. That's $8 million for streets and we have $600,000 for maintenance. We have close somewhere between eight and n million we spend every year on streets one way or the other. and we have 6 million we spend to operate the entire rest of the city for operating people person. So it you know it it seems like there's this imbalance there somewhere.
I would be fine with even all cost for a priority five never be tallied as well would be my two cents because to me if it's number five it's not even something that we've it's literally not under actual consideration it's it's a high level placeholder.
Ordinances & Resolutions (25)
Governs allowable construction working hours.
Protections for River Valley Church in property acquisition.
City's 10-year plan for capital projects and funding strategies, including $5M for TH36 project.
State policy governing MDOT's funding for local frontage road construction when trunk highway access is eliminated.
City code currently prohibiting short-term rentals.
Governs occupancy classifications for lodging, impacting short-term rentals.
Governs occupancy classifications (R1, R3) for lodging, impacting short-term rentals and ADA compliance.
City ordinance allowing owner-occupied bed and breakfasts.
Hotel classification under building code, requiring ADA compliance.
Typical home classification under building code.
Washington County uses this to license short-term rentals.
Includes rules on private events, maintenance, parking, and a 'three strikes you're out' nuisance policy for STRs.
Oak Park Heights' approach to short-term rentals as Conditional Use Permits.
New city plan to analyze finances holistically and guide long-term fiscal health.
City policy guiding replacement of city vehicles and equipment.
Feeds into the overall Capital Improvement Program for street maintenance.
City's strategic plan informing annual budget items.
Dictates how much money the city holds in specific funds.
Guides employee pay within the city.
Recent study informing staffing levels in public works.
Study guiding administrative and finance staffing, now fully implemented.
Basis for revising development projections related to water and sewer revenues.
Specific fund analyzed in financial plan scenarios for infrastructure projects.
Upcoming agenda item related to a large land parcel.
Registered Land Survey, a continued item from a previous meeting.