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Prior Lake, MN 55372
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CITY COUNCIL AGENDA REPORT
MEETING DATE: AUGUST 12, 2013
AGENDA #: 5F
PREPARED BY: LARRY POPPLER, CITY ENGINEER / INSPECTIONS DIRECTOR
PRESENTED BY: LARRY POPPLER
AGENDA ITEM: CONSIDER APPROVAL OF A RESOLUTION REQUESTING ADVANCE-
MENT OF MUNICIPAL STATE AID FUNDS
DISCUSSION: Introduction
The purpose of this item is to make a request to MNDOT for the advancement
of Municipal State Aid Funds.
Historv
Municipal State Aid is created in the State Constitution. Nine percent of the gas
tax and vehicle tab fees make up this account. Funds from the account are dis-
tributed to Minnesota Cities based upon a formula. The program allows cities to
borrow from future year allocations. In fact future year allocation borrowing is
encouraged as it is considered a measure of need and actually increases the
� amount of money available for our use in the long run.
The City of Prior Lake depleted our State Aid Construction Account balance in
2012 for the construction of the Arcadia Avenue/County State Aid Highway 21
Intersection Project.
On August 27, 2012 the City Council approved the 2013-2017 Capitat Improve-
ment program. The plan includes two-2013 projects on designated State Aid
routes.
• County State Aid Highway 12, Phase IV
• Main Avenue/Ridgemont/Trunk Highway 13
In November of 2012, the City Council requested advancement for these pro-
jects in an amount of $400,000.
The City Council awarded the Main Avenue/Ridgemont/TH 13 project on July
22 2013. The bids for that project were higher than expected. It was atso
determined by MNDOT that this project is eligible for more State Aid than origi-
nally anticipated during the CIP process.
Current Circumstances
The City will receive the annual allotment in 2013, however expenditures are
expe�ted to exceed the annual allotment.
Minnesota State Statutes 162.14, Subdivision 6 allows for advances from our
State Aid Construction Account.
Conclusion
Based on the final bid amount for the Main Avenue/Ridgemont/TH 13 project,
it is recommended that the City request $1,250,000.00 in advancements from
the State Aid Construction Account.
ISSUES: As the council is aware city improvement projects are paid for largely through
one or more of the following: tax levy, special assessments, grants, Municipal
state aid and from various city funds. State aid tends to be a significant source
of funding for projects over time. Therefore it is important to recognize that al-
location increases in one year are likely to mean fewer funds available in sub-
sequent years.
FINANCIAL If the City Council decides not to make a request for advancement, bond
IMPACT: amounts or other funding sources would need to be increased to fully fund
these projects.
ALTERNATIVES: There are three alternatives for the City Council to consider:
1. Approve Resolution 13-XX requesting the advancement of State Aid Funds.
2. Deny this item for a specific reason and provide staff with direction.
3. Table this item to a certain date in the future.
RECOMMENDED
MOTION: Alternative #1
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4646 Dakota Street SE
'�'l�so'� Prior Lake, MN 55372
RESOLUTION 13-xxx
A RESOLUTION REQUESTING THE ADVANCEMENT OF MUNICIPAL STATE AID FUNDS
Motion By: Second By:
WHEREAS, The City of Prior Lake is implementing Municipal State Aid Street Projects in 2013 which
will require State Aid funds in excess of those available in its State Aid Construction
Account; and
WHEREAS, The City of Prior Lake is prepared to proceed with the construction of said projects
through the use of advance of encumbrances from the general State Aid Construction
Account to supplement the available funds in their State Aid Construction Account; and
WHEREAS, Repayment of funds so advanced will be made in accordance with the provisions of
Minnesota Statutes 162.14, Subdivision 6 and Minnesota Rules Chapter 8820.
NOW THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE,
MINNESOTA as follows: �
1. The recitals set forth above are incorporated herein.
2. The Commissioner of Transportation is hereby requested to approve this advance for financing
approved Municipal State Aid Street Projects of the City of Prior Lake up to an amount of $1,250,000,00
in accordance with State Aid Rules.
3. Repayments from the 2014 accrual to the Municipal State Aid Street Construction Account of the City of
Prior Lake is hereby authorized.
PASSED AND ADOPTED THIS 12th DAY OF AUGUST 2013.
YES NO
Hedbe Hedbe
Keene Keene
McGuire McGuire
Morton Morton
Souku Souku
Frank Boyles, City Manager
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