09.g City Administrator Report1
Staff Report
Date of Meeting: April 15, 2025, City Council Meeting
To: Mayor and City Council
From: Kyle Morell, City Administrator
Re: City Administrator Report
______________________________________________________________________________
Gateway Trail Project
City Engineer Ryan Goodman and I met with Nathan Moe and Kent Skaar from the Minnesota
Department of Natural Resources (DNR) on Monday, July 10, 2023. We discussed the next steps in the
work plan, including the environmental review, soil borings, and topographical survey. Ryan and the
DNR are working to complete these items before the end of the year. This group plans to meet monthly
to ensure the project stays on schedule.
The LCCMR funding has a hard deadline of June 30, 2027. All spending must be completed before that
date. The City plans for 2026 construction to complete the project before the grant funding disappears.
Our DNR Grant Administrator has also contacted me. LCCMR administers the project, and the funding
comes from the DNR.
The latest funding updates are close to $1 million over previous estimates. This is primarily due to
changes in unit pricing for the original estimates in 2019 and 2021 and changes to the project's scope.
Project Engineer Isiah Bubany detailed this increase in a memo at the March 18, 2025, City Council
meeting.
Staff is attempting to set up a site meeting with a resident who has property on the easement to discuss
their concerns. We hope to hold that meeting this month.
Water Tower Barn Wetland Trail Project
The City’s LCCMR proposal was selected to move forward in the review process. I presented it to the
LCCMR committee on June 28. The Committee met on July 31 to determine funding amounts for all
projects. The City received $907,000 of the $998,000 it requested. The request will now be moved into
the LCCMR bill that will be presented to the Legislature for approval in this upcoming session. If
approved, we have until 2028 to complete the project.
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The LCCMR bills are advancing through the House and Senate. Approval is expected before the end of
the 2025 Legislative session.
At the March 5, 2025, Work Session, the Council approved soil boring work for the wetland boardwalk.
The SHA hopes to begin constructing the water tower barn this fall. In the next couple of months, they
will bring several agreements before the Council for approval. The City will have to sign its grant
agreement with DEED for the bonding money, a lease and use agreement will be needed with the SHA
for the operation of the site and building, and grading and watershed permits will be required.
Bliss Sewer Project
The City’s presentation to the Senate Capital Investment Committee went well. The Committee
Chairman, Senator Pappas, understood our unique situation. Senator Housley was also on the call. If a
bonding bill is considered, she will continue to push for funding in the upcoming session. Staff will
contact newly re-elected Representative Hill to affirm our desire to be included in any upcoming House
bonding bill.
Senators Housley and Pappas introduced Senate File 892 on February 3, 2025. A bill for an act relating
to capital investment, appropriating money for capital improvements to wastewater infrastructure in the
city of Scandia, and authorizing the sale and issuance of state bonds. The bill was referred to the
Committee on Capital Investment.
Representatives Hill and Anderson introduced House File 1081 on February 17, 2025. A bill for an act
relating to capital investment; appropriating money for capital improvements to wastewater
infrastructure in the city of Scandia; authorizing the sale and issuance of state bonds.
The bill was read for the first time and referred to the Committee on Capital Investment.
The latest project estimates from our engineer suggest the cost of the project may exceed the $1.6
million that is in both bills. In a presentation to the House Capital Investment Committee on March 4,
2025, City Lobbyist Les Heen notified the Committee that most recent cost estimate for the project is $2
million.
Below is an update from Les Heen, our lobbyist on the changes of a bonding bill.
Will there be a bonding bill? That’s one of the big questions remaining for the 2025
session. House and Senate Capital Investment Committees continue to hold hearings,
many of which focus on local infrastructure bills. Because the state constitution requires
a 60% supermajority to approve debt issuance, a bonding bill require votes from both
parties. With the House tied, and the Senate with a one-vote DFL majority, it is not clear
what the path is to pass a bonding bill. House and Senate leaders have talked about a
bonding bill spending target, but they are far apart on how much could be spent.
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In some years, a Capital Investment Bill will include a large general fund (cash)
section. This would only require a regular majority. However, cash is very short this year
so we should not expect a general fund alternative.
We continue to work with the authors of the Bliss project bill, Senator Housley and
Representative Hill. They are committed to this project. We will be working with them
on a regular basis to do everything we can in the hopes that a bonding bill can pass.
Cannabis
Below is an update from our City Attorney on the latest from the Office of Cannabis Management
Before the Office of Cannabis Management (OCM) can begin issuing licenses, they needed to have their
rules, which are different from the statutes, approved by an Administrative Law Judge. That approval
came on Monday, April 7th. These rules will be published at some point this month and can be found
here: https://mn.gov/ocm/assets/Draft_Rules_AR4844_tcm1202-674242.pdf
Importantly, this means that after the rules are published, OCM can begin issuing licenses for non-
capped license types. As a reminder, the non-capped licenses include:
Microbusiness
Wholesaler
Transporter
Testing Facility
Delivery Service
Medical Combination License
The licenses for capped licenses will proceed after OCM holds lotteries. Capped licenses include:
Mezzobusiness (100)
Cultivator (50)
Manufacturer (24)
Retailer (150)