The Prior Lake City Council approved its Capital Improvement Plan for the next five years during its meeting held Aug. 12.
The plan outlined major improvements recommended by city staff and addressed estimated project costs, funding sources and tax impacts. Due to the large expenses associated with the improvements, the city will be required to issue capital improvement bonds for much of the projected expenses. The presentation also provided specific financial impact data related to this fall’s parks referendum seeking $60 million for improvements, and if approved by voters, would also require bond funding.
Assistant Finance Director Nicole Klekner and Public Works Director Nick Monserud led the presentation that included substantial improvements for pavement, equipment, new parks, facilities management, technology upgrades and water/sewer services.
Major pavement projects are planned in each of the next five years. In 2026, improvements are slated for the Northwood Road area, Lord’s Street bridge and the Marsh Drive extension. Significant work is projected to occur the following year on County Road 17 (Marschall Road), with other neighborhoods identified for improvements in the following three years, including Green Heights, Adelmann, Frost Point, Sunset Hills, Fish Point Road and Raspberry Ridge. Much of the funding for pavement improvement projects will come from fees added to utility billings for that purpose which totals approximately $1.5 million in each of the five years in the proposed CIP period.
The annualized equipment cost for the city is projected at $1.6 million, with the five-year total estimated at $10.6 million, which includes $4.8 million for the purchase of a ladder truck in 2027 and a pumper truck in 2030. Purchase of street maintenance vehicles was estimated at $3.9 million over the five-year period.
The plan included $5.7 million for park improvements, with $250,000 allocated in each of the five years for playground replacement needs. Most of the funds will be spent in 2026 on replacing parking lots connected to the Ponds complex, with another $906,000 allocated for Memorial Park improvements. City staff also projects $2.15 million will be needed to establish new parks in developing neighborhoods that will be paid for with fees assessed on new developments.
Monserud said the city will issue $5.5 million in bonds over the five-year CIP period for major repairs at Prior Lake City Hall and the Prior Lake Police Station, including roof replacement, heating and air conditioning updates, parking and safety enhancements. In total, repairs are estimated at $6.9 million and include other work being done on the fire stations, Lakefront Pavilion, Prior Lake Library and Club Prior, in addition to the city’s maintenance center.
Funding for utility improvements will come from both rate increases and debt issuance. Utility fees charged to residents and business owners for water, sewer and stormwater are expected to increase an average of 5% beginning in 2026.
Because the outcome of the park referendum vote in November is not known, financial data related to its bonding was identified separately. If the proposed $60 million initiative passes, bonding would occur in each year between 2026 and 2031, with $5 million planned for years 2026, 2028 and 2030; $15 million is projected in 2027, 2029 and 2031. If the referendum is approved, the estimated annual tax impact on a $433,000 home over the life of the bonds was $265 per year, or $22 a month by the end of the six-year bonding period.
The council unanimously approved the Capital Improvement Program as presented, along with the issuance of CIP bonds, adoption of the facilities capital improvement plan, issuance of street reconstruction bonds and adoption of the street reconstruction plan.
