City staff told the Lake Elmo City Council at a July 8 workshop that the draft 2026'1035 Capital Improvement Plan lists 145 projects totaling about $127 million to $133 million, and that most of the cost is concentrated in public works projects such as streets, water, sewer and stormwater. Director Handler said the city moved to a 10-year CIP in 2024 to get a longer view of capital needs and that the plan includes projects costing at least $25,000 with a useful life of five years or more.

"This is just a, sort of preliminary discussion of the CIP. We don't adopt this until the final version until December," Director Handler said, noting the plan's inclusion of mission-aligned strategies such as resilient infrastructure and "balanced finance." Staff presented department-level summaries and said the CIP currently counts a $50 million water treatment plant among its largest projects.

The draft relies on multiple funding sources: bond debt, an infrastructure levy, utility fees, Minnesota state aid and transfers from the general fund. Handler said the CIP figures are shown in today's dollars and will be adjusted for inflation when projects move to implementation. Staff modeled conservative growth and cash-flow assumptions but warned that development pace and grant availability will change outcomes.

Council members raised concerns about the levy impact. Handler's slides showed combined debt-service and infrastructure levies rising from about $3.3 million today to roughly $6.0 million by 2035 under the current funding strategy. "I think we need to take a look at 50 million dollars. Five million a year is a big number," one council member said, urging staff to test scenarios and the public's willingness to sustain higher levies.

Council and staff discussed alternatives to large cash transfers, including lease-purchase options and interfund loans. Handler described an interfund loan the CIP models for a $5 million transfer to the street fund and said any interfund loan would be repaid over time; council members noted those loans carry an opportunity cost in lost investment earnings.

Staff said they will refine the CIP before the December adoption, run additional sensitivity analyses on levy and debt scenarios, and return with further detail on possible strategies to limit tax impacts while addressing infrastructure needs.