Forest Lake Airport Commission backs MnDOT grants for runway, taxiway and apron despite local funding gap

The Forest Lake City Airport Commission voted Dec. 3 to recommend that the City Council accept three Minnesota Department of Transportation (MnDOT) capital grants to fund an apron expansion, a main taxiway extension and a runway extension, while warning the airport lacks the cash on hand to cover the smaller local match created when MnDOT reduced participation midstream.

Administrator Stotts, Forest Lake City’s administrator, told commissioners the awards were for the three projects and that MnDOT’s reduction from the initially advertised 95% participation to 90% “means we do not have that money in the airport fund at this point in time.” He said staff has proposed that the city general fund front the money as an interest-free interfund loan to be repaid over 20 years.

Why it matters: accepting the grants would secure large state capital support for safety and capacity improvements but would shift the question of how to cover the city’s share of project costs onto the City Council. Stotts warned that, while the staff does not propose a direct special assessment, “hangar rents on an annual basis will be evaluated based on the costs of operating that airport,” and lease rates could change to help make up the gap.

Public comment and commission concern: Doug Shipp, a hangar owner, told the commission he was concerned that hangar owners could be asked to provide additional funding if the city seeks creative ways to satisfy its obligation. He also raised an unrelated safety concern, telling the commission that "we shouldn't be applying salt anywhere on that airfield" because of corrosion risks to aluminum airframes.

Commissioners discussed other revenue sources that could help absorb the long-term cost, including fuel-sales revenue, property-tax allocations and developing undeveloped north-end lots. Staff said property taxes were included in budget calculations shown to commissioners earlier in the year but not in the operating financials packet shown at the meeting; Stotts estimated that the tax receipts were on the order of "25,000 or so" annually (amount presented in discussion as an estimate).

MnDOT cap exemption: because the combined awards would exceed MnDOT’s $1,000,000 per‑year grant cap, staff has submitted an exemption request to MnDOT’s aeronautics director. The commission voted to authorize submission of a request to exceed the $1,000,000 cap for state fiscal year 2026.

Next steps: the commission’s recommendations will go to the Forest Lake City Council for final action. The council will decide whether to accept the grants, approve any interfund loan terms, or adopt other measures to address the local match requirement.