Forest Lake commission recommends MnDOT grants for runway, taxiway and apron expansion amid funding gaps

The Forest Lake Airport Commission on Dec. 3 recommended that the City Council accept three MnDOT capital grant offers to expand the apron, extend the taxiway and lengthen the runway, while flagging a shortfall in local funding that could affect hangar owners.

Administrator Stotts told commissioners the projects received grant awards but MnDOT lowered its participation from 95% to 90% after Forest Lake submitted applications, leaving a larger local match than expected. He said the airport fund does not currently contain sufficient capital to pay the citys share and outlined options including cost cutting, increased ground-lease rates or an interfund loan from the citys general fund. “We do not have that money in the airport fund at this point in time,” Stotts said.

Why it matters: The three projects are intended to improve airport safety and operational capacity; accepting the grants obligates the city to cover the non‑reimbursable portion of the work. Commissioners and members of the public said the local cost could be borne in multiple ways and requested clearer accounting of property-tax revenues, fuel-sales gains and potential ground-lease revenue before council action.

Discussion and key details: During public comment, hangar owner Doug Shipp warned that advancing the projects without a clear funding plan could lead the city to pursue additional assessments against hangar owners. Shipp also raised operational-safety concerns after he saw salt applied to the apron near Hangar 28 and said, “We shouldn't be applying salt anywhere on that airfield.” Stotts confirmed state grants typically reimburse 75% of eligible operations-and-maintenance costs up to fixed caps for certain programs and noted the capital grants were awarded through MnDOTs competitive rounds.

Stotts summarized a staff proposal that the city general fund provide an interest-free interfund loan repayable by the airport fund over a multi-decade schedule (he suggested 20 years as an example). He also said that when the airport budget is fully accounted — including property taxes historically associated with hangar parcels — the airports financial picture looks different, but the adopted budget for the current year remained unbalanced. Commissioners discussed the legal risk of altering existing ground-lease arrangements and flagged the possibility of legal challenges if the council were to impose retroactive assessments or atypical increases tied to these projects.

Vote and next steps: After discussion, a motion to recommend that City Council accept all three MnDOT grant offers passed unanimously. Staff also reported it has submitted an exemption request to MnDOT to exceed the states $1,000,000 annual aeronautics-cap for major projects; the commission separately voted to authorize submission of that request. The commission recommended staff and legal counsel refine the accounting and present options to the council so the council can decide whether to fund the local match or proceed with alternatives such as an interfund loan.

The council will receive the commissions recommendation; staff advised more detailed financial analysis and legal review prior to any council decision.