Council authorizes advance of MnDOT state-aid funds to cover shortfall on 2026 street project

City engineering staff (Chris) told the New Prague City Council the 2026 street and utility improvement project will require more state-aid than the city currently has on hand and recommended advancing future MnDOT municipal state-aid to cover the gap.

Chris said the municipal state-aid balance is about $480,000 while the project estimate for the state's contribution is about $881,000; staff proposed an advance and included a $950,000 estimated disbursement in the resolution to provide flexibility if actual costs differ. "You just would not receive any funding towards your state aid construction fund next year," Chris said when asked whether advancing funds affects next year's allocation.

Staff explained that advancing funds can cover up to five years of funding or $4,000,000 under state statute, and that the city would still receive its maintenance allotment even if construction allocations are advanced. The council asked clarifying questions about whether the advance could be phased; staff said advances are typically used as a single disbursement.

After correcting a typographical error in the resolution language, the council approved resolution CC-26-02-17-02 to advance state-aid funds for the 2026 project; the motion passed 4-0. Staff said the city has also applied for a local road improvement program grant to cover local share and that grant outcomes will be known in April or May.

What happens next: if the city receives other grant funds it could reduce the advanced amount; otherwise the project will proceed this summer with advanced state-aid funds and the city's construction allocations will be reduced in subsequent years until the advance is accounted for.