Lake Elmo signs onto TH‑36 interchange project; city’s net exposure estimated at $2.4 million

Lake Elmo’s City Council voted to approve multiple cooperative agreements on May 5 so the county can proceed with the Trunk Highway 36/Lake Elmo Avenue interchange and South Frontage Road improvements.

Griffith (city staff) told the council that after April 14 bids the estimated total project cost is just under $43 million. Under the county’s cost‑participation policy, approximately $11 million of those costs are initially assigned to the city, but existing and anticipated grants totaling roughly $8 million reduce Lake Elmo’s net estimated share to about $2.4 million. Staff emphasized estimates are preliminary and subject to change with final bills and change orders.

The agreements approved include: (1) a county cooperative cost‑share agreement setting formulas for allocating costs; (2) a cooperative maintenance agreement specifying which agency will maintain which components (the city will own and maintain the South Frontage Road and associated local pavement, curb and portions of storm infrastructure); (3) a three‑party MnDOT cooperative construction agreement; and (4) a change‑of‑jurisdiction agreement transferring the South Frontage Road to city control after construction.

Council members raised concerns about change‑order authority and monitoring. One council member asked that the city administrator return to council for large overages; staff noted the county historically did not invoice the city monthly in past projects but that invoicing and monitoring have improved. The agreements include a clause that requires county concurrence and notification if estimated city costs exceed the budget by a material amount.

The council approved the item by voice vote. Staff said the county intends to award the construction contract on May 19 and begin work as early as June 1, with construction staged across 2026 and 2027. The county’s construction schedule aims to complete the South Frontage Road this year as part of a two‑season construction plan.

What this means for residents: the city will assume maintenance responsibility for certain elements (notably the frontage road and assigned stormwater infrastructure) at project completion; long‑term maintenance costs and MS4 stormwater obligations will increase accordingly. Staff negotiated to reassign some larger trunk storm sewer items back to state responsibility and removed a proposed indemnity that would have required the city to indemnify MnDOT.

Sources: staff presentation and council deliberation during May 5 meeting; cost estimates and project summary provided by Griffith.