Resolution removing the Southeast Water Quality State Bonding Request.

Adoption of the attached resolution.

The Southeast Water Quality Project was originally proposed to improve drainage in the southeast portion of the City, including a large agricultural area outside city limits that drains to Rosewood Pond. The City was awarded State funds for the property acquisition and final design. At the time, important property owners were not willing to discuss acquisition and the City ceased development of the project and released the awarded State funding. The project has continued to receive significant community interest and the City has explored several funding opportunities to help move needed improvements forward and was added to the City’s list of projects to submit to the State for bonding funding in 2026.

In recent months, the City engaged a real estate professional to re-initiate negotiations with the owners of the needed properties. Despite strong efforts, the property owners remain unwilling to sell the required properties to the City for this purpose. In December 2025, the City applied for a grant from the MPCA to reevaluate the Southeast Water Quality Project and explore alternative improvements and approaches to achieve the same drainage results. We expect the MPCA to award successful applicants in early spring. If awarded, this study would be completed by the end of 2026.

In the meantime, the city is commissioning a review of Rosewood Pond this winter to identify potential improvements to address flooding concerns on Rosewood Pond in the shorter term. Considering the ongoing uncertainty regarding the practical feasibility of the Southeast Water Quality Project as it is currently proposed, Staff is recommending that it be removed from this year’s request to the State for bonding.