Olmsted County approves $500 million five-year improvement plan (2025)

Jan. 7—ROCHESTER — A five-year, $500 million Olmsted County capital improvement plan was approved Tuesday with up to $60 million of the first year's cost to be covered through new debt.

"A lot of these things are done over a period of time," county commissioner Gregg Wright said of the planned projects that extend through 2029.

The improvement plan details costs associated with anticipated major, one-time physical expenditures, such as acquiring land, building construction and upgrades, public infrastructure and equipment purchases costing more than $10,000.

Olmsted County Controller Camy Iverson said nearly $130.6 million of the proposed $500 million was included in the county's $428.7 million 2025 budget, and the remaining planned expenses are tied to future or ongoing projects.

"The 2026 to 2029 projects are really estimates," she told county commissioners. "You haven't approved those projects. You've just said 'Yes, that's something we are considering.'"

County Administrator Travis Gransee said the ultimate five-year cost hasn't been set in stone, especially for projects and purchases that haven't started.

"There is some flexibility in there, and the plan will get updated," he said. "What's in there for 2028 might change by the time we get to 2026."

Tuesday's approval of issuing bonds to borrow up to $60 million covers nearly half of this year's project expenses, but Iverson said that isn't expected to be the case each year.

The long-term capital improvement plan points to new debt covering a third of all related spending through 2029.

With the new borrowing, Iverson said county staff continues to monitor the county's debt and required payments, which are expected to increase in 2026 and 2027 before dropping in following years.

She said monitoring the debt is part of the annual update of the capital improvement plan, which typically begins in June and continues through the rest of the year with periodic updates for commissioners to provide input.

The five-year plan is not required, but Iverson said establishing the long-term document and updating it annually is seen as a way to define a path of focus for future spending tied to the upkeep of existing buildings and infrastructure, as well as new projects to meet community needs.

Most of the biggest expenses tied to the plan are related to projects that have been years in the making, including the new interchange planned for the intersection of U.S. Highway 14 and County Road 44, as well as the planned Graham Park exhibition center.

With an estimated $85.5 million price tag, $19 million is expected to be spent this year on the Highway 14 interchange project between Rochester and Byron. Around $11 million has already been spent through the planning and initial design process.

With the remaining spending expected in 2026 and 2027, the project is largely funded through state and federal funds, with the county currently slated to provide $10.7 million in sales tax reserves next year.

Iverson said the planned funding sources for projects in the capital improvement plan are fluid from year to year, since new grants and revenue sources could be found prior to next year's budget.

Additionally, she pointed out project costs could also change, since the five-year plan is created using the best estimates available at the time, with the possibility of changes to building and material costs in the future.

The planned $35.5 million Graham Park exhibition center, with $14 million expected to be spent this year, is one of the projects that have seen anticipated costs change since design work started.

With nearly $4.5 million spent so far, commissioners received a project update Tuesday, with Mat Miller, the county's director of facilities and building operations, reporting the latest estimates to add at least $4.1 million to project costs.

He highlighted a variety of adjustments that could be considered to scale back the expenses and said a firmer understanding of the costs will be available as design work continues through February.

The county's capital improvement plan calls for using $6 million in state funding this year, along with $8 million from the approved county bonds. It leaves $17 million in spending planned for 2026, with $2 million from state funds and the remainder provided through future county borrowing.

So far, the county is slated to issue bonds later this year to borrow up to $71 million — $11 million approved last year for projects that haven't yet started and the $60 million approved Monday for work and investments in this year's plan.