Purpose of this article:
- To give residents a summation of the topics considered for the future of city water infrastructure and to balance out the water fund.
- Motions indicate the outcome of each conversation.
- Links to the video and backup documentation are provided to show the context for each of the 19 options discussed. (Note: due to technical changes on the LMCC website, readers will need to manually navigate to the time indicated by each video link)
Background: According to the Shorewood staff, “Shorewood’s Water Enterprise Fund is projected to run a negative balance by 2026, reaching an approximate $4.5M deficit by 2035 if current policies remain unchanged.” On June 9, 19 options that would work together to address the financial deficit were presented to the council. In a 3.5 hour session on this topic alone, the council discussed each option and voted on whether to have the staff proceed with further research and development of the concept.
Approximately 50% of Shorewood residents are connected to city water and 50% have private wells. About 531 households have access to city water but choose to remain on their private well. Shorewood has admittedly been making piecemeal infrastructure decisions for 20 years. The infrastructure is aging but there is no clear plan how to manage or replace or expand. Add to this, the Riviera, Glen/Amlee, Woodside, Strawberry and Birch Bluff projects where a water pipe was installed without assessment (i.e. a method to pay for it), resulting in a water fund deficit.
Link to full discussion video.
Link to summary documents presented to the council in their meeting packet.
Goal of this discussion:
- Define how to maximize the water system.
- Define the vision and what triggers expansion.
- Define the specifics through budgeting and policies.
- Provide initial guidance to staff to further develop the policies.
Options:
1. Improve Public Perception [of municipal water]. (video 1:19:01)
Read description of option (start p. 56)
Staff estimates that the cost of a public education campaign would be around $5000, not including city staff time. It is anticipated that the campaign would continue for 3-5 years utilizing the materials and methods created in year one. The ongoing campaign after year one is anticipated to cost $2000 per year.
MOTION to pursue Option 1 to improve public perception for 3-5 years: Passed 5-0
2. Organized connection program: (video 1:58:00)
Read description of option (p. 56).
City will create a well thought-out process led by the city to assist with the connection process with one single contractor to make it easier to connect to municipal water. The estimated start-up cost of the connection program is $5000. Following the initial start-up, the estimated ongoing city cost of the program is $1000-$3000 per resident. This cost would include all the design work, resident and contractor coordination, and construction inspection and would be included in installation costs.
MOTION to pursue Option 2 as amended to say “develop some options for implementing an organized connection program.” Passed 5-0.
3. Implement water availability fee: (video: 2:14:30)
Read description of option (p. 57).
The city could apply the base water fee (currently $32.51/quarter) as a water availability fee for all properties that have water available but have chosen not to connect.
MOTION to pursue implementation of water availability fee. Passed 5-0.
4. Infrastructure fee: (video: 2:21:00)
Read description of option (p. 57).
Properties without available city water would pay a designated fee to support hydrants and public facilities with water.
MOTION to pursue infrastructure fee: Passed 5-0.
5. Modify water rate structure and add another tier. (video: 2:46:30)
Read description of option (p. 57)
The current rate structure was adjusted in 2008 to modify the first tier from 10,000 to 5,000 to reward water conservation. This option proposes revising the existing rate structure to introduce an additional tier at 25,000 gallons of consumption to continue promoting water conservation.
Motion to approve Option 5 to modify the rate structure: Passed 5-0.
6. Allowing flexibility for resident assessment (video 2:53).
Read description of option (p. 58).
The City could revise or develop policies to more comprehensively mitigate the financial impact of connecting to municipal water. This concept allows residents to assess the complete water installation costs, not just the $10,000 connection charge, which would include the connection charge, the cost of the connection from the lateral to the house and any required plumbing modifications
MOTION to allow staff to combine with Option 2 in concept: Passed 5-0.
7. Require new subdivisions to connect if water is accessible. (video 2:58:03)
Read description of option (p. 58).
This option would essentially require that all new developments be connected to the municipal water system. A new development is defined as a lot split, where one property is divided into two properties, or a plat, where one property is divided into three or more properties. If infrastructure was not available, the developer would either need to pay the cost to extend the infrastructure to the site, work with the surrounding neighborhood to petition the city to install infrastructure or wait until infrastructure is extended.
Read SCA article of April 2025.
MOTION to require new subdivisions to connect: Passed 4-1, Sanschagrin opposed
8. Point of sale connection requirement if water is available (video 3:06:07).
Read description of option p. 59
The city could revise the municipal code to require that all new residents purchasing a home that has water available would be required to connect to municipal water.
Motion to pursue Option 8 to require connection upon the sale of a home: Passed 4-1, Sanschagrin opposed.
9. Require connection upon new home build or complete reconstruct. (video 3:06:51)
Read description of option p. 59
The city could revise the municipal code to require all property owners building a new home or completely rebuilding a home that has water available would be required to connect to municipal water.
MOTION to approve Option 9 to require connection for new home build or complete reconstruct. Passed 5-0.
10. Require connections to existing mains. (video 3:12:46)
Read description of Option (p. 60)
The City could revise the municipal code to require connecting to municipal water as water infrastructure becomes available. The Council must decide on consistent assessment policies along with mandatory hook-up–or not.
MOTION to approve connection to a water main project but for now only including the water access charge. Passed 4-1, Sanschagrin opposed.
11. Reduce water connection fee (video 3:37:32).
Read description of Option 11 (p. 60).
The $10,000 water connection fee was established following the Marsh Point development in 1996. Since that time the $10,000 water connection fee has not been changed; however, there have been significant increases in materials and labor costs that have added to the cost of installation and maintenance of municipal water infrastructure. The council will consider a formula and schedule for increasing the fee over the next number of years.
MOTION to have staff pursue different scenarios to come up with financial options. Passed 5-0.
12. Improve water treatment (video 3:59:46).
Read description of Option 12 (p. 60).
A frequent comment or complaint regarding the city’s water supply is quality, most notably the hardness and the higher amounts of iron. Over the past two years, staff have performed water testing and implemented short-term, lower-cost solutions to improve water quality.
MOTION to pursue Option 12, improved water treatment. Passed 5-0.
13. Connect upon large renovation (renovation to be defined) (video 4:08:37).
Read description of Option 13 (p. 61).
MOTION to not pursue Option 13 at this time. Passed 5-0.
14. Require connection to existing main (video 4:10:04)
Read description of Option 14 (p. 61)
The city could revise the municipal code to require connecting to existing municipal water where it is available. Currently, 531 households have municipal water available and are not connected.
MOTION to not pursue Option 14 requiring connection to existing water main. Passed 5-0
15. Amend service line ownership (video 4:36:42).
Read description of Option 15 (p.61)
Currently, the city’s municipal code defines ownership of water utility services from the water main to the property line/curb stop. Property owners are responsible for the service from the curb stop valve into their residence or building. Water services are more often maintained by the city from the water main to the curb stop or valve. This arrangement increases risk and costs to the City and the water fund. Staff proposes making property owners additionally responsible for ownership of the line from the curb stop to the water main in the street.
MOTION not to pursue Option 15. Passed 5-0.
16. Implement an assessment policy to partially fund infrastructure
Improvements. (video 4:40:16)
Read description of Option 16. (p. 62)
MOTION not to pursue Option 16 utility assessments. Passed 5-0.
17. Delay capital improvement projects. (video 4:42:16)
Read description of Option 17 (p. 63)
City-initiated water main construction projects (2028-2031) could be delayed on the schedule.
MOTION to revisit Option 17 at a later day. Passed 5-0.
18. Allocate staff time [spent on water infrastructure] to the General Fund.
(video 4:52:30) Read the description of Option 18 (p. 63)
Indirect costs in the water utility includes paying for the time and resources spent on the fund by Finance, Administrative, and Communication staff be charged to the General Fund, rather than the water fund.
MOTION not to pursue Option 18. Passed 5-0.
19. Property tax levy to support the water fund. (video 4:54:20)
Read description of Option 19 (p. 64).
The current trajectory shortfall of $4,496,756 by 2035 being supplemented by the property tax levy would be applied to each parcel within the City based market value and classification rate. This would equate to approximately 5.92% levy increase.
MOTION to not pursue Option 19, annual levy. Passed 5-0.
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More reading:
Drilling Down on Municipal Water
Unintended Consequences
Get Smarter: About Enterprise Funds
Let city leaders know what you think.
- Best option: attend and /or speak up at City Council meetings and get it on the public record.
- Contact City Council Members
Dustin Maddy (612) 293-6727 dmaddy@shorewoodmn.gov
Jennifer Labadie (952) 836-8719 jlabadie@shorewoodmn.gov
Michelle DiGruttolo (517) 422-9528 mdigruttolo@shorewoodmn.gov
Guy Sanschagrin (952) 217-1289 gsanschagrin@shorewoodmn.gov
Nat Gorham (617) 780-7771 ngorham@shorewoodmn.gov
