Shorewood’s 10-year financial plan provides a detailed look at where City finances are headed. The numbers raise an important question for residents: “Are we planning to spend what we need—or simply planning to find the money to pay for what we want?”

The plan produced by consulting group Northland Securities, projects a dramatic increase in the financial burden placed on Shorewood residents. The goal should be to determine what Shorewood truly needs, what taxpayers can reasonably afford to maintain or improve quality of life, and how to provide those services at the lowest responsible cost.

This assessment was produced using ChatGPT to determine strengths and weaknesses in the plan compared to other municipalities.

Overall Scorecard

Property Taxes

The City’s property-tax levy is projected to increase from $7.6 million per year in 2025 to $16.4 million per year in 2035—an increase of 116%. The plan assumes operating expenses will generally increase 4–5% annually, with additional costs for personnel, capital projects and debt service. The critical question is whether those increases are inevitable. The plan does not sufficiently challenge whether staffing, operating costs and planned projects can be reduced, delayed or delivered more efficiently.

Tax-Capacity Rate Comparison

Over the last 10 years, Hennepin County’s suburban tax-capacity rate has actually declined 13%, or about 1.4% per year on a compounded basis over the preceding decade. Why is Shorewood – a city that is mostly built to capacity – projecting a 74% increase in its tax-capacity rate over the next decade?

• Hennepin County, 2016–2026: -1.4% average annual change
• Shorewood projected, 2025–2035: +5.7% average annual change

Hennepin County’s growing tax base allowed it to increase tax collections without increasing its tax-capacity rate at the same pace. Shorewood’s financial plan assumes its tax base will grow much more slowly than its spending requirements, leaving existing taxpayers to absorb much more of the increase.

Debt

The City is planning $21.8 million in new borrowing during the planning period. Borrowing for long-lived infrastructure can make sense. However, legal borrowing capacity should not be confused with what is financially prudent. Re-payment of bond principle and interest is projected to increase substantially, reaching $3.6 million annually around 2033. Every dollar committed to bond re-payment is a dollar that cannot be used for future priorities without additional taxes.

Utility Costs

Residents will also face significant increases in utility charges. The combined quarterly fixed charges for water, sewer, storm water and recycling are projected to rise from approximately $236 in 2025 to $476 by 2035—roughly doubling. The storm water increases are particularly aggressive, with projected increases of approximately 60% in 2026 and another 35% in 2027. Some increases are justified by aging infrastructure and rising operating costs. But the City should clearly separate the cost of providing today’s services from the cost of accumulating money for future projects.

Reserves and Cash

Shorewood should maintain healthy reserves (savings) in case of emergency. However, residents deserve a clear explanation of how much money the City actually needs to hold. The plan projects millions of dollars accumulating in various capital and enterprise funds for roads and utilities. Before increasing taxes or utility rates, Council should identify:

• Instead of borrowing, could the city use some existing cash?
• What amount is required for emergencies?
• What amount is committed to specific projects?
• What amount is simply being accumulated for future spending?

The Real Opportunity

The financial plan should be treated as a starting point, not a spending mandate. Council should develop alternatives that test:

• 3% rather than 4–5% annual operating growth;
• fewer or delayed capital projects;
• greater use of existing reserves;
• less borrowing;
• increased SCEC revenue;
• Improved operational efficiency.

Shorewood is not facing a financial crisis. That gives City Council members something valuable: time to make better choices. The goal should not be to find ways to raise enough money to fund every projected expense. That is the financial discipline residents should expect from their City Council.

Editor’s Note: This article was written with the assistance of artificial intelligence to evaluate critical information contained within Shorewood’s policy and procedural city documents.