Unintended Consequences: Subdividing Property & Municipal Water

During the April 28^th Shorewood meeting, the council discussed a proposed amendment to the subdivision ordinance, for over two hours, before tabling it for future consideration. The proposed change would require owners wanting to subdivide their property to connect to the municipal water system, at their own expense.

The proposed language amending Shorewood City Code Title 900, Public Right-of-Way & Property and Title 1200, Zoning & Subdivision Regulations is summarized as follows:

“…All subdivision applications received after the effective date of this ordinance shall be required to connect to the municipal water system, at the applicant’s expense, pursuant to the requirements of City Code 1202.47 Utilities. If municipal water is not available to a proposed subdivision, it may be deemed premature for development and the proposed subdivision shall be denied by the City Council”...

Two relevant questions can be asked:

1. Where did this proposal originate?
   
   
2. What is the ultimate purpose of the proposed amendment?

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¹ At the council “retreat,” in Feb. 2025, the members advocated for the development of the first ever comprehensive water policy.

At the planning commission’s public hearing, Michael Sharratt and George Greenfield (minutes, p. 10, line 27) appeared in opposition to the water amendment. During discussion, several planning commissioners were uncomfortable with the addition, sharing concern about the impact on property owners. The commission debated the draft extensively. After two failed motions, it recommended approval of the other subdivision amendments, excepting the water connection requirements (minutes, p. 14, line 43).

Matters from the floor at the April 28 council meeting, included comments and questions from Duane Laurila. He opposed the amendment and also asked several times who had made the decision not to assess for water pipe installation. He was not given a public answer, but was promised an email at a later date.

The Apr. 28 council public hearing and discussion followed a similar track as the planning commission. Duane Laurila and Mike Sharratt spoke. The staff promoted a sense of urgency based on the pending state legislation on the “missing middle.”² The council struggled for 2.5 hours to agree on the policy. Several council members were clear that approving the section without a complete water policy in place would be “putting the cart before the horse.” Council members DiGruttolo and Sanschagrin wanted to hear directly from residents about how the change would financially affect them, and what other unintended consequences may exist with the new regulation. The mayor argued that it was nearly impossible to get people to come to any meeting at city hall. The matter was ultimately tabled until a four-hour work session could be scheduled in the coming month.
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²The legislation stalled in the MN Senate on May 5, 2025 making the supposed urgency moot.

The purpose of the proposed amendment is unclear because of the vague origination and brief public discussion before it moved into the approval process. Two possible reasons for this amendment can be considered:

1. The city wants to discourage subdivisions of eligible properties. The costs of connecting to the municipal water system are prohibitively high for a majority of properties, the financial benefits of subdividing a property evaporates under this proposal. A single property that could be subdivided into two parcels, located along an existing water main, would have double the connection costs amounting to tens of thousands of dollars. Properties not located along existing water infrastructure would not be allowed to subdivide. In either case, the financial case for a subdivision is gone.
   
   
2. The city is looking for a method to force property owners to connect to the water system. Rather than first fix the financial problems of the existing business model, (i.e., charging current customers the actual costs of the product), forcing others to become customers could solve the fiscal issues that currently exist. Shorewood Enterprise Fund Analysis, (SCA, Feb. 2025)

From the Planning Commission Minutes , Apr. 1, 2025, p. 9, line 34 – “[Planning Director Griffiths] He noted that there was about half of the community that were currently served by City water and explained that the hope was that this policy would help spur some additional connections.” 

Finally, there is a two-month timeline to have a water policy in place before the Mill Street trail project which includes a decision on a possible water main for Shorewood.

A well-defined purpose tied to clearly articulated policies has not been made public. So far, four residents testified at the public hearings before the council and planning commission–all opposed. There has been no broader feedback from affected residents who could educate the council on further unintended consequences. There has not been supporting data for how many properties could be affected by this policy.

SCA will continue to monitor and report on action regarding municipal water.