Shorewood officials weigh new non-user water fees and fee study as residents push back

Finance Director Schmuck told the Shorewood City Council during a budget work session on Aug. 25 that the city’s enterprise funds — including water, sanitary sewer, stormwater and recycling — should be self-sustaining and that the proposed 2026 budget would draw about $30,000 from the Shorewood Community and Event Center (SCEC) reserve.

The discussion focused quickly on water hook-up and availability charges after Councilmember Sanschagrin questioned whether the city should raise development fees. "The sewer hook-up access charge does cover the costs, but the water hook-up charge does not," Finance Director Schmuck said, noting the city will undertake a six- to nine-month study of development fees to bring charges into alignment with expenses.

Schmuck told the council the Metropolitan Council’s wastewater charges are calculated from seven-county flow data with about a three-year lag; it has proposed a 6.53% metro-wide increase for 2026, and Shorewood’s projected impact was 11.71% because of local flow activity. Public Works Director Morreim added that an apartment building about to be added locally will change flow calculations.

Council and staff discussed how the city has historically applied large one-time assessments for water hookups unevenly. Mayor Labadie said, "the City had not changed the water access charge hook-up fee for the last ten years," and urged residents to weigh long-term effects as the council seeks to right prior fiscal decisions. Schmuck said assessment practice varied since the 1990s and that charging the $10,000 assessment has been at council discretion.

Several residents spoke during the public-comment period. Marlys Bucher of 6590 Manitou Lane challenged charging a non-user availability fee for parcels where residents do not plan to connect to City water. She asked whether the proposed fee would be charged quarterly or yearly; Schmuck said the proposed fee would be billed quarterly and that availability fees reflect distribution-system benefits such as hydrants and park connections. Bucher said she had paid a prior $10,000 assessment and said it felt unfair to be charged an additional amount now for water she does not use.

Dale Newberg asked why sewer connections were listed at about $1,200 while water hook-ups were $10,000 and said the city’s historical records made it hard to track who had paid assessments. Joe Schneider argued the city should recognize that water is not "free," urging rates that reflect the cost of pumping and operations. Glen Bucher urged fiscal discipline and suggested delaying or scaling back projects if revenues and expenses do not balance.

Schmuck said staff recommends a phased approach to implementing an availability fee: bring the quarterly fee to roughly 400 parcels that are not currently connected in 2026, then expand to other parcels in 2027 after further analysis. She also emphasized staff cannot simply set rates by copying peer cities; the Long-Term Financial Management Plan and local flow data will guide modeling.

Councilmembers acknowledged the political sensitivity of changing long-standing fees and the need for more analysis and public engagement. City Administrator Nevinski advised against rushing significant changes for the 2026 budget year because of unanswered questions; Councilmember Sanschagrin and Mayor Labadie agreed to postpone an in-depth engineering-services discussion until the full council can be present, likely on Sept. 8, and cautioned that could delay final budget and levy adoption.

No formal change to the 2026 proposed budget was adopted at the work session. The council approved the meeting agenda at the start of the session and later moved to adjourn; both procedural motions passed 3–0. The council encouraged residents with detailed questions to use newly scheduled office hours with staff to review budget items.

The council is expected to continue budget deliberations at future meetings; staff will complete the development-fee study and return with modeling and recommendations before any finalized fee changes.