## CITY OF SHOREWOOD ## CITY COUNCIL WORK SESSION ## AUGUST 10, 2026 ## 5755 COUNTRY CLUB ROAD ## CITY HALL COUNCIL CHAMBERS ## 5:30 PM ## AGENDA ## 1. CONVENE CITY COUNCIL WORK SESSION ## A. ## Roll Call ## Mayor Labadie _____ ## Councilmember Maddy _____ ## Councilmember Sanschagrin _____ ## Councilmember Gorham _____ ## Councilmember DiGruttolo _____ ## B. Review Agenda ## 2. DISCUSSION ## A. Budget Work Session #4: 2027-2036 Detail Capital ## Improvement Plan ## B. Reserve Policy Overview ## 3. ADJOURN Page 1 of 79 City Council Work Session Item 2.A. ## Title/Subject: Budget Work Session #4: 2027-2036 Detail Capital ## Improvement Plan ## Meeting Date: August 10, 2026 ## Prepared By: Jeanne Schmuck, Finance Director ## Attachments ## 1. 2027 Budget Preparation Calandar Revised ## 2. 201 Shorewood Community & Event Center 3. 402 Park Infrastructure 4. 403 Equipment Replacement 5. 404 Street Reconstruction ## 6. 2028 Manor Road Project ## 7. 2029 Galpin Lake Road & Chaska Road Trails ## 8. 2029 Vine Hill Road Improvements ## 9. 405 MSA Street Reconstruction 10. 450 Community Infrastructure ## 11. 2027-2032 Public Works Facility Improvements 12. 601 Water 13. 611 Sanitary Sewer 14. 631 Stormwater ## 15. 2027 Noble Road & Grant Lorenz Channel Improvements 16. 2027 - 2036 Capital Improvement Plan ## 17. New Online Feedback 2027 City Budget ## Background The 2027-2036 Capital Improvement Plan (CIP) provides important details on costs by year and proposed funding sources. Items in the CIP are not mandated, and the Council reviews capital spending throughout the year. It is a visioning tool to assist with data-driven decisions. Years one through three are becoming solid approximations. Years four and five are relatively good estimates, and years six through ten are rough estimates of projects to keep long-term visioning in perspective. The 10-year CIP includes $47,320,023 in projects, of which $4,498,375 is reflected in the various 2027 budgets. At the July 27 th Budget Work Session, Council requested a line-by-line review of the CIP. Due to this request, the 2027 Budget Calendar has been revised and is attached. Also attached are the individual department sections of the CIP with the funding sources referenced at the bottom of each section. Those funding expenditures are what is incorporated into the individual fund budgets for that specific year. Staff will be prepared to discuss any specifics the Council would like answered as they walk through these items line by line. ## CIP Funding Sources Page 2 of 79 An important facet of the CIP is the funding of projects. Funding can come from a number and combination of sources and not necessarily impact the levy. These include: • Property Taxes (the levy) — The City has historically allocated some portion of its levy to its Capital Funds (Parks, Equipment, Streets, SCEC). Page 18 of the CIP book shows an allocation of taxes to the Park fund in 2024 of $128,000 and in 2025 of $135,000. In 2026, the Council decided to move additional levy amounts from the Street Fund to the Park Fund, with the rationale that more funding sources exist for street funding (taxes, assessments, MSA, bonding) than for park improvements. • Bonding — CIP projects can utilize bond proceeds for funding. Bonds are then repaid through an annual debt service levy and/or property assessments. The alternative to bonding would be to levy and save up for projects, but this means that large projects take a long time to save for, and it becomes difficult to keep up with a city's maintenance needs. Ideally, a city bonds on a regular schedule where new debt comes on as old debt is retired, allowing for a stable debt service levy, which was the City of Shorewood's practice for many years. • Certificates — Similar to bonding, certificates are another tool that can be used to fund equipment purchases. • Inter-fund Loans or Transfers — Dollars from one fund can be used for projects in another fund. This can be structured as a loan between funds or a one-time transfer. • Leases — it is possible to lease certain equipment rather than buy it outright. The effect on the budget can be similar to debt service. • Municipal State Aid — MSA dollars come from the State gas tax and can be used to fund work on designated roads or adjacent road-related projects. • Grants — Projects may be funded from grants. Examples of recent projects receiving grant funding include the Shorewood Lane Ravine and Galpin Lake Trail. • Assessments — Assessments are specific charges applied to properties that benefit from improvements. Assessments may or may not cover the entirety of a project or improvement, and must be proportional to the benefit the property receives. • Enterprise Funds — Projects can be funded through enterprise fund revenue, such as water, sanitary sewer, and storm sewer charges. The funds can pay directly for projects or be used to pay debt service for work related to those funds. • Franchise Fees — These are fees charged to major utilities (electric, gas) for their use of the public right of way. The companies pass these charges onto consumers. ## Funding Capital Funds The City has historically funded several of its Capital Funds with some portion of the tax levy. These funds include the SCEC (201) (labeled a Special Revenue Fund), the Street Improvement Fund (404), the Park Improvement Fund (402), the Community Infrastructure fund (450), and the Equipment Replacement Fund (403). (Enterprise funds, such as water, sanitary sewer and stormwater management, are typically funded by utility fees, although levy dollars could be transferred to support enterprise funds.) In 2026, the City began itemizing these levy amounts in its budget documents to increase budget transparency. Allocating specific amounts from the levy to these capital funds allows the City to build up funding to pay for planned expenditures identified in the CIP. While the City could simply levy the amounts needed each year, the levy would vary dramatically year over year. The current approach helps avoid spikes in the levy when a large expenditure is needed. It is important to note that with this planned approach, eliminating delaying an expenditure in the CIP does not Page 3 of 79 change the amount planned to be levied for the fund. Those are two distinct choices. As an example, for 2027, the Equipment Fund (403) shows planned expenditures of $367,600. The proposed amount to be levied for the fund in 2027 is only $275,000. ## Capital Funds and Projects ## 201 - SCEC Summary: For 2027, the SCEC CIP includes investment in an HVAC unit of $7,872, which reflects ongoing maintenance needs. Additionally, the remodel of the kitchen for $24,149 is planned and would shift from a commercial kitchen to a more simple and less costly caterer's kitchen. The CIP is based on a facilities condition analysis completed in 2025. An operational study of the SCEC is currently underway to maximize the use and revenue of the building. Implications: Scheduled replacement of HVAC equipment keeps the building operational and reduces costly, reactive, emergency repairs. Remodeling the kitchen provides a more modern approach to hosting events and reduces the capital costs of replacing and maintaining costly commercial kitchen equipment. Funding: Funding for these capital improvements is proposed to come from the levy and other revenue such as charges for services, ($177,677 & $82,000) which will fund both CIP and operational expenses. 402 - Parks Summary: For 2027, the singular park improvement planned is for the replacement of the Freeman Park North Playground in the amount of $350,000. For the 2026 budget, the City shifted the Street Fund portion of the levy to the Park Fund. This levy amount is projected to increase by $50,000 annually to fund planned improvements identified in the Park Master Plan. The current Long-Term Financial Management plan shows this increase leveling off and stabilizing in 2029 and beyond. Implications: Replacing aging playground equipment improves safety and provides contemporary amenities for users. The Park Master Plan identifies a path to plan for and manage the costs of providing the resources and amenities residents have identified. Funding: Funding for this improvement is expected to come from the levy in an amount of $355,000. ## 403 - Equipment Replacement Fund Summary: For 2027, this fund includes the purchase of a light trailer, replacement of a mower, and replacement of computers and presentation equipment in the Chambers. It also includes replacement of a dump truck for $280,000. Total expenditures for this fund in 2027 are $367,600. Implications: The replacement of these pieces of equipment allows the City to provide a consistent level of service. Not replacing this equipment risks increased maintenance costs and reduced or unreliable service. Funding: Funding for this improvement is expected to come from the levy in an amount of $275,000. ## 404 - Street Reconstruction Fund Page 4 of 79 Summary: For 2027, this fund includes expenses for annual pavement maintenance ($320,000) and the semi-annual mill & overlay project ($1,942,119). The total expenditure for this fund is $2,262,119. The City has been using an AI tool to video and analyze road conditions to make data-driven decisions regarding its maintenance projects and investments. The City also has a pavement management plan which is updated periodically to identify and plan for future work. Implications: Street maintenance is a core service for cities and includes both replacement and various maintenance activities to extend the life of the road. A planned approach creates priorities, manages costs, and enables better communication and engagement with residents. Funding: For the 2026 budget, the Council made the decision to fund street improvement and maintenance work through bonding as it is difficult to fund this work in a useful amount with levy dollars. Levy amounts previously directed to Streets were redirected to Parks. ## MSA No projects planned for 2027 are eligible for MSA funding. ## 450 - Community Infrastructure Fund Summary: This fund was previously established by the City to help fund improvements to public facilities, but not utilized or funded in the recent past. In 2026, the City allocated $50,000 to this fund for improvements to buildings. The proposed CIP includes $200,000 for air exchange improvements to the Public Works building and $30,000 to fund early stage design work in 2027 for remodeling and expansion of the Public Works facility in order to more accurately plan for and fund this improvement. Implications: The size of the Public Works department has increased significantly in personnel and equipment since the building was constructed. Staff has worked to utilize space more efficiently, surplus limited-use and oversized equipment (e.g. the road grader), and utilize temporary cold storage. Space for offices, break and locker rooms, mechanical bay and heated storage are cramped. Mechanical equipment is at the end of life and the garage floor is deteriorating. Steps should be taken now to plan for future improvements. Funding: The Long-Term Financial Management Plan included $50,000 per year to be allocated to this fund from the levy, eventually increasing to $100,000. The Public Works Facility needs were not included in the initial Long-Term Financial Management Plan. Options for the CIP could include funding design work in 2026 and delaying improvements identified for 2028 and 2029 to be included in a larger building project to be funded with bonds. Air exchange work should occur in 2027, but the allocation for this could be reduced 10-20%, and subsequently reduce reliance on the levy. 601 - Water Fund Summary: The Water Fund is an enterprise fund that relies on user fees, not levy dollars. Approximately half of the properties in Shorewood are served with municipal water. The total CIP for 2027 is $427,881. Implications: The expenses in this fund are largely maintenance projects that should occur to maintain the system to avoid emergency repairs and service interruptions. A water & sanitary sewer infrastructure report is required by the State to be completed in 2027. The water service connection program ($200,000) is a Council-directed program intended to promote connection to the water system by streamlining the connection process and providing financing. Page 5 of 79 Expenditures under this program are returned to the water fund via water access charges either paid or through assessments. Reducing the amount allocated for the water connection program does not impact the levy, but does have implications on future water rates. Funding: The Water Fund is an enterprise fund that relies on user fees, not levy dollars. ## 611 - Sanitary Sewer Fund Summary: The Sanitary Sewer Fund is an enterprise fund that relies on user fees, not levy dollars. All properties have sanitary sewer service. The total CIP for 2027 is $241,500. Implications: The 2027 expenses in this fund are for work associated with the mill and overlay project, system maintenance, and I&I reduction. A water & sanitary sewer infrastructure report is required by the State to be completed in 2027. Funding: The Sanitary Sewer Fund is an enterprise fund that relies on user fees, not levy dollars. ## 631 - Stormwater Management Fund Summary: The Stormwater Management Fund is an enterprise fund that relies on user fees, not levy dollars. All properties pay a fee for stormwater management. The total CIP for 2027 is $587,254. Implications: The 2027 expenses in this fund are for work associated with the mill and overlay project, street sweeping collections disposal, maintenance and repair work, stormwater pond cleaning, and the channel widening project at Noble Road and Grant Lorenz. Funding: The Sanitary Sewer Fund is an enterprise fund that relies on user fees, not levy dollars. ## Strategic Alignment ## Fiscal Responsibility • Align City policies and practices with strategic direction • Implement best practices to support sound financial management • Maintain stable and predictable finances over the long-term ## Functionally & Financially Sound Infrastructure • Define standards and goals for infrastructure development • Plans to finance infrastructure improvements, maintenance, and replacement ## Discussion Requested The impact of the above discussion and the previous work sessions will be included in the compiled budgets to be reviewed on August 24 th for an all-inclusive look at the individual budgets to date, as well as review various budget reduction options for further Council discussion. Council should also discuss if there are further items to be adjusted prior to the September 14 th council meeting or if the Council has other initiatives for 2027 that involve additional spending or savings. Page 6 of 79 After the Preliminary Levy is set, the amount can only remain the same or be decreased, it cannot be increased. The final budget work session is scheduled for the final review of all funds, levies, and tax impacts to be discussed at the November 23 rd work session. Following will be the December 14 th City Council meeting, which will include a budget discussion, a truth-in- taxation public meeting, and Council approval of the final 2027 Budgets, Tax Levies, and 2027- ## 2036 CIP. Page 7 of 79 ## Date ## Event Monday, April 27, 2026 City Council Budget Work Session #1: Goal Setting Session - Schedule, Process, Council provide direction on initiatives and expectations for the 2027 budget. (City Administrator) Monday, May 4, 2026 Departments' Budget roll out. Departments receive electronic access to the 2027 Budget Entry Instructions and Budget Calendar. Review use of Extended Budget module in Springbrook software. Administrator provides budget instructions and outlines City goals and challenges. Friday, May 29, 2026 Personnel Requests due to Finance Department with City Administrator approval. Friday, June 12, 2026 Fee Schedule revisions due to Finance Department. Monday, June 22, 2026 Budget Requests due to Finance Department via Extended Budgeting. Capital Improvement Plan (CIP) Requests due to Finance Department (2027-2036). Monday, June 22, 2026 City Council Budget Work Session #2: Personnel. Friday, June 26, 2026 Updated Budget Book Information (Dept. Descriptions, Budget Goals & Objectives, Dept. Statistics, Staffing Levels, Changes/Challenges, and Budget Summary) due to Finance Department. Monday, July 6, 2026 Directors Meet with City Administrator and Finance Director to review budget goals, issues, personnel, and CIP requests. Monday, July 6, 2026 Obtain preliminary property valuations/net tax capacity from Hennepin County. Monday, July 27, 2026 City Council Budget Work Session #3: 2027-2036 Capital Improvement Plan. Friday, July 31, 2026 Last day for Department of Revenue to notify City of Local Government Aid amounts. Friday, July 31, 2026 Finalize 2027 budget entries into Extended Budgeting in Springbrook. Monday, August 10, 2026 City Council Budget Work Session #4: 2027-2036 Detailed Capital Improvement Plan. Monday, August 24, 2026 City Council Budget Work Session #5: Compiled Budgets. Friday, September 4, 2026 Obtain preliminary property valuations/net tax capacity from Hennepin County. Monday, September 14, 2026 City Council Meeting - 7:00 p.m. City Council approves preliminary 2027 Budget, sets proposed 2027 Tax Levy, and establishes Budget Hearing Date. Adopt 2027 fee ordinances and fee schedule. Wednesday, September 30, 2026 Last day to certify proposed 2027 levy and budget hearing date to the County Auditor. Special for to State, if necessasry. Tuesday, October 13, 2026 City Council Budget Work Session #6: Long-Term Financial Management Plan. Monday, October 26, 2026 City Council Meeting - 7:00 p.m. City Council Adopt 2027 fee ordinances and Approve fee schedule. Monday, November 23, 2026 City Council Budget Work Session #7: Final Review - If necessary Monday, December 14, 2026 City Council Meeting - 7:00 p.m. Budget Hearing - City Council approves final 2027 Budget, Tax Levies, and CIP. Monday, December 28, 2026 Cities must certify the final property tax levy to the county auditor on or before December 28, 2026 (5 working days after December 20). ## City of Shorewood ## 2027 Budget Preparation Calendar (Subject to Change) Page 8 of 79 2027 through 2036 ## Capital Improvement Plan ## Shorewood, Mn Department Project # 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 Total 201 - Community & Event Center ## Kitchen Remodel SCEC-27-02 24,149 24,149 Condensing Unit Replacement SCEC-27-01 7,872 8,163 8,455 24,490 ## Tables & Chairs Replacement SCEC-28-01 114,100 114,100 ## Water Softener Replacement SCEC-29-02 9,425 9,425 ## Fire System Updates (Panel replacements & compressor) ## SCEC-30-01 66,000 66,000 ## Building Tuckpointing SCEC-31-01 31,000 31,000 ## Exterior Door Replacement SCEC-32-01 61,200 61,200 Furnace Replacement (x5) SCEC-33-01 72,188 72,188 ## Hallway & Lobby Renovation SCEC-36-01 36,260 36,260 Restroom Renovation (Men's & ## Women's) ## SCEC-36-02 33,852 33,852 ## Activity Room Remodel SCEC-35-01 201,656 201,656 ## Conference Room Renovation SCEC-36-06 133,224 133,224 ## Banquet Room Renovation SCEC-36-03 113,533 113,533 ## Banquet Room Room Divider ## Replacement ## SCEC-36-05 70,000 70,000 ## Banquet Room Sound System SCEC-36-04 43,750 43,750 ## 201 - Community & Event Center Total 32,021 122,263 17,880 66,000 31,000 61,200 72,188 70,112 201,656 360,507 1,034,827 201 - Community & Event Center 32,021 122,263 17,880 66,000 31,000 61,200 72,188 70,112 201,656 360,507 1,034,827 ## Source Grand Total 32,021 122,263 17,880 66,000 31,000 61,200 72,188 70,112 201,656 360,507 1,034,827 ## GRAND TOTAL 32,021 122,263 17,880 66,000 31,000 61,200 72,188 70,112 201,656 360,507 1,034,827 ## Produced Using Plan-It CIP Software Page 9 of 79 Page 10 of 79 Page 11 of 79 Page 12 of 79 Page 13 of 79 Page 14 of 79 Version 2: 7/27/2026   • Greenwood has initiated planning for improvements to Manor Road from Excelsior Boulevard to St. Albans Bay Road and has proposed pavement reclamation • Shorewood is reviewing potential drainage improvements on its side of the roadway, and range from improving the existing bituminous flume or adding curb and gutter and storm sewer.   • City of Greenwood • City of Shorewood  • Greenwood = $150,000• Shorewood = $500,000 ($350,000 Storm Sewer, $150,000 Roadway)         2025 2026 2027 2028 ## ScopingDesignŽŶƐƚƌƵĐƟŽŶ     • Manor Road only serves one Shorewood resident’s driveway. • There have not been drainage related complaints in the area, but staff see the project as an opportunity to improve drainage so that it requires less maintenance. Currently, the bituminous swale fills with leaves and sediment where water sheet flows ov er the roadway. A new storm sew er outlet to the lake/wetland could potentially be added through a parcel of land owned by Greenwood. • According to the 2025 Pavement Management Plan, Manor Road has a Pavement Condition Score of 91%, requires high maintenance, and has high road use. Greenwood is planning to complete soil borings in the fall of 2025 which will provide better insight on reclamation versus mill and overlay.     !" ## B a r r i n g t o n ## W a y ## O a k ## L a n e ## S t ## A l b a n s ## G r e e n ## B a r r i n g t o n ## W a y ## O a k ## L a n e ## S t ## A l b a n s ## G r e e n ## Manor ParkManor Park ## Saint Albans Bay ## Saint Albans Bay ## M a n o r ## R o a d ## S t ## A lb a n s ## B a y ## R o a d ## M a n or ## R o a d ## E x c e l si o r ## Boul e vard ## S t ## A l b a n s ## B a y ## R o a d ## Ch an n el ## Dr i v e ## S uburba n ## Dri v e ## M a n o r ## R o a d ## S t ## A lb a n s ## B a y ## R o a d ## M a n or ## R o a d ## E x c e l si o r ## Boul e vard ## S t ## A l b a n s ## B a y ## R o a d ## Ch an n el ## Dr i v e ## S uburba n ## Dri v e 7 ## Greenwood ## Shorewood ## Greenwood ## Shorewood ## Lake ## Black ## Bay ## Park ## Bay ## Carman ## Minnetonka ## Lake ## Vi i i ## Lake ## Bay ## Carson ## Bay ## Albans ## St ## Lake ## Silver ## Minnetonka ## Lake ## Lake ## Christmas ## Deephaven ## Excelsior To n k a B a y ## Greenwood ## Shorewood ## Excelsior ## Greenwood ## Deephaven ## Tonka Bay ## Chanhassen ## Minnetonka ## Excelsior ## Greenwood ## Deephaven ## Tonka Bay ## Chanhassen ## Minnetonka ## SHOREWOODSHOREWOOD ## AAAAAA ll bb ## Legend ## City of Chanhassen and City of Greenwood ## City of Shorewood Proposed Curb and Gutter with Minimal Storm SewerProject Location Proposed Storm Sewer Outlet ## Wetlands  ## GreenwShorew  Page 15 of 79 Version 2: 7/27/2026   • Construct new eight-foot-wide trails from Chaska Road to the existing signal system at Oak Street, County Road 19, and State Highway 7. • Provide a continuous pedestrian and bicycle route connecting Chanhassen to Excelsior.• The ongoing TH 7 Corridor Study may be a significant factor in determining the project scope.   • Shorewood-Municipal State Aid Funds• MnDOT• Local Funds• Potential Grants (DNR, MnDOT, Safe Routes to School)  • TH 7 to Chanhassen: $940,000–$1,330,000• Chaska Road to Galpin Lake Road: $810,000• Other Improvements/Changes Due to TH 7 Corridor Study: Unknown         2026 2027 2028 2029 ## Project ScopingFinal DesignŽŶƐƚƌƵĐƟŽŶ     • In 2024, the City of Chanhassen completed a trail connection on the east side of Galpin Lake Road extending to the municipal boundary. • MnDOT is currently conducting a TH 7 Corridor Study to evaluate safety and operational improvements along the entire corridor, from I-494 east to St. Bonifacius west. • Segments of trails could be completed as separate projects or coordinated with MnDOT’s 2029 Pavement Preservation Project. • A potential solution invol ## ves converting Galpin Lake Road from TH 7 to Mayf lower R oad into a one- way northbound route. Two-way traffic would be rerouted onto Ma yflower R ## oad and Chaska Road. An eight-foot-wide trail or boardwalk could be extended from Chanhassen to Ma yflower R oad, and then the existing southbound lane would be converted to a northbound lane and the current northbound lane converted up to TH 7 for pedestrian and bicycle use. • Conversion of Galpin Lake Road to a single northbound lane would require a variance from Municipal State Aid Rules and may not be approved. If not appr oved, the MSA route may need to be changed to Mayflower Road and Chaska Road. • Staff is evaluating various delineators to safely separate pedestrians from vehicles and still provide adequate access to driveways. The various options currently include striping, tube delineators, concrete curbs, and possibly others.    !" # $% !" &% ## C h as k a ## Roa d ## H u m m i n g b i r d ## R o a d ## M u r r a y ## H i ll R oa d ## Park S tr e e t ## P l ea s a n t ## S t r e e t ## G l e n c o e ## R o a d ## A cademy A v e nu e ## C o l l e g e ## A v e n u e ## M u r r a y ## S t r e e t ## M o r s e ## A v e n u e ## M a y f lo w er ## R o a d ## C h as k a ## Roa d ## H u m m i n g b i r d ## R o a d ## M u r r a y ## H i ll R oa d ## Park S tr e e t ## P l ea s a n t ## S t r e e t ## G l e n c o e ## R o a d ## A cademy A v e nu e ## C o l l e g e ## A v e n u e ## M u r r a y ## S t r e e t ## M o r s e ## A v e n u e ## M a y f lo w er ## R o a d ## W a t e r ## S t r e e t ## G a l pi n ## L a k e ## R o a d ## W a t e r ## S t r e e t ## G a l pi n ## L a k e ## R o a d ## O a k ## S t r e e t ## O a k ## S t r e e t 19 7 ## Mud Pond ## College Lake ## Studer Pond ## Mitten Pond ## Mud Lake ## Galpin Lake ## Mud Pond ## College Lake ## Studer Pond ## Mitten Pond ## Mud Lake ## Galpin Lake ## ShorewoodShorewood ## Excelsior ## Excelsior ## Chanhassen ## Chanhassen ## Lake ## Black ## Bay ## Park ## Bay ## Carman ## Minnetonka ## Lake ## Vi i i ## Lake ## Bay ## Carson ## Bay ## Albans ## St ## Lake ## Silver ## Minnetonka ## Lake ## Lake ## Christmas ## Deephaven ## Excelsior To n k a B a y ## Greenwood ## Shorewood ## Excelsior ## Greenwood ## Deephaven ## Tonka Bay ## Chanhassen ## Minnetonka ## Excelsior ## Greenwood ## Deephaven ## Tonka Bay ## Chanhassen ## Minnetonka ## SHOREWOODSHOREWOOD ## Legend ## Existing TrailPotential On Roadway Pedestrian Connection ## Proposed Shared-Use PathShared-Use Path (Completed in 2026) ## Traffic Direction ## City of Chanhassen and City of ExcelsiorCity of Shorewood ## MM ## S An 8-foot shared-use path located behind the back of the curb and retaining walls to reduce wetland impacts, or a boardwalk separated from the roadway to minimize wetland impacts. 70–80% of traffic is northbound. e ee t Remove right turn lane on TH 7 and ability for vehicles to turn right and head southbound on Galpin Lake Road. •  H 7 to C ## Chaska RoOther Impr  anhasse ad to Gal ovem  Page 16 of 79 Version 2: 7/27/2026   • Mill and overlay with spot street repairs• Sidewalk and trail improvements• Possibly add concrete curb and gutter on west side to accommodate sidewalk/trails• Spot utility repairs to watermain, sanitary sewer, and storm sewer where needed• Project led and administered by Shorewood   • Shorewood, Minnetonka, Chanhassen all utilizing Municipal State Aid Funds  • City of Shorewood: $1.4M – $2.3M• City of Minnetonka: $1.05M• City of Chanhassen: $90k  2025 2026 2027 2028 2029 ## Project ScopingFinal DesignŽŶƐƚƌƵĐƟŽŶ     • Pavement rating = 46/100• Street, sidewalk/trails, and drainage must meet Municipal State Aid Standards• Sidewalk/Trails: ◊ ADA compliance◊ Rehab current width, enlarge to 8-foot trails, include turf boulevard? » Wider trails and boulevards require easement acquisition ◊ Coordination between all cities on size, location, connectivity, and maintenance • On street bike accommodations• Underlying sanitary sewer and watermain are not due for replacement• Riley/Purgatory/Bluff Creek Watershed – project crosses Purgatory Creek• Future 2031 Vine Hill Road project from Delton Ave to Kingswood Terrace ◊ Led and administered by Minnetonka◊ Adding trail to east side◊ Add lighted pedestrian crossing at Kingswood Terrace      !"# $% ## W a t e r f o r d ## P l a c e ## N e a r ## M t n ## B o u l e v a r d ## C h a r t w e l l ## H i l l ## V a l l e y ## D r i v e ## H a n u s ## R o a d ## T r a p p e r s ## P a s s ## B a r r i n g t o n ## D r i v e ## P e n n i n g t o n ## A v e n u e ## C r e e k ## V i e w ## T r a i l ## B l u e b i r d ## L an e ## S p r i n g ## C r e s t ## D r i v e ## M u i r f i e l d ## C i r c l e ## V i n e ## R i d g e ## R o a d ## S w e e t w a t e r ## C u r v e ## S i l v e r ## L a k e ## T r a i l ## M c ## K i n l e y ## P l a c e ## C l e a r ## V i e w ## D r i v e ## S u n n y ## R o a d ## K i n g s w o o d ## T e r r a c e ## W a t e r f o r d ## P l a c e ## N e a r ## M t n ## B o u l e v a r d ## C h a r t w e l l ## H i l l ## V a l l e y ## D r i v e ## H a n u s ## R o a d ## T r a p p e r s ## P a s s ## B a r r i n g t o n ## D r i v e ## P e n n i n g t o n ## A v e n u e ## C r e e k ## V i e w ## T r a i l ## B l u e b i r d ## L an e ## S p r i n g ## C r e s t ## D r i v e ## M u i r f i e l d ## C i r c l e ## V i n e ## R i d g e ## R o a d ## S w e e t w a t e r ## C u r v e ## S i l v e r ## L a k e ## T r a i l ## M c ## K i n l e y ## P l a c e ## C l e a r ## V i e w ## D r i v e ## S u n n y ## R o a d ## K i n g s w o o d ## T e r r a c e ## C o v i n g t o n ## R o a d ## Covington Road ## O l d ## M a r k e t ## R o a d ## D e l l ## R oa d ## V i n eH i l l ## R o a d ## C h a n h a s s e n ## R o a d ## Ma n c h e s t e r ## S t r ee t ## R e d ## C h e r r y ## L a n e ## M c ## K i n l e y ## C o u r t ## C a s c a d e ## P a s s ## C a s t l e ## R i d g e ## C o u r t ## T o w n l i n e ## R o a d ## C o v i n g t o n ## R o a d ## Covington Road ## O l d ## M a r k e t ## R o a d ## D e l l ## R oa d ## V i n eH i l l ## R o a d ## C h a n h a s s e n ## R o a d ## Ma n c h e s t e r ## S t r ee t ## R e d ## C h e r r y ## L a n e ## M c ## K i n l e y ## C o u r t ## C a s c a d e ## P a s s ## C a s t l e ## R i d g e ## C o u r t ## T o w n l i n e ## R o a d 101 62 ## Silver Lake ## P u r g a t o r y ## C r e e k ## Silver Lake ## P u r g a t o r y ## C r e e k ## Park ## Silverwood ## Covington Park ## Park ## Silverwood ## Covington Park ## ShorewoodShorewood ## Minnetonka ## Minnetonka ## Chanhassen ## Chanhassen ## Eden Prairie ## Eden Prairie ## HENNEPIN COUNTYHENNEPIN COUNTY ## CARVER COUNTY ## CARVER COUNTY ## NN ee a rrr ## MM t n ## B ## SSS i ll vvvv l ee v rrr ## LLLLL aa kkkk e ## TTTTTT rrrr aa i l ## Legend 2029 Vine Hill Road Project2031 Vine Hill Road Project with Added Trail on East SideExisting Pedestrian Facilities ## ChanhassenEden PrairieShorewoodMinnetonka ## Lake ## Black ## Bay ## Park ## Bay ## Carman ## Minnetonka ## Lake ## Vi i i ## Lake ## Bay ## Carson ## Bay ## Albans ## St ## Lake ## Silver ## Minnetonka ## Lake ## Lake ## Christmas ## Deephaven ## Excelsior To n k a B a y ## Greenwood ## Shorewood ## Excelsior ## Greenwood ## Deephaven ## Tonka Bay ## Chanhassen ## Minnetonka ## Excelsior ## Greenwood ## Deephaven ## Tonka Bay ## Chanhassen ## Minnetonka ## SHOREWOODSHOREWOOD ## Potential Lighted ## Pedestrian Crossing ## Middle Leg of ## Purgatory Creek ## Challenging ADA ## Route Due to Existing Street Grade of 10% ## RRR oo a dd • ## City of City of City Page 17 of 79 Page 18 of 79 Page 19 of 79 ## PROJECT SCOPE • Update outdated air exchange system and fans in the public works garage. • Upgrade the outdated heating units in the public works garage to a radiant heat system. • Construct an addition to the existing public works building along with renovating the existing building to include expanded office space, employee area and restroom/locker rooms. • Construct an addition to the existing public works equipment shop to include an additional mechanics bay. • Construct an addition to the existing public works building to include heated storage. ## FUNDING • Shorewood - General fund and enterprise utility funds. ## BUDGET/SCHEDULE • Air exchange system & fans (garage) – 2027: $200,000 • Radiant heat (garage) – 2028: $200,000 • Rehab floor (garage) – 2029: $192,000 • PW building addition & renovation – 2031: $1,384,500 • Mechanic’s bay – 2032: $520,000 • Heated storage – 2032: $162,500 ## ISSUES/OPPORTUNITIES • In 2023, the City conducted a public works facility study that showed a significant deficiency in office, work and storage space. • Since the original public works building was built, the department (fleet and personnel) has more than doubled in size. • The facility heating units and air exchange systems is original to the building and requires a compliance upgrade. • Garage heating is done through inefficient forced air units. ## 2027-2032 Public Works Facility Improvements ## Air Exchange Unit Sign area ## Forced Air Heating Unit ## Garage Area ## Mechanics Bay Page 20 of 79 Page 21 of 79 Page 22 of 79 Page 23 of 79 Version 2: 7/27/2026   • Channel capacity will be increased upstream and downstream of Noble Road by removal of sediment & clearing of trees/brush within the channel. Drainage and Utility Easements would be acquired from approximately four to seven properties.   • Shorewood  • City of Shorewood: ◊ Channel cleaning upstream and downstream of Noble Road = $266,000  2026 2027 2028 ## Project ScopingFinal DesignŽŶƐƚƌƵĐƟŽŶ     • The future Channel Stabilization project is not included in the proposed schedule or budget and is not currently identified in the Capital Improvement Plan. • Noble Road has a pavement rating of 58 out of 100 and is planned for milling and overlay. A watermain could be added in 10 to 15 years. • The project area is located within the Minnehaha Creek Watershed.• The Grant Lorenz Channel falls under the jurisdiction of the U.S. Army Corps of Engineers. Significant impacts, such as hard armoring, channel widening, or realignment, will require 12 to 18 months for permitting. Smaller impacts, including bioengineered stabilization and limited sediment removal, will require approximately six months for permitting. • Large wetlands in the area are under the jurisdiction of the Minnesota Department of Natural Resources (MnDNR). • Channel widening would affect approximately four to seven properties, while the future Channel Stabilization project will impact five properties. Drainage and Utility Easement acquisition will be required for nine to twelve properties. • For the future Channel Stabilization project, properties adjacent to Grant Lorenz Road can be addressed individually and do not require cooperation from neighboring parcels. • Increasing stream capacity will require cooperation from all neighboring property owners to be successful.      !  " #  $%&$ !' ## E u r e k a ## R o a d ## B i r c h ## B l uf f ## R o ad ## V a l l e y ## W o o d ## L ane ## N o b l e ## R o a d ## E d g e w o o d ## R o a d ## G r a n t ## L o re n z ## R oa d ## O ak ## L e a f ## T r ail ## S t r aw b e r r y ## L a ne ## C athca rt ## Drive ## W i l d r o s e ## L a n e ## M ## P a r k ## L a n e ## E u r e k a ## R o a d ## B i r c h ## B l uf f ## R o ad ## V a l l e y ## W o o d ## L ane ## N o b l e ## R o a d ## E d g e w o o d ## R o a d ## G r a n t ## L o re n z ## R oa d ## O ak ## L e a f ## T r ail ## S t r aw b e r r y ## L a ne ## C athca rt ## Drive ## W i l d r o s e ## L a n e ## M ## P a r k ## L a n e ## Lake MinnetonkaLake Minnetonka ## Smithtown Ponds ## Smithtown Ponds ## S m i t h t o w n ## R o ad ## E ur e k a ## R o a d ## S m i t h t o w n ## R o ad ## E ur e k a ## R o a d ## Freeman ParkFreeman Park ## Lake Minnetonka LRT Regional TrailLake Minnetonka LRT Regional Trail ## School ## Elementary ## Minnewashta ## School ## Elementary ## Minnewashta ## HENNEPIN COUNTYHENNEPIN COUNTY ## Legend ## Currently Slated for Mill and OverlayStream Channel ## Furture Channel StabilizationIncrease Stream Capacity ## City Owned ParcelParcels that Require Permanent EasementsCity of Shorewood ## Lake ## Black ## Bay ## Park ## Bay ## Carman ## Minnetonka ## Lake ## Vi i i ## Lake ## Bay ## Carson ## Bay ## Albans ## St ## Lake ## Silver ## Minnetonka ## Lake ## Lake ## Christmas ## Deephaven ## Excelsior To n k a B a y ## Greenwood ## Shorewood ## Excelsior ## Greenwood ## Deephaven ## Tonka Bay ## Chanhassen ## Minnetonka ## Excelsior ## Greenwood ## Deephaven ## Tonka Bay ## Chanhassen ## Minnetonka ## SHOREWOODSHOREWOOD Currently slated for mill and overlay. Roadway underwater during 100-year events. Wetland under MnDNR jurisdiction. Future channel stabilization: To control erosion, add vegetation, rock riffles, or hard armoring. Acquire Drainage and Utility Easements from five properties. Grant Lorenz Channel is under the Army Corps of Engineers jurisdiction. ## WWW i ll dd rr oo ss e ## LLLL a n Replace and/or clean culvert under Grant Lorenz Road. ## WWW ooo o Replace and/or clean culvertRe /or clean cu place and ## R ll ## RR uu ## WWW ## VVVVVVV a ll ll ee yyyyyyyyy ## WWWW Roadway underwater during 10-year and 100-year events; frequent ice buildup during spring thaw. Currently slated for mill & overlay. Water could be added in 10-15 years. Increase stream capacity: Excavate to a natural channel and secure Drainage and Utility Easements from 4–7 properties. ontrol tro nnt t nn s ## Project S inal ## ŽŶƐƚ Page 24 of 79 2027-2036 ## CAPITAL IMPROVEMENT PLAN Proposed July 27, 2026 Page 25 of 79 ## CITY OF SHOREWOOD ## 2027-2036 CAPITAL IMPROVEMENT PLAN ## TABLE OF CONTENTS ## PAGE NO. ## INTRODUCTION Introduction .......................................................................................................... 1 Authorizing Resolution .......................................................................................... 4 Capital Improvement Fiscal Policy ......................................................................... 5 Planning Commission Review ................................................................................ 6 ## TABLES Funding Source Summary ...................................................................................... 7 Department Summary ........................................................................................... 8 Project by Funding Source and Department ......................................................... 9 ## CAPITAL IMPROVEMENT PLAN FUNDS ## Special Revenue Fund ## Shorewood Community and Event Center Fund (201) ........................................ 15 Capital Funds ................................................................................................................. 17 Park Improvement Capital Fund (402) ................................................................ 18 Equipment Replacement Capital Fund (403) ....................................................... 21 Street Reconstruction Capital Fund (404) ........................................................... 24 Municipal State Aid Capital Fund (405) ............................................................... 28 Community Infrastructure Fund (450) ................................................................. 32 ## Enterprise Funds Water Fund (601) ................................................................................................ 35 Sanitary Sewer Fund (611) .................................................................................. 37 Stormwater Management Fund (631) ................................................................. 39 Page 26 of 79 July 27, 2026 ## Honorable Mayor and City Council Members Residents of the City of Shorewood ## Dear Mayor and City Council: ## 2027-2036 CAPITAL IMPROVEMENT PLAN OVERVIEW The 2027-2036 Capital Improvement Plan (CIP) is a coordinated schedule of municipal capital projects, improvements, and purchases for the years 2027 through 2036. This ten-year planning document represents the combined efforts of City Staff, advisory commission, residents, and the City Council. It is intended to alert the Council and residents to the major capital needs on the horizon. The first year of the plan becomes part of the various budgets and relates almost completely to the operating budget that is approved on an annual basis. The remaining years represent an estimate of project and equipment needs and funding capabilities of the City. A Capital Improvement Program (CIP) is a planning tool and is therefore structured to present a meaningful, long-range perspective of the City’s capital needs. The CIP lists significant improvements in infrastructure and equipment that the City should plan for. It becomes a financial planning tool that identifies funding sources and funding availability and helps decision- makers to determine affordability. With the approval or amendment by the Council, the CIP provides an implementation program for Staff to work on. A CIP should be developed to combine realistic needs with realistic expectations about expenditures and should reflect projects of other units of government (e.g. MnDOT, Hennepin County, watershed districts, etc.), when known, so that opportunities to coordinate City projects can be identified. Shorewood has developed a philosophy about what is to be included when a CIP is presented. The following points, subject to Council modification, are part of that understanding. Projects in Shorewood’s CIP are listed with particular care in terms of the likelihood that they will be implemented in the first or second year of the program. Projects listed in years three through five of the program identi fy projects and opportunities that merit further evaluation. Ther e are programs for on-going outlays for which individual projects are not well-defined currently. For instance, the City has a pavement management program to asses s the Page 27 of 79 condition of local streets, and it is updated every year. It is acceptable to budget funds for bituminous overlays each year without listing specific streets after the first year. • Placing a project or outlay in the CIP does not commit the City Council to accomplish it. The Council’s normal processes of authorizing studies to be prepared and gaining public comment need to be followed. A CIP listing does not in any way imply a done deal. The League of Minnesota Cities’ Handbook for Minnesota Cities contains the following discussion of Capital Improvement Budgeting. “Capital budgeting is a list of needed capital improvements, their order of priority, and the means of financing them. Besides being one of the major tools of planning, a capital budget can provide some or all of the following advantages: • Keep the public informed of future needs and protect council members from pressure groups seeking projects rated low on the priority list • Often reduce or stabilize the tax rate • Establish an orderly capital improvement program, preventing the peaks and valleys in a community’s debt retirement program • Frequently allow a community to move gradually to a pay-as-you-go program of capital expenditure financing for a considerable portion of its improvements • Capital improvements take place in a logical and orderly manner, rather than haphazardly • Integrate the plans and projects of all city departments and agencies, eliminating conflicting and overlapping projects • By ensuring prior consideration for all capital improvements, it helps guarantee ample time for detailed and careful planning of the actual program.” “The City puts improvement projects into a multiple-year capital improvement program on the basis of the established priority. When the council reviews it in light of the community’s financial situation, it may find the city should defer some of the projects beyond the improvement period and other projects indefinitely.” “Following this, the budget officer recommends projects for the coming budget year. The recommendations, in effect, become the recommended program.” “Priorities in the capital budget program for the following years remain tentative, and the council should review them annually. At that time, the council should consider the addition of new projects and the deletion of others.” A CIP is not a document set in stone. It is a snapshot of needs, schedule of improvements, and schedule of financing, typically five years into the future, with an additional five years for long- term financial planning. It is intended that the CIP be reviewed and changed as physical conditions, financial conditions, and changes in priorities occur. Page 2 of 42 Page 28 of 79 ## FUNDING SOURCES AND FINANCING Planning for capital improvements requires sound and economical financing. The exact funding method is based on the City’s general policies, past practices, legal and practical considerations. The preparation of a ten-year CIP requires City Staff to make material estimates about project scope, costs of labor and materials, future interest rates, and other items. Many times, these estimates come from Staff experience, projections published in other sources, vendor estimates, or a combination of several sources. Generally, the estimates for earlier years are more precise than later years. Prioritization is a critical part of the CIP process because the City doesn’t have enough resources to do all the projects that we would like. Some projects have reliable funding sources, but many do not. ## CIP AND COMPREHENSIVE PLAN The CIP is an implementation program of the City’s Comprehensive Plan. Minn. Stat. §462.356 Subd. 2 and City Code 201.07 Subd. 10 provides that the City’s Planning Commission is to review the CIP prior to its adoption by the City Council. On October 6, 2026, the Shorewood Planning Commission will review the proposed CIP and to ensure that the capital projects within the CIP are generally consistent with, and/or generally contemplated by the City’s Comprehensive Plan. ## SUMMARY The 2027- 2036 Capital Improvement Plan was prepared according to the priorities and direction of the City Council and Staff believes it provides a responsible plan to balance the City’s infrastructure needs and financial position. Respectfully submitted, ## Marc Nevinski Jeanne Schmuck ## City Administrator Finance Director ## Matt Morreim Andrew Budde ## Public Works Director City Engineer Page 3 of 42 Page 29 of 79 ## CITY OF SHOREWOOD ## COUNTY OF HENNEPIN ## STATE OF MINNESOTA ## RESOLUTION 26-XXX ## A RESOLUTION ADOPTING THE 2027-2036 CAPITAL IMPROVEMENT PLAN ## AND 2027 CAPITAL PROJECT FUND BUDGETS WHEREAS, City staff have presented the proposed 2027-2036 Capital Improvement Plan (CIP) and 2027 capital project fund budgets at meetings through December, 2026; and WHEREAS, the City Council has reviewed the CIP and budgets and made modifications to each that reflect desired community service levels; and WHEREAS, these budgets represent a reasonable estimate of what needs to be spent to provide the desired service level. ## NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SHOREWOOD, ## MINNESOTA AS FOLLOWS: 1. The 2027-2036 Capital Improvement Plan is hereby adopted as presented with this adoption subject to Planning Commission review and determination of compliance with the Comprehensive Plan. ## 2. The Park Improvement, Equipment Replacement, Street Reconstruction, MSA, Trail Construction, and Community Infrastructure budgets are hereby adopted as presented. Adopted by the City Council of Shorewood, Minnesota this 14 th day of December 2026. __________________________ ## Jennifer Labadie, Mayor ## Attest: ___________________________ ## Sandie Thone, City Clerk Page 4 of 42 Page 30 of 79 ## CAPITAL IMPROVEMENTS FISCAL POLICY ## GENERAL POLICY Shorewood’s Capital Improvements Program reflects an assessment of the community’s needs and its ability to pay for major improvements. It is founded on the policy that reinvestment required for replacement, maintenance, or the increased efficiency of existing systems shall have priority over investments for expansion of existing systems or the provision of new services. ## FUNDING PRIORITIES Capital spending proposals will generally be funded on the following priority basis: 1. Those projects necessary for contributing to the public health and welfare. 2. Those projects which will help to maintain an existing system. 3. Those projects that will make an existing system more efficient. 4. Those projects representing the expansion of an existing system for new service or completely new public facility or service. ## FUNDING PRINCIPLES As a result, the following principles shall govern the implementation of the recommended ## Capital Improvements Program: 1. The City will make all capital improvements in accordance with the adopted Capital Improvements Program. 2. The City will develop a multi-year plan for Capital Improvements and update it annually. 3. The City will coordinate development of the Capital Improvements Program with development of the annual operating budget. Future optional costs associated with new capital improvements will be projected and included in operation budget forecasts. Page 5 of 42 Page 31 of 79 5755 Country Club Road, Shorewood, MN 55331 ● 952.960.7900 ● www.ci.shorewood.mn.us ## To: Shorewood Mayor & City Council From: Shorewood Planning Commission Date: October 6, 2026 Subject: 2027-2036 Capital Improvement Program (CIP) At the October 6, 2026 meeting, the Planning Commission reviewed the proposed 2027-2036 Capital Improvement Program (CIP) pursuant to Minnesota State Statutes 462.356, Subd. 2. and City Code 201.07, Subd. 10. ## Findings and Conclusions: NOW, THEREFORE, in accordance with Minnesota State Statute 462.356, Subd. 2. and City Code 201.07, Subd. 10, the Planning Commission finds that the capital projects within the CIP are generally consistent with, generally implement, and/or are generally contemplated by the City’s Comprehensive Plan. ## Ken Huskins, Chair ## ATTEST: ## Sandie Thone, City Clerk Page 6 of 42 Page 32 of 79 Page 7 of 42 Page 33 of 79 Page 8 of 42 Page 34 of 79 Page 9 of 42 Page 35 of 79 Page 10 of 42 Page 36 of 79 Page 11 of 42 Page 37 of 79 Page 12 of 42 Page 38 of 79 Page 13 of 42 Page 39 of 79 Page 14 of 42 Page 40 of 79 ## SPECIAL REVENUE ## Fund Mission This fund was established to account for the resources accumulated from events and activities held at the City’s community center, and the payment of expenditures related to operations of the community center. The City has committed charges for services revenues for operations. Property taxes support the community center when fees generated from facility rental are not sufficient to cover expenses. ## Fund Description/Services The Shorewood Community & Event Center (SCEC) is nestled in the woods right next to Shorewood City Hall and Badger Park to provide recreational services and programs. The City partners with the South Shore Senior Partners to provide Senior programming. The SCEC offers multiple room rentals, with spaces for birthday parties, graduations, weddings, receptions, memorials, HOA meetings, teleconferencing, dances, and more. ## Fund Goals  Implement recommendations provided by the SCEC Task Force.  Increase rental income while decreasing expenditures to achieve 70% cost recovery.  Maintain a functional facility by performing routine maintenance and providing incremental building updates. ## Fund Performance Measures ## Performance Measure 2024 ## Actual 2025 ## Actual 2026 ## Projected 2027 ## Estimated Total Rental Income $66,075 $82,269 $82,000 $85,000 Total Facility Rentals 371 432 440 500 Cost Recovery – 70% Target 38.86% 48.68% 49% 55% ## Revenue/Expenditures ## ProposedBudgetPercentage ## ActualActualBudgetBudgetChangeChange ## Description 202420252026202720272027 ## REVENUES ## Taxes 105,000$ 122,000$ 145,000$ 177,677$ 32,677$ 22.54% ## Charges for Services 66,286 82,269 68,000 82,000 14,000 20.59% ## Miscellaneous 3,040 5,364 3,150 2,500 (650) -20.63% ## TOTAL REVENUES 174,326$ 209,634$ 216,150$ 262,177$ 46,027$ 21.29% ## EXPENDITURES ## Personnel Services 88,701$ 113,363$ 68,480$ 125,010$ 56,530$ 82.55% ## Supplies 33,093 22,145 29,340 29,510 170 0.58% ## Other Services and Charges 35,326 38,992 54,210 47,451 (6,759) -12.47% ## Capital Outlay 21,280 5,995 21,500 32,021 10,521 48.93% ## TOTAL EXPENDITURES 178,401$ 180,496$ 173,530$ 233,992$ 60,462$ 34.84% ## BEGINNING FUND BALANCE 78,404$ 74,329$ 103,467$ 146,087$ ## Net Change in Fund Balance (4,075) 29,138 42,620 28,185 ## ENDING FUND BALANCE 74,329$ 103,467$ 146,087$ 174,272$ ## SHOREWOOD COMMUNITY AND EVENT CENTER FUND (201) Page 15 of 42 Page 41 of 79 Page 16 of 42 Page 42 of 79 ## CAPITAL IMPROVEMENT ## Capital Funds Capital Projects funds are used to account for the acquisition and construction of major capital facilities other than those financed by enterprise funds. Details of these funds can be found in the 10- Year Capital Improvement Plan. ## Fund Description/Services Park Capital Improvement Fund - This fund accounts for parkland acquisition and other capital improvements in the City parks. Equipment Replacement Fund - This fund was established to account for various capital acquisitions for the City governmental funds. This fund was developed in order to eliminate fluctuations in departmental operating budgets from year to year due to capital outlay purchases. Street Reconstruction Fund - This fund was established for the purpose of funding the periodic reconstruction of City streets and roadways. MSA Road Reconstruction Fund - This fund was established to account for the accumulation of Municipal State Aid (MSA) to fund the periodic reconstruction of MSA designated roads. Community Infrastructure Fund - This fund was established to account for various capital improvement projects that may be financed without the need to issue bonds. ## Revenue/Expenditures ## ParkEquipmentStreetMunicipalCommunityTotal ## ImprovementReplacementImprovementState AidInfrastructureCapital DescriptionFund (402)Fund (403)Fund (404)Fund (405)Fund (450)Funds ## REVENUES Taxes355,500$ 275,000$ -$ -$ 230,000$ 860,500$ Municipal State Aid- - - - - - Miscellaneous2,230 920 365,510 580 - 369,240 Transfers In- - - - - - TOTAL REVENUES357,730$ 275,920$ 365,510$ 580$ 230,000$ 1,229,740$ ## EXPENDITURES Supplies-$ -$ -$ -$ -$ -$ Other Services and Charges- - - - 30,000 30,000 Capital Outlay350,000 367,600 2,262,119 - 200,000 3,179,719 TOTAL EXPENDITURES350,000$ 367,600$ 2,262,119$ -$ 230,000$ 3,209,719$ ## BEGINNING FUND BALANCE473,825$ 178,713$ 1,851,792$ 43,663$ 42,769$ Net Change in Fund Balance7,730 (91,680) (1,896,609) 580 - ## ENDING FUND BALANCE481,555$ 87,033$ (44,817)$ 44,243$ 42,769$ ## SUMMARY Page 17 of 42 Page 43 of 79 ## CAPITAL IMPROVEMENT ## Fund Mission This fund was established to account for the resources accumulated from events and activities held at the City’s community center, and the payment of expenditures related to operations of the community center. The City has committed charges for services revenues for operations. Property taxes support the community center when fees generated from facility rental are not sufficient to cover expenses. ## Fund Description/Services The Park Improvement Capital Fund provides for major facilities and equipment for City parks. Fees collected from new subdivision development and transfers from the General Fund are dedicated for the development and improvement of City parks. ## Revenue/Expenditures ## ProposedBudgetPercentage ## ActualActualBudgetBudgetChangeChange ## Description202420252026202720272027 ## REVENUES Taxes128,000$ 135,000$ 305,500$ 355,500$ 50,000$ 16.37% Park Dedication Fees112,500 97,600 - - - Miscellaneous321,979 67,873 2,230 2,230 - 0.00% Transfers In105,000 - - - - ## TOTAL REVENUES667,479$ 300,473$ 307,730$ 357,730$ 50,000$ 16.25% ## EXPENDITURES Supplies-$ -$ -$ -$ -$ Other Services and Charges23,688 42,191 - - - Capital Outlay45,120 - 45,000 350,000 305,000 677.78% ## TOTAL EXPENDITURES68,808$ 42,191$ 45,000$ 350,000$ 305,000$ 677.78% ## BEGINNING FUND BALANC ## E(645,858)$ (47,187)$ 211,095$ 473,825$ Net Change in Fund Balance598,671 258,282 262,730 7,730 ## ENDING FUND BALANCE(47,187)$ 211,095$ 473,825$ 481,555$ ## PARK IMPROVEMENT CAPITAL FUND (402) Page 18 of 42 Page 44 of 79 Page 19 of 42 Page 45 of 79 Page 20 of 42 Page 46 of 79 ## CAPITAL IMPROVEMENT ## Fund Mission This fund was established for the purpose of funding the replacement of capital equipment. ## Fund Description/Services The Equipment Replacement Capital Fund is supported by Property Taxes and there have been transfers from the General Fund over the years as well. These sources provide for the accumulation of funds for acquisition and replacement of equipment utilized in City operations and infrastructure. ## Revenue/Expenditures ## ProposedBudgetPercentage ## ActualActualBudgetBudgetChangeChange ## Description202420252026202720272027 ## REVENUES Taxes128,000$ 165,000$ 215,000$ 275,000$ 60,000$ 27.91% Sale of Capital Assets3,854 123,508 - - - Miscellaneous11,815 3,117 920 920 - 0.00% Transfers In- 400,000 - - - ## TOTAL REVENUES143,669$ 691,625$ 215,920$ 275,920$ 60,000$ 27.79% ## EXPENDITURES Buildings & Structures30,901$ 605,897$ -$ -$ -$ Machinery & Equipment113,193 344,994 74,900 344,000 269,100 359.28% Furniture & Fixtures- 242 11,200 23,600 12,400 110.71% ## TOTAL EXPENDITURES144,094$ 951,132$ 86,100$ 367,600$ 281,500$ 326.95% ## BEGINNING FUND BALANC ## E308,826$ 308,400$ 48,893$ 178,713$ Net Change in Fund Balance(426) (259,507) 129,820 (91,680) ## ENDING FUND BALANCE308,400$ 48,893$ 178,713$ 87,033$ ## EQUIPMENT REPLACEMENT CAPITAL FUND (403) Page 21 of 42 Page 47 of 79 Page 22 of 42 Page 48 of 79 Page 23 of 42 Page 49 of 79 ## CAPITAL IMPROVEMENT ## Fund Mission This fund was established for the purpose of funding the periodic maintenance, upgrade, and reconstruction of City streets and roadways. ## Fund Description/Services The Street Improvement Capital Fund is supported by Property Tax Levy, Bond Proceeds. There have also been transfers periodically to supplement the fund with general operating surplus. The City’s strategy to finance projects has been to bond. Bonds were issued from 2020-2023 to finance various projects within the fund, the City’s outstanding debt will essentially grow larger each year until the first bonds issued in 2020 are paid off. ## Revenue/Expenditures ## ProposedBudgetPercentage ## ActualActualBudgetBudgetChangeChange ## Description202420252026202720272027 ## REVENUES Taxes128,000$ 170,500$ -$ -$ -$ Mis cellaneous181,602 615,646 65,510 365,510 300,000 457.95% Bond Proceeds- - - - - Transfers In- - - - - ## TOTAL REVENUES309,602$ 786,146$ 65,510$ 365,510$ 300,000$ 457.95% ## EXPENDITURES Supplies-$ -$ -$ -$ -$ Other Services and Charges415,240 629,140 - - - Capital Outlay985,347 1,703,227 315,000 2,262,119 1,947,119 618.13% Transfers Out- - - - - TOTAL EXPENDITURES1,400,587$ 2,332,367$ 315,000$ 2,262,119$ 1,947,119$ 618.13% ## BEGINNING FUND BALANC ## E4,738,489$ 3,647,503$ 2,101,282$ 1,851,792$ Net Change in Fund Balance (1,090,986) (1,546,221) (249,490) (1,896,609) ## ENDING FUND BALANCE3,647,503$ 2,101,282$ 1,851,792$ (44,817)$ ## STREET RECONSTRUCTION CAPITAL FUND (404) Page 24 of 42 Page 50 of 79 Page 25 of 42 Page 51 of 79 Version 2: 7/27/2026   • Greenwood has initiated planning for improvements to Manor Road from Excelsior Boulevard to St. Albans Bay Road and has proposed pavement reclamation • Shorewood is reviewing potential drainage improvements on its side of the roadway, and range from improving the existing bituminous flume or adding curb and gutter and storm sewer.   • City of Greenwood • City of Shorewood  • Greenwood = $150,000• Shorewood = $500,000 ($350,000 Storm Sewer, $150,000 Roadway)         2025 2026 2027 2028 ## ScopingDe sign ŽŶƐƚƌƵĐƟŽŶ     • Manor Road only serves one Shorewood resident’s driveway. • There have not been drainage related complaints in the area, but staff see the project as an opportunity to improve drainage so that it requires less maintenance. Currently, the bituminous swale fills with leaves and sediment where water sheet flows ov er the roadway. A new storm sew er outlet to the lake/wetland could potentially be added through a parcel of land owned by Greenwood. • According to the 2025 Pavement Management Plan, Manor Road has a Pavement Condition Score of 91%, requires high maintenance, and has high road use. Greenwood is planning to complete soil borings in the fall of 2025 which will provide better insight on reclamation versus mill and overlay.     !" ## B a r r i n g t o n ## W a y ## O a k ## L a n e ## S t ## A l b a n s ## G r e e n ## B a r r i n g t o n ## W a y ## O a k ## L a n e ## S t ## A l b a n s ## G r e e n ## Manor ParkManor Park ## Saint Albans Bay ## Saint Albans Bay ## M an o r ## R o a d ## S t ## A lb a n s ## B a y ## R o a d ## M a n or ## Ro a d ## E x c e lsi or Boul evard ## S t ## A l b a n s ## B a y ## R o a d ## Ch an n el ## Dr iv e ## Suburba n Driv e ## M an o r ## R o a d ## S t ## A lb a n s ## B a y ## R o a d ## M a n or ## Ro a d ## E x c e lsi or Boul evard ## S t ## A l b a n s ## B a y ## R o a d ## Ch an n el ## Dr iv e ## Suburba n Driv e 7 ## Greenwood ## Shorewood ## Greenwood ## Shorewood ## Lake ## Black ## Bay ## Park ## Bay ## Carman ## Minnetonka ## Lake ## Vi i i ## Lake ## Bay ## Carson ## Bay ## Albans ## St ## Lake ## Silver ## Minnetonka ## Lake ## Lake ## Christmas ## Deephaven ## Excelsior To n k a B a y ## Greenwood ## Shorewood ## Excelsior ## Greenwood ## Deephaven ## Tonka Bay ## Chanhassen ## Minnetonka ## Excelsior ## Greenwood ## Deephaven ## Tonka Bay ## Chanhassen ## Minnetonka ## SHOREWOODSHOREWOOD ## AAAAAA ll bb ## Legend ## City of Chanhassen and City of GreenwoodCity of Shorewood Proposed Curb and Gutter with Minimal Storm SewerProject Location Proposed Storm Sewer Outlet ## Wetlands  ## GreenwShorew  ## Page 26 of 42 Page 52 of 79 Version 2: 7/27/2026   • Construct new eight-foot-wide trails from Chaska Road to the existing signal system at Oak Street, County Road 19, and State Highway 7. • Provide a continuous pedestrian and bicycle route connecting Chanhassen to Excelsior.• The ongoing TH 7 Corridor Study may be a significant factor in determining the project scope.   • Shorewood-Municipal State Aid Funds• MnDOT• Local Funds• Potential Grants (DNR, MnDOT, Safe Routes to School)  • TH 7 to Chanhassen: $940,000–$1,330,000• Chaska Road to Galpin Lake Road: $810,000• Other Improvements/Changes Due to TH 7 Corridor Study: Unknown         2026 2027 2028 2029 ## Project ScopingFinal ## Design ŽŶƐƚƌƵĐƟŽŶ     • In 2024, the City of Chanhassen completed a trail connection on the east side of Galpin Lake Road extending to the municipal boundary. • MnDOT is currently conducting a TH 7 Corridor Study to evaluate safety and operational improvements along the entire corridor, from I-494 east to St. Bonifacius west. • Segments of trails could be completed as separate projects or coordinated with MnDOT’s 2029 Pavement Preservation Project. • A potential solution invol ## ves converting Galpin Lake Road from TH 7 to Mayf lower R oad into a one- way northbound route. Two-way traffic would be rerouted onto Ma yflower R ## oad and Chaska Road. An eight-foot-wide trail or boardwalk could be extended from Chanhassen to Ma yflower R oad, and then the existing southbound lane would be converted to a northbound lane and the current northbound lane converted up to TH 7 for pedestrian and bicycle use. • Conversion of Galpin Lake Road to a single northbound lane would require a variance from Municipal State Aid Rules and may not be approved. If not approved, the MSA route may need to be changed to Mayflower Road and Chaska Road. • Staff is evaluating various delineators to safely separate pedestrians from vehicles and still provide adequate access to driveways. The various options currently include striping, tube delineators, concrete curbs, and possibly others.    !" # $% !" &% ## C h as k a ## Roa d ## H u m m i n g b i r d ## R o a d ## M u r r a y ## H i ll R oa d ## Park S tr e e t ## P l ea s a n t ## S t r e e t ## G l e n c o e ## R o a d ## A cademy A v e nu e ## C o l l e g e ## A v e n u e ## M u r r a y ## S t r e e t ## M o r s e ## A v e n u e ## M a y f lo w er ## R o a d ## C h as k a ## Roa d ## H u m m i n g b i r d ## R o a d ## M u r r a y ## H i ll R oa d ## Park S tr e e t ## P l ea s a n t ## S t r e e t ## G l e n c o e ## R o a d ## A cademy A v e nu e ## C o l l e g e ## A v e n u e ## M u r r a y ## S t r e e t ## M o r s e ## A v e n u e ## M a y f lo w er ## R o a d ## W a t e r ## S t r e e t ## G a l pi n ## L a k e ## R o a d ## W a t e r ## S t r e e t ## G a l pi n ## L a k e ## R o a d ## O a k ## S t r e e t ## O a k ## S t r e e t 19 7 ## Mud Pond ## College Lake ## Studer Pond ## Mitten Pond ## Mud Lake ## Galpin Lake ## Mud Pond ## College Lake ## Studer Pond ## Mitten Pond ## Mud Lake ## Galpin Lake ## ShorewoodShorewood ## Excelsior ## Excelsior ## Chanhassen ## Chanhassen ## Lake ## Black ## Bay ## Park ## Bay ## Carman ## Minnetonka ## Lake ## Vi i i ## Lake ## Bay ## Carson ## Bay ## Albans ## St ## Lake ## Silver ## Minnetonka ## Lake ## Lake ## Christmas ## Deephaven ## Excelsior To n k a B a y ## Greenwood ## Shorewood ## Excelsior ## Greenwood ## Deephaven ## Tonka Bay ## Chanhassen ## Minnetonka ## Excelsior ## Greenwood ## Deephaven ## Tonka Bay ## Chanhassen ## Minnetonka ## SHOREWOODSHOREWOOD ## Legend ## Existing TrailPotential On Roadway Pedestrian Connection ## Proposed Shared-Use PathShared-Use Path (Completed in 2026) ## Traffic Direction ## City of Chanhassen and City of ExcelsiorCity of Shorewood ## MM ## S An 8-foot shared-use path located behind the back of the curb and retaining walls to reduce wetland impacts, or a boardwalk separated from the roadway to minimize wetland impacts. 70–80% of traffic is northbound. e ee t Remove right turn lane on TH 7 and ability for vehicles to turn right and head southbound on Galpin Lake Road. •  H 7 to C ## Chaska RoOther Impr  anhasse ad to Gal ovem  ## Page 27 of 42 Page 53 of 79 ## CAPITAL IMPROVEMENT ## Fund Mission This fund was established to account for the accumulation of Municipal State Aid (MSA) to fund the periodic reconstruction of MSA designated roads. ## Fund Description/Services The MSA Street Improvement Capital Fund is supported by Municipal State Aid (MSA) Funds. The MSA Street program is administered through the State of Minnesota’s Department of Transportation. The funds are used for the maintenance, upgrade, and reconstruction of City streets and roadways designated on the City’s MSA system. ## Revenue/Expenditures ## ProposedBudgetPercentage ## ActualActualBudgetBudgetChangeChange ## Description202420252026202720272027 ## REVENUES Taxes-$ -$ -$ -$ -$ Municipal State Aid- - 1,072,000 - (1,072,000) -100.00% Miscellaneous1,639 1,575 468,580 580 (468,000) -99.88% Transfers In- - - - - TOTAL REVENUES1,639$ 1,575$ 1,540,580$ 580$ (1,540,000)$ -99.96% ## EXPENDITURES Supplies-$ -$ -$ -$ -$ Other Services and Charges- - - - - Capital Outlay- - 1,540,000 - (1,540,000) -100.00% TOTAL EXPENDITURES-$ -$ 1,540,000$ -$ (1,540,000)$ -100.00% ## BEGINNING FUND BALANC ## E39,869$ 41,508$ 43,083$ 43,663$ 1.35% Net Change in Fund Balance1,639 1,575 580 580 ## ENDING FUND BALANCE41,508$ 43,083$ 43,663$ 44,243$ ## MUNICIPAL STATE AID CAPITAL FUND (405) Page 28 of 42 Page 54 of 79 Page 29 of 42 Page 55 of 79 Version 2: 7/27/2026   • Construct new eight-foot-wide trails from Chaska Road to the existing signal system at Oak Street, County Road 19, and State Highway 7. • Provide a continuous pedestrian and bicycle route connecting Chanhassen to Excelsior.• The ongoing TH 7 Corridor Study may be a significant factor in determining the project scope.   • Shorewood-Municipal State Aid Funds• MnDOT• Local Funds• Potential Grants (DNR, MnDOT, Safe Routes to School)  • TH 7 to Chanhassen: $940,000–$1,330,000• Chaska Road to Galpin Lake Road: $810,000• Other Improvements/Changes Due to TH 7 Corridor Study: Unknown         2026 2027 2028 2029 ## Project ScopingFinal ## Design ŽŶƐƚƌƵĐƟŽŶ     • In 2024, the City of Chanhassen completed a trail connection on the east side of Galpin Lake Road extending to the municipal boundary. • MnDOT is currently conducting a TH 7 Corridor Study to evaluate safety and operational improvements along the entire corridor, from I-494 east to St. Bonifacius west. • Segments of trails could be completed as separate projects or coordinated with MnDOT’s 2029 Pavement Preservation Project. • A potential solution invol ## ves converting Galpin Lake Road from TH 7 to Mayf lower R oad into a one- way northbound route. Two-way traffic would be rerouted onto Ma yflower R ## oad and Chaska Road. An eight-foot-wide trail or boardwalk could be extended from Chanhassen to Ma yflower R oad, and then the existing southbound lane would be converted to a northbound lane and the current northbound lane converted up to TH 7 for pedestrian and bicycle use. • Conversion of Galpin Lake Road to a single northbound lane would require a variance from Municipal State Aid Rules and may not be approved. If not approved, the MSA route may need to be changed to Mayflower Road and Chaska Road. • Staff is evaluating various delineators to safely separate pedestrians from vehicles and still provide adequate access to driveways. The various options currently include striping, tube delineators, concrete curbs, and possibly others.    !" # $% !" &% ## C h as k a ## Roa d ## H u m m i n g b i r d ## R o a d ## M u r r a y ## H i ll R oa d ## Park S tr e e t ## P l ea s a n t ## S t r e e t ## G l e n c o e ## R o a d ## A cademy A v e nu e ## C o l l e g e ## A v e n u e ## M u r r a y ## S t r e e t ## M o r s e ## A v e n u e ## M a y f lo w er ## R o a d ## C h as k a ## Roa d ## H u m m i n g b i r d ## R o a d ## M u r r a y ## H i ll R oa d ## Park S tr e e t ## P l ea s a n t ## S t r e e t ## G l e n c o e ## R o a d ## A cademy A v e nu e ## C o l l e g e ## A v e n u e ## M u r r a y ## S t r e e t ## M o r s e ## A v e n u e ## M a y f lo w er ## R o a d ## W a t e r ## S t r e e t ## G a l pi n ## L a k e ## R o a d ## W a t e r ## S t r e e t ## G a l pi n ## L a k e ## R o a d ## O a k ## S t r e e t ## O a k ## S t r e e t 19 7 ## Mud Pond ## College Lake ## Studer Pond ## Mitten Pond ## Mud Lake ## Galpin Lake ## Mud Pond ## College Lake ## Studer Pond ## Mitten Pond ## Mud Lake ## Galpin Lake ## ShorewoodShorewood ## Excelsior ## Excelsior ## Chanhassen ## Chanhassen ## Lake ## Black ## Bay ## Park ## Bay ## Carman ## Minnetonka ## Lake ## Vi i i ## Lake ## Bay ## Carson ## Bay ## Albans ## St ## Lake ## Silver ## Minnetonka ## Lake ## Lake ## Christmas ## Deephaven ## Excelsior To n k a B a y ## Greenwood ## Shorewood ## Excelsior ## Greenwood ## Deephaven ## Tonka Bay ## Chanhassen ## Minnetonka ## Excelsior ## Greenwood ## Deephaven ## Tonka Bay ## Chanhassen ## Minnetonka ## SHOREWOODSHOREWOOD ## Legend ## Existing TrailPotential On Roadway Pedestrian Connection ## Proposed Shared-Use PathShared-Use Path (Completed in 2026) ## Traffic Direction ## City of Chanhassen and City of ExcelsiorCity of Shorewood ## MM ## S An 8-foot shared-use path located behind the back of the curb and retaining walls to reduce wetland impacts, or a boardwalk separated from the roadway to minimize wetland impacts. 70–80% of traffic is northbound. e ee t Remove right turn lane on TH 7 and ability for vehicles to turn right and head southbound on Galpin Lake Road. •  H 7 to C ## Chaska RoOther Impr  anhasse ad to Gal ovem  ## Page 30 of 42 Page 56 of 79 Version 2: 7/27/2026   • Mill and overlay with spot street repairs• Sidewalk and trail improvements• Possibly add concrete curb and gutter on west side to accommodate sidewalk/trails• Spot utility repairs to watermain, sanitary sewer, and storm sewer where needed• Project led and administered by Shorewood   • Shorewood, Minnetonka, Chanhassen all utilizing Municipal State Aid Funds  • City of Shorewood: $1.4M – $2.3M• City of Minnetonka: $1.05M• City of Chanhassen: $90k  2025 2026 2027 2028 2029 ## Project ScopingFinal ## Design ŽŶƐƚƌƵĐƟŽŶ     • Pavement rating = 46/100• Street, sidewalk/trails, and drainage must meet Municipal State Aid Standards• Sidewalk/Trails: ◊ ADA compliance◊ Rehab current width, enlarge to 8-foot trails, include turf boulevard? » Wider trails and boulevards require easement acquisition ◊ Coordination between all cities on size, location, connectivity, and maintenance • On street bike accommodations• Underlying sanitary sewer and watermain are not due for replacement• Riley/Purgatory/Bluff Creek Watershed – project crosses Purgatory Creek• Future 2031 Vine Hill Road project from Delton Ave to Kingswood Terrace ◊ Led and administered by Minnetonka◊ Adding trail to east side◊ Add lighted pedestrian crossing at Kingswood Terrace      !"# $% ## W a t e r f o r d ## P l a c e ## N e a r ## M t n ## B o u l e v a r d ## C h a r t w e l l ## H i l l ## V a l l e y ## D r i v e ## H a n u s ## R o a d ## T r a p p e r s ## P a ss ## B a r r i n g t o n ## D r i v e ## P e n n i n g t o n ## A v e n u e ## C r e e k ## V i e w ## T r a i l ## B l u e b i r d ## L an e ## S p r i n g ## C r e s t ## D r i v e ## M u i r f i e l d ## C i r c l e ## V i n e ## R i d g e ## R o a d ## S w e e t w a t e r ## C u r v e ## S i l v e r ## L a k e ## T r a i l ## M c ## K i n l e y ## P l a c e ## C l e a r ## V i e w ## D r i v e ## S u n n y ## R o a d ## K i n g s w o o d ## T e r r a c e ## W a t e r f o r d ## P l a c e ## N e a r ## M t n ## B o u l e v a r d ## C h a r t w e l l ## H i l l ## V a l l e y ## D r i v e ## H a n u s ## R o a d ## T r a p p e r s ## P a ss ## B a r r i n g t o n ## D r i v e ## P e n n i n g t o n ## A v e n u e ## C r e e k ## V i e w ## T r a i l ## B l u e b i r d ## L an e ## S p r i n g ## C r e s t ## D r i v e ## M u i r f i e l d ## C i r c l e ## V i n e ## R i d g e ## R o a d ## S w e e t w a t e r ## C u r v e ## S i l v e r ## L a k e ## T r a i l ## M c ## K i n l e y ## P l a c e ## C l e a r ## V i e w ## D r i v e ## S u n n y ## R o a d ## K i n g s w o o d ## T e r r a c e ## C o v i n g t o n ## R o a d ## Covington Road ## O l d ## M a r k e t ## R o a d ## D e l l ## R oa d ## V i n eH i l l ## R o a d ## C h a n h a s s e n ## R o a d ## Ma n c h e s te r ## S tr ee t ## R e d ## C h e r r y ## L a n e ## M c ## K i n l e y ## C o u r t ## C a s c a d e ## P a s s ## C a s t l e ## R i d g e ## C o u r t ## T o w n l i n e ## R o a d ## C o v i n g t o n ## R o a d ## Covington Road ## O l d ## M a r k e t ## R o a d ## D e l l ## R oa d ## V i n eH i l l ## R o a d ## C h a n h a s s e n ## R o a d ## Ma n c h e s te r ## S tr ee t ## R e d ## C h e r r y ## L a n e ## M c ## K i n l e y ## C o u r t ## C a s c a d e ## P a s s ## C a s t l e ## R i d g e ## C o u r t ## T o w n l i n e ## R o a d 101 62 ## Silver Lake ## P u r g a t o r y ## C r e e k ## Silver Lake ## P u r g a t o r y ## C r e e k ## Park ## Silverwood ## Covington Park ## Park ## Silverwood ## Covington Park ## ShorewoodShorewood ## Minnetonka ## Minnetonka ## Chanhassen ## Chanhassen ## Eden Prairie ## Eden Prairie ## HENNEPIN COUNTYHENNEPIN COUNTY ## CARVER COUNTY ## CARVER COUNTY ## NN ee a rrr ## MM t n ## B ## SSS i ll vvvv l ee v rrr ## LLLLL aa kkkk e ## TTTTTT rrrr aa i l ## Legend 2029 Vine Hill Road Project2031 Vine Hill Road Project with Added Trail on East SideExisting Pedestrian Facilities ## ChanhassenEden PrairieShorewoodMinnetonka ## Lake ## Black ## Bay ## Park ## Bay ## Carman ## Minnetonka ## Lake ## Vi i i ## Lake ## Bay ## Carson ## Bay ## Albans ## St ## Lake ## Silver ## Minnetonka ## Lake ## Lake ## Christmas ## Deephaven ## Excelsior To n k a B a y ## Greenwood ## Shorewood ## Excelsior ## Greenwood ## Deephaven ## Tonka Bay ## Chanhassen ## Minnetonka ## Excelsior ## Greenwood ## Deephaven ## Tonka Bay ## Chanhassen ## Minnetonka ## SHOREWOODSHOREWOOD ## Potential Lighted ## Pedestrian Crossing ## Middle Leg of ## Purgatory Creek ## Challenging ADA ## Route Due to Existing Street Grade of 10% ## RRR oo a dd • ## City of City of City ## Page 31 of 42 Page 57 of 79 ## CAPITAL IMPROVEMENT ## Fund Mission This fund was established to account for various capital improvement public facilities projects that may be financed without the need to issue bonds. ## Fund Description/Services The Community Infrastructure Capital Fund provides for the accumulation of funds for acquisition, maintenance, and replacement of public facilities within the City. ## Revenue/Expenditures ## ProposedBudgetPercentage ## ActualActualBudgetBudgetChangeChange ## Description202420252026202720272027 ## REVENUES Taxes-$ -$ 50,000$ 230,000$ 180,000$ 360.00% Miscellaneous89,049 3,207 - - - Transfers In- - - - - ## TOTAL REVENUES89,049$ 3,207$ 50,000$ 230,000$ 180,000$ 360.00% ## EXPENDITURES Supplies-$ -$ -$ -$ -$ Other Services and Charges- - - 30,000 30,000 Capital Outlay88,158 - 245,000 200,000 (45,000) -18.37% ## TOTAL EXPENDITURES88,158$ -$ 245,000$ 230,000$ (15,000)$ -6.12% ## BEGINNING FUND BALANC ## E233,672$ 234,563$ 237,769$ 42,769$ -82.01% Net Change in Fund Balance891 3,207 (195,000) - ## ENDING FUND BALANCE234,563$ 237,769$ 42,769$ 42,769$ ## COMMUNITY INFRASTRUCTURE CAPITAL FUND (450) Page 32 of 42 Page 58 of 79 Page 33 of 42 Page 59 of 79 ## PROJECT SCOPE • Update outdated air exchange system and fans in the public works garage. • Upgrade the outdated heating units in the public works garage to a radiant heat system. • Construct an addition to the existing public works building along with renovating the existing building to include expanded office space, employee area and restroom/locker rooms. • Construct an addition to the existing public works equipment shop to include an additional mechanics bay. • Construct an addition to the existing public works building to include heated storage. ## FUNDING • Shorewood - General fund and enterprise utility funds. ## BUDGET/SCHEDULE • Air exchange system & fans (garage) – 2027: $200,000 • Radiant heat (garage) – 2028: $200,000 • Rehab floor (garage) – 2029: $192,000 • PW building addition & renovation – 2031: $1,384,500 • Mechanic’s bay – 2032: $520,000 • Heated storage – 2032: $162,500 ## ISSUES/OPPORTUNITIES • In 2023, the City conducted a public works facility study that showed a significant deficiency in office, work and storage space. • Since the original public works building was built, the department (fleet and personnel) has more than doubled in size. • The facility heating units and air exchange systems is original to the building and requires a compliance upgrade. • Garage heating is done through inefficient forced air units. ## 2027-2032 Public Works Facility Improvements ## Air Exchange Unit Sign area ## Forced Air Heating Unit ## Garage Area ## Mechanics Bay Page 34 of 42 Page 60 of 79 ## ENTERPRISE ## Fund Mission This fund is used to account for the activities of the City water system. To provide a safe, clean, uninterrupted supply of drinking water to all City residents connected to the municipal water system. ## Fund Description/Services The municipal water fund is responsible for operation and maintenance of six (6) well systems, including all pumps and well houses, maintenance of water towers, and extension of new water-main and construction of new water facilities, as necessary. This fund provides for the operation of the water system so that a continuous quality supply of water is furnished to customers at a reasonable cost. The water supply is maintained at proper pressure levels and bacteria free. Metering devices are also maintained to account for usage. The primary services provided by this fund are production and distribution of potable water for the residents, businesses, and institutions in the City of Shorewood. The distribution system also provides the general fire protection system (hydrants) for the City and is also responsible for City utility locates under the Gopher State One Call system. ## Fund Goals  Begin implementation of asset management system.  Continue to maintain current infrastructure, including valve exercising, water tower cleaning, hydrant flushing, etc.  Implement Council objectives to provide more fund sustainability.  Update wellhead protection plan. ## Fund Performance Measures ## Performance Measure 2024 ## Actual 2025 ## Actual 2026 ## Projected 2027 ## Estimated Exercise every valve once per year (% of valves) 20% 25% 25% 25% Minimize non-read water meters (each) 200-300 10 5 5 Fix watermain breaks w/ minimal disruption 5 6 9 5 ## Revenue/Expenses ## ProposedBudgetPercentage ## ActualActualBudgetBudgetChangeChange ## Description202420252026202720272027 ## REVENUES Utility Revenue763,277$ 932,550$ 1,160,502$ 1,279,860$ 119,358$ 10.29% Water Connection Fees85,300 91,950 90,618 50,000 (40,618) -44.82% Utility Permit Fees2,760 1,860 - - - Water Meter Sales16,438 8,775 10,000 10,000 - 0.00% Mis cellaneous Revenue104,971 191,474 10,200 260,000 249,800 2449.02% ## TOTAL REVENUES & OTHER ## FINANCING SOURCES972,747$ 1,226,610$ 1,271,320$ 1,599,860$ 328,540$ 25.84% ## EXPENSES Personnel Services361,313$ 343,868$ 357,220$ 365,280$ 8,060$ 2.26% Supplies114,692 99,605 132,900 132,800 (100) -0.08% Other Services and Charges596,575 278,176 867,000 951,000 84,000 9.69% Non-Operating133,399 180,195 1,030,490 280,531 (749,959) -72.78% TOTAL EXPENSES1,205,979$ 901,843$ 2,387,610$ 1,729,611$ (657,999)$ -27.56% ## BEGINNING NET POSITION7,677,961$ 7,444,728$ 7,769,494$ 6,653,204$ Change in Net Position(233,233) 324,766 (1,116,290) (129,751) ## ENDING NET POSITION7,444,728$ 7,769,494$ 6,653,204$ 6,523,453$ ## *Net Position includes Net Investment in Capital Ass ets ## WATER FUND (601) Page 35 of 42 Page 61 of 79 Page 36 of 42 Page 62 of 79 ## ENTERPRISE ## Fund Mission This fund is used to account for the activities of the City sanitary sewer system. ## Fund Description/Services The Sanitary Sewer Fund finances the operation and maintenance of the City’s wastewater collection, including fourteen sanitary sewer lift stations throughout the system. As well as cleaning, televising and repairing sewer mains to control inflow and infiltration. Sewage treatment is performed by Metropolitan Council Environmental Services (MCES) and is provided for in this area. ## Fund Goals  Begin implementation of asset management system.  Continue to maintain current infrastructure, including sewer cleaning, etc.  Begin maintenance and repair of sewer structures and castings to reduce I&I. ## Fund Performance Measures ## Performance Measure 2024 ## Actual 2025 ## Actual 2026 ## Projected 2027 ## Estimated Clean 20% of the sanitary sewer system 20% 20% 20% 20% Reconstruct, fix, or seal sanitary casting structure to improve I&I. ## N/A 122 8 70 Clean and televise 10% of sanitary sewer system outside of road accessible locations ## N/A 15% 10% 10% ## Revenue/Expenses ## ProposedBudgetPercentage ## ActualActualBudgetBudgetChangeChange ## Description202420252026202720272027 ## REVENUES Utility Revenue1,481,058$ 1,762,696$ 2,276,649$ 2,344,945$ 68,296$ 3.00% Sewer Connection Fees1,200 23,140 5,000 5,000 - 0.00% Utility Permit Fees120 - 1,000 1,000 - 0.00% Miscellaneous Revenue67,185 54,044 24,000 46,000 22,000 91.67% ## TOTAL REVENUES & OTHER FINANCING SOURCES1,549,563$ 1,839,880$ 2,306,649$ 2,396,945$ 90,296$ 3.91% ## EXPENSES Personnel Services309,284$ 288,645$ 301,135$ 308,335$ 7,200$ 2.39% Supplies18,660 10,487 17,200 16,800 (400) -2.33% MCES SAC Payables Charges1,076,772 1,074,424 1,200,217 1,179,366 (20,851) -1.74% Other Services and Charges253,504 131,799 280,300 331,300 51,000 18.19% Non-Operating95,073 120,011 291,990 292,365 375 0.13% TOTAL EXPENSES1,753,293$ 1,625,366$ 2,090,842$ 2,128,166$ 37,324$ 1.79% ## BEGINNING NET POSITION3,455,125$ 3,251,395$ 3,465,909$ 3,681,716$ Change in Net Position(203,730) 214,514 215,807 268,779 ## ENDING NET POSITION3,251,395$ 3,465,909$ 3,681,716$ 3,950,495$ ## *Net Position includes Net Investment in Capital Assets ## SANITARY SEWER FUND (611) Page 37 of 42 Page 63 of 79 Page 38 of 42 Page 64 of 79 ## ENTERPRISE ## Fund Mission This fund is used to account for the activities of the City Stormwater Management system. ## Fund Description/Services The Stormwater Management Fund is utilized to provide the operation, maintenance and repair of the stormwater conveyance system, including 14 miles of infrastructure, including catch basins, drainage ditches, and retention posts. As well as implementation of the city-wide Stormwater Pollution Prevention Program (SWPPP) for compliance with the NPDES Municipal Separate Storm Sewer System (MS4) permit program, which authorized the City to discharge stormwater runoff. Infrastructure and stormwater facilities are properly maintained to manage, convey, and treat stormwater runoff. In addition, infrastructure improvements are constructed and repaired as deemed necessary. ## Fund Goals  Begin implementation of asset management system.  Continue to manage existing stormwater features through maintenance activities, including pond cleaning, street sweeping, storm drain cleaning, etc.  Continue to be in compliance with federal, state and local agencies, including the city’s MS4 permit. ## Fund Performance Measures ## Performance Measure 2024 ## Actual 2025 ## Actual 2026 ## Projected 2027 ## Estimated Number of catch basins cleaned ## N/A 25 50 50 Provide communication related to stormwater quality & best management practices ## N/A 0 4 4-6 Inspect inlets & outlets of storm ponds. Clean as needed for proper functionality ## N/A N/A 20% 20% ## Revenue/Expenses ## ProposedBudgetPercentage ## ActualActualBudgetBudgetChangeChange ## Description202420252026202720272027 ## REVENUES Utility Revenue544,516$ 598,150$ 890,000$ 1,210,360$ 320,360$ 36.00% Franchise Fees324,387 - - - - Miscellaneous Revenue39,127 50,026 246,500 10,000 (236,500) -95.94% ## TOTAL REVENUES & OTHER ## FINANCING SOURCES908,030$ 648,175$ 1,136,500$ 1,220,360$ 83,860$ 7.38% ## EXPENSES Pers onnel Services85,757$ 85,145$ 96,580$ 98,420$ 1,840$ 1.91% Supplies7,776 7,226 9,800 9,550 (250) -2.55% Other Services and Charg es233,640 116,702 260,450 253,550 (6,900) -2.65% Non-Operating302,106 200,944 961,765 694,679 (267,086) -27.77% TOTAL EXPENSES629,279$ 410,017$ 1,328,595$ 1,056,199$ (272,396)$ -20.50% ## BEGINNING NET POSITION5,872,097$ 6,150,849$ 6,389,007$ 6,196,912$ Change in Net Position278,752 238,159 (192,095) 164,161 ## ENDING NET POSITION6,150,849$ 6,389,007$ 6,196,912$ 6,361,073$ *Net Pos ition includes Net Inves tment in Capital As s ets ## STORMWATER MANAGEMENT FUND (631) Page 39 of 42 Page 65 of 79 Page 40 of 42 Page 66 of 79 Version 2: 7/27/2026   • Channel capacity will be increased upstream and downstream of Noble Road by removal of sediment & clearing of trees/brush within the channel. Drainage and Utility Easements would be acquired from approximately four to seven properties.   • Shorewood  • City of Shorewood: ◊ Channel cleaning upstream and downstream of Noble Road = $266,000  2026 2027 2028 ## Project ScopingFinal ## Design ŽŶƐƚƌƵĐƟŽŶ     • The future Channel Stabilization project is not included in the proposed schedule or budget and is not currently identified in the Capital Improvement Plan. • Noble Road has a pavement rating of 58 out of 100 and is planned for milling and overlay. A watermain could be added in 10 to 15 years. • The project area is located within the Minnehaha Creek Watershed.• The Grant Lorenz Channel falls under the jurisdiction of the U.S. Army Corps of Engineers. Significant impacts, such as hard armoring, channel widening, or realignment, will require 12 to 18 months for permitting. Smaller impacts, including bioengineered stabilization and limited sediment removal, will require approximately six months for permitting. • Large wetlands in the area are under the jurisdiction of the Minnesota Department of Natural Resources (MnDNR). • Channel widening would affect approximately four to seven properties, while the future Channel Stabilization project will impact five properties. Drainage and Utility Easement acquisition will be required for nine to twelve properties. • For the future Channel Stabilization project, properties adjacent to Grant Lorenz Road can be addressed individually and do not require cooperation from neighboring parcels. • Increasing stream capacity will require cooperation from all neighboring property owners to be successful.      !  " #  $%&$ !' ## E u r e k a ## R o a d ## B i r c h ## B l uf f ## R o ad ## V a l l e y ## W o o d ## L ane ## N o b l e ## R o a d ## E d g e w o o d ## R o a d ## Gr a n t ## L o re n z ## R oa d ## O ak ## L e a f ## T r ail ## S t r aw b e r r y ## L a ne ## C athca rt ## Drive ## W i l d r o s e ## L a n e ## M ## P a r k ## L a n e ## E u r e k a ## R o a d ## B i r c h ## B l uf f ## R o ad ## V a l l e y ## W o o d ## L ane ## N o b l e ## R o a d ## E d g e w o o d ## R o a d ## Gr a n t ## L o re n z ## R oa d ## O ak ## L e a f ## T r ail ## S t r aw b e r r y ## L a ne ## C athca rt ## Drive ## W i l d r o s e ## L a n e ## M ## P a r k ## L a n e ## Lake MinnetonkaLake Minnetonka ## Smithtown Ponds ## Smithtown Ponds ## S m i t h t o w n ## R o ad ## E ur e k a ## R o a d ## S m i t h t o w n ## R o ad ## E ur e k a ## R o a d ## Freeman ParkFreeman Park ## Lake Minnetonka LRT Regional TrailLake Minnetonka LRT Regional Trail ## School ## Elementary ## Minnewashta ## School ## Elementary ## Minnewashta ## HENNEPIN COUNTYHENNEPIN COUNTY ## Legend ## Currently Slated for Mill and OverlayStream Channel ## Furture Channel StabilizationIncrease Stream Capacity ## City Owned ParcelParcels that Require Permanent EasementsCity of Shorewood ## Lake ## Black ## Bay ## Park ## Bay ## Carman ## Minnetonka ## Lake ## Vi i i ## Lake ## Bay ## Carson ## Bay ## Albans ## St ## Lake ## Silver ## Minnetonka ## Lake ## Lake ## Christmas ## Deephaven ## Excelsior To n k a B a y ## Greenwood ## Shorewood ## Excelsior ## Greenwood ## Deephaven ## Tonka Bay ## Chanhassen ## Minnetonka ## Excelsior ## Greenwood ## Deephaven ## Tonka Bay ## Chanhassen ## Minnetonka ## SHOREWOODSHOREWOOD Currently slated for mill and overlay. Roadway underwater during 100-year events. Wetland under MnDNR jurisdiction. Future channel stabilization: To control erosion, add vegetation, rock riffles, or hard armoring. Acquire Drainage and Utility Easements from five properties. Grant Lorenz Channel is under the Army Corps of Engineers jurisdiction. ## WWW i ll dd rr oo ss e ## LLLL a n Replace and/or clean culvert under Grant Lorenz Road. ## WWW ooo o Replace and/or clean culvertRe /or clean cu place and ## R ll ## RR uu ## WWW ## VVVVVVV a ll ll ee yyyyyyyyy ## WWWW Roadway underwater during 10-year and 100-year events; frequent ice buildup during spring thaw. Currently slated for mill & overlay. Water could be added in 10-15 years. Increase stream capacity: Excavate to a natural channel and secure Drainage and Utility Easements from 4–7 properties. ontrol tro nnt t nn s ## Project S inal ## ŽŶƐƚ ## Page 41 of 42 Page 67 of 79 Version 2: 7/27/2026   • Greenwood has initiated planning for improvements to Manor Road from Excelsior Boulevard to St. Albans Bay Road and has proposed pavement reclamation • Shorewood is reviewing potential drainage improvements on its side of the roadway, and range from improving the existing bituminous flume or adding curb and gutter and storm sewer.   • City of Greenwood • City of Shorewood  • Greenwood = $150,000• Shorewood = $500,000 ($350,000 Storm Sewer, $150,000 Roadway)         2025 2026 2027 2028 ## ScopingDe s ign ŽŶƐƚƌƵĐƟŽŶ     • Manor Road only serves one Shorewood resident’s driveway.• There have not been drainage related complaints in the area, but staff see the project as an opportunity to improve drainage so that it requires less maintenance. Currently, the bituminous swale fills with leaves and sediment where water sheet flows over the roadway. A new storm sewer outlet to the lake/wetland could potentially be added through a parcel of land owned by Greenwood. • According to the 2025 Pavement Management Plan, Manor Road has a Pavement Condition Score of 91%, requires high maintenance, and has high road use. Greenwood is planning to complete soil borings in the fall of 2025 which will provide better insight on reclamation versus mill and overlay.     !" ## B a r r i n g t o n ## W a y ## O a k ## L a n e ## S t ## A l b a n s ## G r e e n ## B a r r i n g t o n ## W a y ## O a k ## L a n e ## S t ## A l b a n s ## G r e e n ## Manor ParkManor Park ## Saint Albans Bay ## Saint Albans Bay ## M an o r ## R o a d ## S t ## A lb a n s ## B a y ## R o a d ## M a n or ## Ro a d ## E x c e lsi or ## Boul evard ## S t ## A l b a n s ## B a y ## R o a d ## Ch an nel ## Dr iv e ## Suburba n Drive ## M an o r ## R o a d ## S t ## A lb a n s ## B a y ## R o a d ## M a n or ## Ro a d ## E x c e lsi or ## Boul evard ## S t ## A l b a n s ## B a y ## R o a d ## Ch an nel ## Dr iv e ## Suburba n Drive 7 ## Greenwood ## Shorewood ## Greenwood ## Shorewood ## Lake ## Black ## Bay ## Park ## Bay ## Carman ## Minnetonka ## Lake ## Vi i i ## Lake ## Bay ## Carson ## Bay ## Albans ## St ## Lake ## Silver ## Minnetonka ## Lake ## Lake ## Christmas ## Deephaven ## Excelsior ## Tonka Bay ## Greenwood ## Shorewood ## Excelsior ## Greenwood ## Deephaven ## Tonka Bay ## Chanhassen ## Minnetonka ## Excelsior ## Greenwood ## Deephaven ## Tonka Bay ## Chanhassen ## Minnetonka ## SHOREWOODSHOREWOOD ## AAAAAA ll bb ## Legend ## City of Chanhassen and City of GreenwoodCity of Shorewood Proposed Curb and Gutter with Minimal Storm SewerProject Location Proposed Storm Sewer Outlet ## Wetlands  ## GreenwShorew  ## Page 42 of 42 Page 68 of 79 1 ## Jeanne Schmuck ## From:noreply@civicplus.com Sent:Sunday, July 26, 2026 12:44 PM ## To:Jeanne Schmuck; Jake Griffiths ## Subject:Online Form Submittal: 2027 City Budget Feedback ## Follow Up Flag:Follow up ## Flag Status:Flagged ## 2027 City Budget Feedback ## Help Shape Shorewood’s Budget Priorities The City of Shorewood is developing its upcoming budget, and we want to hear from you. Your feedback helps City leadership understand community priorities and make informed decisions about services, infrastructure, and investments. Your input will be reviewed and considered as part of the budget planning process.  Share what matters most to you  Suggest areas for investment or cost savings  Help guide future city services Thank you for taking the time to share your perspective and help shape Shorewood’s future. Tell us your priorities, ideas, and feedback to help guide Shorewood’s budget decisions. I'm reading the proposed budget documents for the July 27 council work session and meeting. A 10+% increase is unacceptable! Particularly when the year has no planned major projects. I will mention a few improvements that seem to me to be absolutely insane - $350,000 for playground equipment at Freeman (and future ones for other parks). Review the needs, get reasonable plans and reasonable bids. If it isn't broke, don't fix or replace it. $200,000 for a water connection program? What for? Marketing, staff, ?? Your program to increase connections is a joke because you don't have the ability to be consistent in your Page 69 of 79 2 connection policy. Case in point - Mill Street. Should have had the courage to put it in and assess the residents accordingly. They can never hook up unless there is water nearby and then only a few. But eventually they all will. Play the long game and take some PR hits. I see in several of the enterprise funds previous years' budget vs actual expenses an item called "non operating expenditures". What is that for? In several budgets the number is so large that it makes the bottomline red or black by a large amount. The Mayor and Council need to dig into the details and not just accept what the staff is presenting. Sudden surprise numbers and % increases are suspicious. SLPD needs another officer? Based on what data? Their budgets are increasing far too much! My fundamental question is what actually happened in the 2025 budget? How did the it play out? Red or Black? How is 2026 going so far with the same questions? Are you actually reviewing and seeing if the budgets are being followed or are they too conservative in the sense of asking for more and spending much less. Would you like to be contacted about your feedback? ## No If yes, please include your name and contact information: Field not completed. Email not displaying correctly? View it in your browser. To help protect y our priv acy , Micro so ft ## Office prev ented auto matic download of this pictu re from the In ternet. Page 70 of 79 City Council Work Session Item 2.B. ## Title/Subject: Reserve Policy Overview ## Meeting Date: August 10, 2026 ## Prepared By: ## Attachments 1. Reserves Policy 2025 ## Background At the July 27th Budget Work Session, Council had questions about the City's reserve policy. This memo is intended to provide background information on the City's reserve policy and explain the reasoning behind it. In 2025, during the Annual City Council Retreat, the City Council directed Staff to revise the ## January 2019 Fund Balance Policy. During the March 10 th ## Council Work Session, Staff proposed utilizing a financial advisory firm to develop a long-term financial management plan for the City’s funds which included utility rate studies, and Staff was directed to proceed. At the March 24, 2025, Council Work Session, Staff sought direction on financial items such as fund balance policies, utility rate structures, fees, conservation rates, franchise fee allocations, etc. This was in alignment with the 2025 Strategic Priorities and Work Plan goal ‘to establish policies and practices that support strategic direction to ensure sustainability within the various City funds’. During the work session, a review of existing policy/practice was discussed. Council provided specific direction on assumptions to be made within the long-term financial management plan. These directions were then drafted into policy. In April 2025, Staff brought forward, and the Council adopted the most current Reserve Policy which is attached. Maintaining reserves is important to ensure long-term economic stability by providing sufficient funds for cash flow requirements and contingency needs because major revenues, including property taxes and other government aid, are received semi-annually. Beyond cash flow needs is also the need of saving for projects and responding to emergencies or opportunities. Strong reserves also support favorable bond ratings which means that a City will get lower interest rates when borrowing money. The revised policy now includes the Special Revenue Funds to capture the Shorewood Community and Event Center, as well as the Local Fiscal Recovery Fund ARPA. An additional section has also been created for Enterprise Fund reserves to provide adequate working capital. The reserve policy further addresses the balances to be maintained, as well as assist in retaining an adequate level of funds for all City funds to provide for cash flow requirements and contingency needs. The policy also established specific guidelines the City of Shorewood will use to classify fund balances into categories based primarily on the extent to which the City is bound to honor constraints on the specific purposes for which amount in those funds can be Page 71 of 79 spent, in accordance with GASB 54. The policies align with the best practices established by Government Finance Officers Association, MN Office of the State Auditors, as well as League of MN Cities. The reserve policy is broken down as follows: The General Fund and Special Revenue Funds utilize a calculation with unrestricted fund balance. • The General Fund utilizes a percentage of 35% - 50% unrestricted fund balance with next year's budgeted expenditures and transfers. The previous policy set the balance at "not less than 60%." • Special Revenue Funds utilize a calculation of 50% of the subsequent budget and 100% of subsequent capital expenditures, plus additional savings for future capital projects. Further discussion was that the Shorewood Community and Event Center fund should be 70% self-sufficient plus a supplemental operating levy. Capital Funds utilize the 10-year CIP to ensure sufficient reserves based on the rolling needs. • Capital Funds are to have sufficiency for a rolling three-year CIP adjusted. Enterprise Funds need to ensure revenue sufficiency to meet the cash needs of the fund. • Enterprise Funds are to have balanced budgets, 50% of subsequent year's expenses, 100% of both the subsequent year capital and debt service needs, as well as future capital improvements. Financing for a connection program is to be included based on discussion but not memorialized in the policy. The policy states that these reserves are to be monitored annually. This calculation and annual review will be part of the ongoing generation of the long-term financial management plan. The term "reserves" tends to be used loosely and often without understanding of government finance policies and practices. The Reserve Policy includes different classifications for funds (Section II Classifications of Fund Balance) that include Nonspendable, Restricted, Committed, Assigned, and Unassigned, as well as similar classifications for capital funds (Section V Enterprise Fund Reserves of Net Investment in Capital Assets) that include Restricted and Unrestricted. The City’s cash balance is approximately $14 million at year-end and dropped below $10 million prior to receiving property tax payments from the County. Although that is an all-inclusive 'cash balance', those funds have certain restrictions based on those classifications in accordance with accounting principles generally accepted in the United States of America (GAAP) as established by the Governmental Accounting Standards Board (GASB) and the requirements of the Office of the Minnesota State Auditor. ## Strategic Alignment ## Fiscal Responsibility • Align City policies and practices with strategic direction • Implement best practices to support sound financial management • Maintain stable and predictable finances over the long-term Page 72 of 79 ## Functionally & Financially Sound Infrastructure • Define standards and goals for infrastructure development • Plans to finance infrastructure improvements, maintenance, and replacement ## Discussion Requested This memorandum is provided for Council information. No action or direction is requested. Council may discuss or ask questions. Page 73 of 79 ## CITY OF SHOREWOOD, MN ## RESERVE POLICY Adopted September 10, 2007 Revised January 14, 2019 Revised April 14, 2025 ## I. PURPOSE The purpose of this policy is to establish specific guidelines the City of Shorewood will use to maintain an adequate level of fund balance and reserves to provide for cash flow requirements and contingency needs, as well as provide adequate working capital for current operating needs to avoid short-term borrowing. In establishing an appropriate reserve level, the City needs to consider the cash flow, capital asset purchases, need for emergency reserves, ability to manage fluctuations of major revenue sources, credit rating, and long-term fiscal health. ## II. CLASSIFICATION OF FUND BALANCE/PROCEDURES 1. Fund balances in governmental funds (versus enterprise or utility funds) are reported in classifications that disclose constraints for which amounts in those funds can be spent. The fund balance classifications are: Nonspendable • This category includes fund balance that cannot be spent because it is either (a) not in spendable form or (b) is legally or contractually required to be maintained intact. Examples include inventories and prepaid amounts. 2. Restricted • Fund balance should be reported as restricted when constraints placed on those resources are either (a) externally imposed by creditors, grantors, contributors, or laws or regulations of other governments or (b) imposed by law through constitutional provisions or enabling legislation. 3. Committed • Fund balance that can only be used for specific purposes pursuant to constraints imposed by formal action of the government’s highest level of decision-making authority. The committed amounts cannot be used for any other purpose unless Page 74 of 79 the government removes or changes the specified use by taking the same type of action it employed to commit those amounts. • The City’s highest level of decision-making authority (City Council) will annually or as deemed necessary commit specific revenue sources for specified purposes by resolution. This formal action must occur prior to the end of the reporting period, however, the amount to be subject to the constraint, may be determined in the subsequent period. • To remove the constraint on specified use of committed resources the City Council shall pass a resolution. 4. Assigned • Amounts that are constrained by the government’s intent to use for specified purposes, but are neither restricted nor committed. Assigned fund balance includes amounts that are intended to be used for specific purposes. • The City Council has delegated the authority to assign and remove assignments of fund balance amounts for specified purposes to the City Administrator. 5. Unassigned • Unassigned fund balance represents the residual classification for the Funds. Includes amounts that have not been assigned to other funds and that have not been restricted, committed, or assigned to specific purposes within the Funds. ## III. AUTHORIZATION AND USE OF FUND BALANCE The City Council authorizes the Finance Director and/or City Administrator to assign fund balance that reflects the City’s intended use of the specified funds. When both restricted and unrestricted (committed, assigned, or unassigned) resources are available for use, it is the City’s policy to use restricted resources first, then use unrestricted resources as needed. When unrestricted resources are available for use, it is the City’s policy to use resources in the following order: 1) committed, 2) assigned, 3) unassigned. The exception to this is the Park Improvement Fund, where resources are used in the following order: 1) assigned, 2) committed, and 3) restricted. Committed fund balance items must be set in place prior to year-end, but the amount can be calculated after year-end. ## IV. FUND BALANCE POLICIES FOR FUND TYPES Page 75 of 79 ## 1. General Fund The General Fund is established to account for all revenues and expenditures which are not required to be accounted for in other funds. Revenue sources include property taxes; license and permit fees; fines and forfeits; charges for services; intergovernmental revenues; investment earnings; and transfers in. The General Fund’s resources finance a wide range of functions, including the operations of general government, public safety, public works, community development, and park and recreations. • The City’s goal will be to maintain an end-of-year unassigned fund balance in the General Fund of an amount between 35% and 50% of the next year’s budgeted expenditures and transfers out of the General Fund. This will assist in maintaining an adequate level of fund balance to provide for cash flow requirements and contingency needs because major revenues, including property taxes and other government aids, are received approximately semi- annually. • The City may assign fund balance in the General Fund for purchase order encumbrances, budget carryovers, compensated absences, or other items. • The City may commit fund balance in the General Fund for revenue stabilization arrangements or other items by City Council resolution. • If unassigned fund balance in the General Fund at the completion of any fiscal year exceeds 50% of the next year’s budgeted expenditures and transfers out of the General Fund, the excess may be used for specific projects, capital acquisitions and improvements, transfers to other funds, or for other purposes determined by the City Administrator and/or Finance Director. • Unassigned fund balance can be “spent down” if there is an anticipated budget shortfall (expenditures and other uses in excess of revenues and other sources). • If spending unassigned fund balance in designated circumstances has reduced unassigned fund balance at the completion of any fiscal year to a point below the minimum targeted level, as noted above, the replenishment will be funded by property taxes or other sources within one year, or as directed by the City Council. ## 2. Special Revenue Funds Page 76 of 79 Special Revenue Funds are used to account for and report the proceeds of specific revenue sources that are restricted or committed to expenditures for specified purposes other than debt service or capital projects. The City will maintain fund balances in special revenue funds at a level which will avoid interfund loans to meet the cash flow needs of the current operating budget. Governmental accounting standards require that substantial inflows of revenues into a special revenue fund be either restricted or committed in order for the fund to be considered a special revenue fund. The specific revenue sources for each special revenue fund and the specific purpose for which they are restricted or committed are as follows, less any amounts that are classified as nonspendable by their nature: a) Shorewood Community and Event Center Fund specifies 100% of Fund Balance as Committed for operating and capital costs associated with the Shorewood Community and Event Center. b) Local Fiscal Recovery Fund ARPA Fund specifies 100% of Fund Balance as Restricted for Federal grant expenditures. ## 3. Debt Service Funds Debt service fund balances are typically considered restricted. Fund balance may be assigned if the debt for the fund has been fully paid. The resources being accumulated in the funds are for payments of principal and interest maturing in current and future years. At year end, fund balance in each Debt Service Fund shall be at a minimum level of 100% of the debt service expense expected to be paid during the subsequent fiscal year. ## 4. Capital Project Funds Capital project fund balances are considered restricted or assigned. The resources being accumulated are for current and future projects. Capital project funds are used to account for and report financial resources that are restricted or assigned to expenditures for capital assets. The fund balances in these funds vary annually based on the timing of acquisitions, construction projects, and bond issuance. The City will maintain reserves in the Capital Project Funds at a minimum level sufficient to provide adequate working capital for the subsequent years’ expenditures needs. The maximum amount of reserves should include the amount necessary to pay for future Page 77 of 79 capital projects. Future capital projects must be identified and quantified in the Capital Improvement Plan. ## V. ENTERPRISE FUND RESERVES The City will maintain reserves in the Enterprise Funds at a minimum level sufficient to provide adequate working capital for current expenditure needs. Generally, the City shall strive for a minimum of six (6) months of subsequent years’ operating needs, as well as 100% of subsequent years’ capital and debt service needs. The maximum amount of reserves should include the amount necessary to pay for future capital projects. Future capital projects must be identified and quantified in the Capital Improvement Plan. Rates and fees in these funds will be analyzed annually for a five- year period to provide for level rate changes. Enterprise Fund net position (equity) will be classified in one of the following categories: 1. Net Investment in Capital Assets – The components of net position, which is the difference between the assets and deferred outflows of resources and the liabilities and deferred inflows of resources, that consist of capital assts less both accumulated depreciation and the outstanding balance of debt that is directly attributable to the acquisition, construction, or improvement of the capital asset. 2. Restricted – The component of net position that consists of assets with constraints placed on their use by either external parties or through constitutional provisions or enabling legislation. 3. Unrestricted – The net amount of the assets, deferred outflows of resources, liabilities, and deferred inflows of resources that are not included in the determination of net investment in capital assets or the restricted components of net position. ## VI. STABILIZATION ARRANGEMENTS Stabilization arrangements are defined as formally setting aside amounts for use in emergency situations or when revenue shortages or budgetary imbalances arise. The City will set aside amounts by resolution as deemed necessary that can only be expended when certain specific circumstances exist. The resolution will identify and describe the specific circumstances under which a need for stabilization arises. The need for stabilization will only be utilized for situations that are not expected to occur routinely. Page 78 of 79 ## VII. MONITORING AND REPORTING The Finance Director shall annually prepare the status of fund balances in relation to this policy and present it to the City Council in conjunction with the development of the annual budget. Page 79 of 79