Shorewood City Council approved the final 2025 City Budget at the December 9, 2024 City Council Meeting. The 2025 budget includes a net tax levy certification for taxes payable in 2025 in the amount of $7,593,570. This amount is an increase of $478,296 over last year’s certified net tax levy which equates to a 6.7% increase in tax. The 2025 levy is estimated to result in an increase for the average homeowners’ taxes in 2025 of $7, or 0.8% (for no change in assessed value). The City’s tax base value is expected to increase approximately 3.4% including existing value increases and new construction. This would equate to an increase in the estimated City Tax Rate from 22.359 to 23.072 which is an increase of 0.714 in the estimated tax rate.
The general fund reflects a projected revenue stream of $7,385,220 which reflects an increase of 15.8% over the projected 2024 revenue stream. The 2025 General Fund Budget is funded primarily from ad valorem taxes (property taxes in proportion to the value). The General Fund operating expenditures are expected to increase 15.8% in 2025 to $7,385,220. This includes two one-time transfers totaling $550,000 for capital activity. Operating activity increased 7.1% over the 2024 General Fund budget.
The City’s special revenue fund is the Shorewood Community and Event Center. The levy support for this fund has a levy increase of $17,000 to create a balanced budget with 66% levy support. This budget reflects an increase of $12,893, which is mainly personnel costs of $17,096, and capital outlay is reflected at $21,000.
Debt service funds are used for the collection of ad valorem taxes and revenues from other sources for the payment of principal, interest and fiscal agent fees of general obligation bonds. The debt service levy is proposed at $1,095,957. This is an increase of $107,695 from 2024 fiscal year.
Capital Project Funds include the Park Improvement Fund, the Equipment Replacement Capital Fund, the Street Improvement Projects Fund, and the Municipal State Aid Street Improvement Fund. Budgeted expenditures for these funds are detailed and included in the 2025-2034 Capital Improvement Plan. The Park Improvement Fund budget includes a $150,000 transfer in 2025 as well as a Property Tax Levy increase of $7,000 for 2025. The Equipment Replacement Capital Fund budget includes a transfer of $400,000 and the Property Tax Levy increase of $37,000 in 2025. The Street Improvement Capital Fund is supported by Property Tax Levy, Municipal State Aid (MSA) Funds, and Bond Proceeds. The 2025 CIP reflects $798,000 in street projects to be funded through the Street Improvement Fund. The property tax levy of $170,500 is 55% of the $310,000 pavement maintenance.
The Municipal State Aid (MSA) Street Improvement Capital Fund is supported by the MSA Street program and is administered through the State of Minnesota’s Department of Transportation. There are two projects within the CIP that qualify for the utilization of MSA dollars. There is 10% of the Eureka Road project that does not meet the criteria for MSA dollars as some drainage and work outside of the right-of-way does not qualify for this funding. The Mill Street Trail ROW project led by the County will also qualify for this funding in 2025.
Annually, the City Council will adopt the 10-year Capital Improvement Plan (CIP). The CIP lists major capital improvements, and the sources to pay for them. Items in the CIP are not mandated, and the Council reviews capital spending throughout the year. The CIP provides an estimation of the timing and cost of future projects. The CIP includes activity of the SCEC, capital project funds, and enterprise funds activity. There are $3,963,500 projects for 2025 and a total of $31,228,910 for projects across the five years.
Enterprise Funds include the Water, Sanitary Sewer, Stormwater Management, and Recycling funds. Included within these budgets are capital expenses to fund the utility portion of street projects, and other utility infrastructure projects. These improvement projects are detailed in the 2025-2034 Capital Improvement Plan. The Enterprise Funds reflect increases in personnel costs related to COLA, wage steps, and health insurance benefits. The Water Fund has planned increases in the base rates and consumption rates included in 2025. The water rates have a projected need to increase the base fee by 10.0%, $7.94 per quarter for the average residential customer. The sanitary sewer rate will increase by 16%, or $19.78 per quarter. Stormwater rates are to increase 8%, or $3.22 per quarter. The 2025 rate would be $43.49 per REF. These increases are needed to assist with the cost of additional regulations for water quality for stormwater systems imposed by the State of Minnesota. A $2 rate increase in Recycling fees will offset the 15% increase in recycling/organic contractual services.
More detailed information and supporting documents and charts can be found online at shorewoodmn.gov/citybudget.