Lake Elmo enacts moratorium after White Bear Lake ruling limits water supply

Mary Divine, Pioneer Press
·7 min read

Terry Emerson has worked for years and spent more than $2.7 million to ready 53 acres of land at the northwest corner of Interstate 94 and Manning Avenue in Lake Elmo for development.

Emerson, the owner of EN Properties, expected to submit plans for a commercial and light-industrial development to the city for approval this spring. Now, he’s likely going to have to wait at least another year.

The Lake Elmo City Council on April 5 enacted a moratorium on new plats in a section of the southern part of the city because of concerns about the city’s water supply. The one-year moratorium puts a halt on new plats — for both residential and commercial developments — in an area of the city located between Keats Avenue, Manning Avenue, Interstate 94 and the Union Pacific Railroad tracks in the city’s Old Village area.

City officials say they had no choice but to enact the moratorium after the city’s request to the Minnesota Department of Natural Resources for an amendment to its water appropriations permit was denied in May 2021. City officials applied for the amendment to increase the city’s allowed water usage due to rapid growth — 1,400 new houses, 300 new apartment units and numerous businesses — over the last five years, said City Administrator Kristina Handt.

But DNR officials, citing a court order regarding the water levels of White Bear Lake, denied the city’s request.

That court order, issued in 2017 by Ramsey County District Judge Margaret Marrinan following a trial, effectively prohibits the DNR from issuing new or expanded groundwater pumping permits within five miles of the lake. It also raised the specter of future water restrictions and seemed to set a path toward many communities switching to surface water supplies, probably from the Mississippi River.

Part of Lake Elmo is within a five-mile radius of White Bear Lake, and that means the entire city is impacted by the water restriction “because there is one permit for the entire water system,” Handt said.

‘THIS DOESN’T JUST AFFECT LAKE ELMO’

Emerson says his development plans were caught in the crosshairs of competing state agencies. In 2005, the Minnesota Supreme Court ruled that the Metropolitan Council could require Lake Elmo to accommodate thousands of new homes. As a consequence, the city is now among the fastest growing in the east metro.

“You’ve got the Met Council telling Lake Elmo that they have to develop and add density, and you’ve got another state agency — the DNR — saying that you can’t have water,” Emerson said. “The two are just going against each other, and it’s just a mess. The more you look at it, none of it makes sense.”

Mayor Charles Cadenhead said the city is trying to abide by the Met Council’s growth requirements and provide for the public health and safety of its residents.

“We’re caught between the Met Council requiring us to grow and this court ruling telling us we can only have so much water,” Cadenhead said. “This doesn’t just affect Lake Elmo, it’s Hugo, Oakdale, Maplewood, White Bear Lake, any place with wells within five miles of White Bear Lake.”

Also at issue: Lake Elmo’s groundwater in the southern two-thirds of the city has been contaminated by perfluoroalkyl and polyfluoroalkyl substances, or PFAS, which don’t break down in nature and have been linked to cancer and fertility issues. The “forever chemicals,” which 3M Co. developed decades ago for use in products like non-stick pans, contaminated groundwater in southern Washington County.

“We got kind of the double whammy,” Cadenhead said. “Our clean water is at the north end of our city, but that falls within the five-mile radius of the shoreline.”

MORATORIUM HALTS DEVELOPMENT

Lake Elmo is the first city to have its appropriation permit denied as a direct result of the court order. Other municipalities affected by the court order are watching closely.

“Lake Elmo is ahead of the rest of us,” said Bryan Bear, Hugo’s city administrator. “We are closely following this issue, but as of now, Hugo is not considering a moratorium.”

The moratorium in Lake Elmo will halt progress on nearly 800 residential units and “hundreds of thousands of square feet of new commercial, business and warehouse space,” Handt said.

“We really have our hands tied,” she said. “We are under conflicting directives from the state agencies, as well as the state courts. In both cases, the city of Lake Elmo did not want to grow. We fought that all the way to the Supreme Court, lost, and now, with water issues, the DNR is under this court order, and there are not any other solutions.”

The court order required the DNR to set a collective annual withdrawal limit for White Bear Lake and to adjust its permits accordingly, said Jess Richards, the agency’s assistant commissioner.

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After extensive groundwater modeling work, DNR officials determined that to implement the court order through permit modifications only, groundwater use within five miles of the lake would need to be limited to 55 gallons per person per day for domestic use only and that all other groundwater uses — commercial, institutional, industrial and agricultural — would need to be terminated. There are other options for reducing groundwater use in the vicinity of White Bear Lake, such as some communities moving to a surface water source, Richards said.

The DNR and the Minnesota Attorney General’s Office sent a letter informing the court of the findings and “the significant impact such reductions would have on the affected communities,” Richards said. In response, the judge has scheduled a hearing for April 26, he said.

DNR officials also plan to provide a copy of Lake Elmo’s moratorium to the court, he said.

“We are committed to continuing our work with local communities, legislators, the plaintiffs and the court to find a path forward to ensure the protection of White Bear Lake and to ensure all communities have an adequate and safe public water supply,” Richards said.

Because there is no surface water source — like the Mississippi River or the St. Croix River — in Lake Elmo and because of the city’s issues with PFAS contamination, city officials are turning to the Minnesota Legislature for help, Cadenhead said.

“Without action by our state elected officials, we have no option but to look for ways to limit demand to this vital resource for communities,” he said.

HOUSLEY LEGISLATION

A bill authored by state Sen. Karin Housley, R-Stillwater, would require the DNR to approve permit amendment requests for appropriations and new wells from communities within five miles of White Bear Lake provided that request is consistent with a DNR-approved water-supply plan prior to 2021.

“Most communities updated their water-supply plans in conjunction with the 2040 comprehensive plans in 2020 to ensure proper infrastructure planning that aligns with the community’s growth plan through 2040,” Handt said.

The measure is in the Senate’s environmental omnibus bill, but it is not in the companion bill in the House; city officials are hoping a solution will be found during conference committee, she said.

“Folks aren’t really understanding the impact,” Handt said. “Lake Elmo is really out ahead of the other 10 communities that have had their permits amended because of our fast growth rate. Eventually, they may all be in the same position.”

Opposition to the bill has come from local environmental groups, including the Minnesota Center for Environmental Advocacy. MCEA officials say it would undermine Minnesotans’ right to file lawsuits to protect water and other natural resources from pollution by creating an exception to the Minnesota Environmental Rights Act “in an attempt to prevent reductions to water pumping permits that may affect the water level of White Bear Lake.”

“It’s bad policy,” said Andrea Lovoll, MCEA’s legislative coordinator. “This bill does not solve the problem of unsustainable water appropriation permits. Instead, it would allow these permits to continue for 20 years without the ability to challenge them in court.”

Handt said the bill is not intended to harm the environment.

“Cities aren’t doing this to harm White Bear Lake,” Handt said. “We’re doing this to provide for the livelihoods of our communities.”

Emerson, the developer, said he hopes the city will allow him to move forward with preliminary plat approval and construction this year, so that once the moratorium is lifted and city water is available, a certificate of occupancy can be issued.

“I’ve owned this land for over 25 years,” Emerson said. “I expected it to be developed a long time ago. When I bought it, the city administrator at that time said it would be five years, and then things would be rolling. Well, it’s been a lot longer than five years. I’m not getting any younger.”

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