Resolution authorizing the use of City funds to replace private Lead and Galvanized service lines. 

Adoption of the attached resolution. 

In accordance with Federal law, the City of Mankato is actively planning for the replacement of all private lead and galvanized water service lines throughout the community. Current regulations require all lead and galvanized water service lines to be replaced by 2037. Over the past several years, staff have worked to compile a comprehensive inventory of private water service line materials. While substantial progress has been made, full cooperation from all property owners has not yet been achieved. Of the approximately 10,500 services in the City, approximately 200 have been identified to be lead or galvanized.  Approximately 3,000 are still unknown. In Mankato, property owners own and are ultimately responsible for operation, maintenance and eventual replacement of their water service – including the replacement of lead and galvanized services.

The State of Minnesota has pledged to provide funding to municipalities to replace non-complying service lines through an annual grant program. The City intends to utilize State-provided funding to cover the cost of private service replacements to the extent such funding is available. This outside funding would provide significant relief to Mankato property owners that have lead and galvanized service lines. In 2026, the City applied for and received $1,000,000 as an initial grant toward the City’s overall replacement needs. The State's current program objective is to fund 100 percent of eligible lead and galvanized service line replacements, eliminating direct costs to property owners.

Phase 1 of the City's replacement program, utilizing 2026 grant funding, is a project to replace non-conforming services within the West Mankato area, extending into the James Avenue and Mound Avenue neighborhoods as funding permits. Under current State requirements, grant funding is restricted to this identified project area. It is the City’s intention to apply annually for State funding and to apply awarded funding toward identified project areas – thus systematically replacing lead and galvanized services at no homeowner cost. 

A potential inequity exists when lead/galvanized service lines require replacement outside the State-approved project area. These situations may occur when:

• A leaking lead service line is discovered and requires immediate replacement.
• A lead service line is identified and replaced as part of a street reconstruction project.
• A sanitary service line is condemned by the Plumbing Inspector, necessitating replacement work, and the lead/galvanize water service is required to be replaced.
• Replacement is required outside the project window and between funding cycles.

Historically, homeowners in these situations have been responsible for the full replacement cost, typically ranging from $5,000 to $20,000. This creates a disparity between residents whose service lines are replaced, at no homeowner cost, through the State-funded program and residents who experience emergency or project-driven replacements before their area is included in a State-funded project.
To eliminate this disparity, it is recommended that the City annually allocate local water utility funds to cover the cost of these unanticipated private lead/galvanized water replacements. It is estimated that approximately six to ten unanticipated lead/galvanized replacements will occur annually at a total cost of up to $1,000,000.

It is recommended that Council amend the 2026 Budget to allocate $100,000 from the Water Utility Fund to cover unanticipated lead/galvanized water service line replacements that occur outside the City's State-approved annual Lead Service Line Replacement Project.  A comparable amount would be included in future year budget requests.