Most homes in Minneapolis and Saint Paul are old houses with masonry chimneys. When these masonry chimneys go bad (and they all go bad) the repair can be very expensive. If you call up a chimney contractor to see what can be done about it, they'll tell you the chimney needs repair, just like an orthodontist will tell you your kid needs braces. Repair is just one option. The other option is removal.
When chimneys are badly deteriorated, sometimes it just makes more sense to tear the chimney down below the roof line instead of repairing the section that sticks up above the roof. The benefits of doing this are lower repair costs, less exterior maintenance, and less chance for leakage at the roof. Chimneys are notorious for leaks, both through the top and at the roof flashing.
If you're thinking about tearing a chimney down below the roof line, the chimney must be located in the middle of the house. If the chimney is located on an outside wall, the fix wouldn't simply involve removing the chimney below the roof line - it would require complete removal of the chimney, which might be cost prohibitive. I counted houses around my neighborhood in Minneapolis (Bryn Mawr), and about three out of four houses has a chimney in the middle of the house.
To remove the chimney below the roof line, the chimney must also be abandoned, or only be used to vent gas appliances that are connected to a metal flue liner. If the chimney is completely abandoned, it's a no-brainer; it's not doing anything, just get rid of it.
If the chimney is being used to vent gas appliances such as a furnace / water heater / boiler, that vent will still need to penetrate the roof to carry the exhaust gases to the exterior. Just make sure that all of the gas appliances are properly connected to the vent!
It used to be common practice to connect the furnace to a metal vent that ran inside the chimney, while the water heater would be connected only to the chimney, where it would use the annular space around the furnace vent to carry exhaust gases to the exterior. If you see the water heater vent connector entering the chimney separately from the furnace or boiler, this is probably what is happening. That's what you're seeing in the photo below - the smaller vent connector that I outlined in red comes from the water heater.
The diagram below shows the same thing - click for a bigger version.
If you have an installation that looks like this, you should have it fixed, whether you plan on tearing down your chimney below the roof line or not. Allowing the water heater to vent in to the annular space in the chimney will allow the corrosive exhaust gases to damage the chimney walls, and water heaters usually don't draft properly when they're installed this way... but I digress. More on this topic another day. Back to the chimney.
If the chimney is removed down below the roof line, be sure to seal up what's left of the chimney inside the attic space, to prevent the chimney from doing what it does best - bringing warm air up! If the chimney ends below the roof line, it will act like a huge attic bypass, allowing heat to escape in to the attic. If the chimney is abandoned, seal off the top completely. If the chimney is still used as the chaseway for a gas vent, seal off the area between the chimney and the vent with sheet metal, and use high-temperature caulking to make it airtight.
No more chimney maintenance!