HomeMy WebLinkAbout20240603 - CC Workshop MinutesHastings, Minnesota
City Council Workshop
June 3, 2024
The City Council of the City of Hastings, Minnesota met in a workshop on Monday, June 3,
2024, at 5:30 p.m. in the Community Room at the Hastings City Hall, 101 East 4th Street,
Hastings, Minnesota.
Members Present: Mayor Fasbender, Councilmembers Fox, Haus, Lawrence, Leifeld,
Pemble, and Vihrachoff
Members Absent: None
Staff Present: City Administrator Dan Wietecha
Assistant City Administrator Kelly Murtaugh
Finance Manager Chris Eitemiller
Assistant Finance Manager Ashley DeBernardi
Community Development Director John Hinzman
Public Works Director Ryan Stempski
Mayor Fasbender called the workshop to order at 5:30 pm and welcomed councilmembers and
staff. Eitemiller opened the presentation and discussion on preparation and planning for the
2025 budget.
Overview
Eitemiller reviewed basic revenues and expenses for the budget. At present market valuations
and data to estimate property taxes are pending, but it appears that a plain “maintenance” budget
to fund existing services, prior commitments, and inflation could result in a 7% to 7.5% increase
in the levy. Based on last year’s property values, this would be about a $144 increase for the
average residential home.
He noted several other major expenses that will impact this and/or future budgets: backlog of
capital projects, parks and trails plan, fire station remodel, City share of Highway 61 project, and
three water treatment plants for PFAS and nitrates.
PFAS Treatment
Stempski explained that due the new EPA limits, the City will need to construct water treatment
plants to remove PFAS contamination from the drinking water. Plans include treatment to also
remove nitrates which are at elevated levels. This will be a lengthy and expensive project. The
total construction estimate is $68.9M, and ongoing operations and maintenance will run upwards
of $1M annually. The plan is to construct one WTP per year for three years, proposed to start in
early spring 2025 in order to budget the water rate increases to begin the first of the year. With a
five year deadline by the EPA, there is little time to delay.
Although our project seemed to be well received, the legislative session ended without a state
bonding bill. We have applied for other funding an intend to seek state bonding support next
session. But, in the meantime, we will need to consider significant water rate increases in order
to keep the project moving forward. Current estimates to cover debt service for WTP #1 would
mean a 37% increase in water rates. On the average residential user, this would estimate an
approximate increase of $76 for the year. Additional 35% to 40% increases would be necessary
to bring each of the other two WTPs online without outside funding. As the City reviews
potential locations for WTPs #2 and #3, they may result in additional expenses for land
acquisition and piping. In addition to the budgetary expense, this level of debt could degrade the
City’s AA+ bond rating.
There had been considerable public question about options for temporary treatment during
construction over the next three to five years. Stempski reviewed problems such as permitting,
costs, and winter weather which would limit use of trailer units. In-home filters would pose
problems as cost prohibitive and required regular maintenance to avoid causing bacteriological
illness. Utilizing the state contract for bottled water would exceed the Water Department’s
current budget; City Council inquired about the possibility of piggybacking on the state contract
as a savings for individuals rather than purchased by the City. Education, communication, and
private fundraising might be affordable options to help residents determine short-term treatment
appropriate for their individual needs.
Impact on Average Residence
With preliminary estimates of property taxes at $144 and water rates at $76, this would be a $220
increase, plus lesser increases for sewer and stormwater utilities. Council noted that this was
pushing beyond prior property tax and utility increases and may be very difficult for some
residents.
Council discussed careful and deliberate spending; may need to pause on some things that were
previously budgeted; difficulty of increasing water rates vs reducing services/resources; some
infrastructure and operations that have historically underfunded; and the need to still run a City
with a variety of services.
Staff proposed while developing their department budget proposals, also generating a list of
potential items that might be scaled back, reduced, or delayed.
Communications
Likely property tax and water rate increases will need much communication for the public to
understand the expenses, how they compare to other cities, costs of operating the City, and
efforts to reduce expenses.
ADJOURNMENT
Workshop adjourned at 6:56 p.m.
____________________________ ______________________________
Mary D. Fasbender, Mayor Kelly Murtaugh, City Clerk