HomeMy WebLinkAbout20250505 - CC Workshop MinutesHastings, Minnesota City Council Workshop May 5, 2025 The City Council of the City of Hastings, Minnesota met in a workshop on Monday, May 5, 2025,at 5:30 p.m. in the Volunteer Room at the Hastings City Hall, 101 East 4th Street, Hastings, Minnesota. Members Present:Mayor Fasbender, Councilmembers Beck, Haus,Lawrence, Leifeld, Pemble, and Vihrachoff Members Absent:None Staff Present:City Administrator Dan Wietecha Assistant City Administrator Kelly Murtaugh Public Works Director Ryan Stempski Public Works Superintendent Joe Spagnoletti Finance Manager Chris Eitemiller Mayor Fasbender called the workshop to order at 5:30 pm and welcomed council members and staff for discussion about the Hydroelectric plant.Stempski provided an overview of past presentations to Council via workshop and Utility Committee meetings. There was a study on the plant done in 2023 to analyze optimal conditions and costs for future operations and maintenance. The plant’s maintenance costs are estimated to be over 4x greater than average reported plant. The costs are higher due to the size and complexities of the facility,with limited access for maintenance. Additionally, the city does not have priority access to generating power. The Army Corps of Engineers prioritizes navigation and determines when the plant can generate power based on other needs. Stempski noted the annual costs: insurance $200,000 with fewer insurers willing to cover; rent $100,000; license and fees $50,000; maintenance $45,000; and one-half time of an employee. Additionally, the city invests in dewatering at $500,000 every 4-5 years. Annual revenue has been trending downward. Averaging the past 5 years of revenue and expenses, projected 25 years cash flow would be a negative $10M. Staff have been meeting with the US Army Corps of Engineers (USACE)since December 2023 to explore a solution to the future of the plant operation. There has been no interest in the private market in purchasing the plant. Locally, there is interest on the part of the Corps in hydro power and running the plant, but the decision is made at the federal level. There will be a formal recommendation to Council to submit a proposal to transfer the facility to USACE. It would also be recommended that the City surrender its FERC license. The city may be required to decommission the plant to either leave the project in place or prepare for removal and restoration. The preferred option would be to leave the project in place for USACE to operate. Dewatering is scheduled for this summer. The process includes inspections and taking corrective action to known maintenance needs. USACE is invited to inspect the plant during the dewatering project. Council discussion on replacing the plant with a newer plant and whether the city makes any money off the plant. Stempski indicated that the city cannot be reconstructed to have enough opportunity to make money. Stempski reminded Council that the city will never have full authority to run all of the time due to the USACE and do not always have the right water levels to expand power production. Council discussion on the age of the plant and that its maintenance is getting more costly. The return on investment may have been there at one time but may not be there going forward. Staff recommendations planned for action at the Council meeting on May 19. Staff want to offer USACE an inspection-certified, fully functioning plant to incentivize their interest in taking over the plant.Council discussion on the connection residents may have to the plant so council members will need talking points.Stempski indicated that Council will get the presentation and talking points in preparation for the May 19 council meeting and conversations with residents. ADJOURNMENT Workshop adjourned at 6:25 p.m. __________________________________________________________ Mary D. Fasbender, Mayor Kelly Murtaugh, City Clerk