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HomeMy WebLinkAbout20250602 - CC Workshop MinutesHastings, Minnesota City Council Workshop June 2, 2025 The City Council of the City of Hastings, Minnesota met in a workshop on Monday, June 2, 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 Finance Manager Chris Eitemiller Assistant Finance Manager Ashley DeBernardi Mayor Fasbender called the workshop to order at 5:30 pm and welcomed council members and staff for discussion about the 2026 Budget.Eitemiller presented materials that were recently shared with the Finance Committee and summarized the budget preparation schedule. Eitemiller reviewed the revenue considerations for 2026. A preliminary tax increase of 8.1% would be needed to “keep the lights on.” Home valuation was flat last year but is showing a slight increase on the average home. The Rural Fire contribution will increase $74,000. There are many cost pressures impacting the 2026 budget. These include personnel (step increases and cost of living allowance), health insurance projected at a 15% increase, and negotiations with 3 of 5 unions. Eitemiller indicated a 4% placeholder for inflationary increases. There is an increase in debt service over $300,000 because the payments on the Civic Arena Refrigeration Project were interest only in 2025. There remains a large backlog in CEP/CIP projects, but the city has been taking steps to reduce the backlog. Eitemiller indicated an increase in recent years addressing deferred maintenance, replacing fleet vehicles, increasing skim patching to extend the life of city streets, using one-time funds as available, and partnering with the county on trails for maintenance. The areas that have been unfunded or underfunded include trails/parks, fire station remodel/relocation, hydroplant decommissioning, and street projects. Larger initiatives are looming that may impact the city’s ability to focus on these unfunded/underfunded projects: Highway 61 and three water treatment plants. Eitemiller indicated that wages are a significant portion of the budget.Council discussion on keeping wage/compensation momentum going to continue to attract and retain employees. Council discussion on step increases and cost of living adjustments (COLA)and whether COLA should be offered in 2026. Some costs, like health insurance and Minnesota Paid Leave are outside the control of the city. Council is concerned about the holding of tax levels in the past which prevented some of the investments in infrastructure and that may require increases now to address. Council discussion about the 2026 proposed Neighborhood Project and possible adjustments to modify for cost savings. Council expressed appreciation for the work of the engineering team, but the neighborhood projects are expensive and other areas, like parks/trails and deferred building maintenance, may not be getting enough investment. Council discussion on challenge with seeking funds from ISD 200 to support the Civic Arena Refrigeration Project. Council review of historic agreement with ISD 200 as related to projects of mutual benefit at 30% ISD 200 and 70% City. Council expressed some interest in moving forward with new rates for the hockey season. Further discussion about the impact of a fee increase on the school and the sport as well as families. Council discussion on the impact of delaying the construction of the Eastern Water Treatment Plant in light of the extension of compliance date. Council indicated that addressing the contamination and the logistics of a complicated project would support moving forward on the current schedule. Council discussion on transparency in communication and messaging about the budget. Key messages may include that the investments in current projects are important and worthwhile, continue to promote the many things provided by the city through tax dollars, and that councilmembers care about the challenges of the decisions that need to be made related to the budget. ADJOURNMENT Workshop adjourned at 6:55 p.m. __________________________________________________________ Mary D. Fasbender, Mayor Kelly Murtaugh, City Clerk