HomeMy WebLinkAboutIX-01 Truth in Taxation for 2026 BudgetCity of Hastings 101 Fourth Street East Hastings, MN 55033-1944 Phone: 651-480-2350 www.hastingsmn.gov
To:Mayor Fasbender & City Councilmembers
From:Dan Wietecha, City Administrator
Date:December 1, 2025
Item:Truth in Taxation Hearing for 2026 Recommended Budget
Council Action Requested:
Conduct the Truth in Taxation hearing for the 2026 budget.The Council will be asked to consider
adopting the final budget either at this meeting or at their December 15, 2025,meeting.
Background Information
Purpose of the Budget
The budget represents the financial plan and priorities of the City of Hastings. It is intended to clearly
communicate the City’s goals and how resources are allocated to those priorities in an easy-to-
understand manner. The recommended budget is the result of an ongoing process in alignment with
the City Council’s Strategic Plan and our CORE Values.
Council and Committee Meetings
This year’s budget process began with a Finance Committee meeting on May 12 to discuss preliminary
projections and the proposed calendar for this year’s process. The City Council then met in a workshop
on June 2, 2025,to discuss preliminary 2026 budget projections and to provide broad direction for the
budget process and outcomes. On August 19 and 20, the Finance Committee met to discuss the
proposed budget. At these meetings, Administration presented overall comprehensive budget
information including revenues, expenses, department requests for capital, new initiatives, and
personnel. Departments presented their individual budget requests in more detail and addressed
Council’s questions. The Council then held a budget workshop on September 2nd. Discussion at this
meeting centered around the proposed tax levy and its impact on homeowners, as well as planned
utility rate increases, and capital projects and equipment planned for 2026.
The Finance Committee (Vihrachoff, Beck, Leifeld)met on November 24th to receive updates from staff
on the Proposed Budget. The Committee elected to reduce the tax levy from the proposed level, to
$21,629,930.
IX-01
P a g e | 2
Historical Information
After being nearly steady between 2024 and 2025, the City’s tax capacity is projected to grow
again between 2025 and 2026.Overall City tax capacity will increase by 5.91%to $33,176,938.
In alignment with a City Council goal, staff has prepared a budget which continues to balance
the property tax levy with meeting the City’s most pressing needs. The proposed budget
includes a tax rate of 60.104% forthe proposed 2026 tax levy, which represents an increase of
0.95%.Primary areasfor this levy increase include Public Safety staffing, employee wages and
insurance, facility maintenance and infrastructure projects, and capital equipment needs.
Year Tax Rate
2017 62.52%
2018 60.86%
2019 59.61%
2020 57.39%
2021 57.35%
2022 58.90%
2023 53.34%
2024 55.31%
2025 59.16%
2026*60.10%
* proposed rate
IX-01
P a g e | 3
Recommended Budget
The recommended budget is the result of many meetings with our department staff and
following Council direction to responsibly take care of our current assets. The recommended
budget is balanced operationally.As part of the proposed levy and budget, we have the
following significant items identified within the recommendations:
Alignment with Strategic Plan
•Operational Effectiveness
o Equipment: EV fire suppression, Knox Box key security, EMS dosage calculator, City Hall key fob
system, ballistic vests, LED lighting
o Staff additions to address service needs
o Continue phasing-in 5-year replacement schedule of fleet vehicles
•Improved Water Treatment
o Begin construction Eastern WTP, including Vets Home interconnect
o Design work for Western WTP
o Well #9 –capacity needs and to pressure MPCA for funding
•Asset Management
o Addressing deferred maintenance in buildings
o New Roof –Public Works Building
o Park/Trail Project TBD –would like to work toward on-going funding
City Employees
•COLA 3.5%
•Health Insurance estimated at 5.8% increase
•Market adjustment for Police Officer wages 3-6%
•Market Adjustment for Firefighter/EMT wages 4% (phasing in over 3 years)
•New position: Part-time Police Administrative Specialist II (20 hours/week)
•Add Hours: Full-time Public Works Administrative Assistant (from 32 to 40 hours/week)
•Add Hours: Aquatics Center Manager, 8 weeks to enable pre and post season work
•Eliminate position: not fill vacant position of 4th Building Inspector
Infrastructure, Facilities, and Equipment –CIP/CEP
•Neighborhood Infrastructure Project (4th St. W and Pleasant) –bonding $4.2M over 10 years
•PFAS Treatment, Eastern WTP –$20.6M combination of grants and PFA loan over 25 years
•Well #9 –accelerated from 2027 schedule
•New Roof –Public Works Building
•Vets Park Lighting to LED
•Park/Trail Project
•Continue 5-year rotation of fleet vehicles
•Continue Skim-Patch and Mill & Overlay Street Maintenance
Phasing-in 5-year replacement schedule of fleet vehicles
Impact on Taxpayers
IX-01
P a g e | 4
The City Council has consistently shown a high sensitivity to how budget decisions impact the
Hastings taxpayer. Accordingly, we have prepared the following analyses:
Homeowners
The City’s median home value for 2026 is approximately $331,600 and would pay an estimated
$1,949 in City property taxes annually at the 2026 proposed tax rate, an estimated increase of
$153 over 2025.
Businesses
Property taxes for commercial properties are impacted by a variety of factors including
valuation, fiscal disparities and tax classification, such that a comparison by property value
alone (as for homeowners) does not provide an accurate picture of tax impact. The comparison
below looks at the tax history of a sampling of actual properties that represent the various
types of commercial properties that exist within the City. Market Value of these Commercial
Industrial properties increased on average about 9.89%.
Additional Information
Additional detail on the 2026 proposed budget is available online at: www.hastingsmn.gov
(search for “budget”)
Next Steps
Following the Truth in Taxation hearing on December 1, the Council will be asked to consider
the full and final 2026 budget, levy, and HEDRA levy.
Sample Calculation (City Portion Only)
Property Value 331,600
Less Homestead MV Exclusion (7,396)
= Taxable Market Value 324,204
State Class Rate 1.00%
=Tax Capacity 3,242
Property Tax Rate 60.10%
=Gross Taxes Paid 1,949
Property Tax Dollars Paid - City 1,949
Property Value
Market Value
Increase
City Estimated
Tax 2026
City Estimated
Tax 2025 Difference
Industrial 1,377,600$ 12.83%10,552$ 9,279$ 1,273$
Industrial
Preferred 2,546,200$ 9.14%19,216$ 17,445$ 1,771$
Commerical
Preferred 243,900$ 7.68%1,571$ 1,436$ 135$
Commented [DW1]: lease confirm tax rate % (see comment
above).
IX-01
P a g e | 5
I would like to extend my sincere appreciation to the Finance Committee as well as our staff for
their work and involvement on the 2026 budget.We continue to approach the budget process
in a strategic and holistic manner—balancing many needs with limited resources.I am proud of
our staff’s dedication in providing these services in alignment with Council policy goals.
IX-01