PFAS certainly dominates budget rates conversations.”

City Administrator Dan Wietecha

The Hastings City Council unanimously approved the preliminary city budget of $44,499,029 and levy of $21,729,930 at the Tuesday, Sept. 3 city council meeting.
The levy represents an 8.4% increase which translates to an additional cost of $162 per year for median value homes in Hastings at $331,600.
The city set the Truth in Taxation meeting for Dec. 1 with the budget expected to be adopted later that month.
The adoption of the levy means that the city can now only make changes that reduce the levy.

Water treatment plants
The 2026 proposed budget and levy reflect the financial pressures of building the second water treatment plant which is expected to break ground next summer and cost between $20.6-$22.3 million. That cost range represents the possibility of connecting the Veteran’s Home to city water.
“PFAS certainly dominates budget rates conversations,” said City Administrator Dan Wietecha.
The second, or eastern water treatment plant is planned to be constructed in the Hastings Industrial Park and serves wells 6 and 8 which have some of the highest concentrations of PFAS in city water.
Plans for the plant are roughly 60% completed, according to city staff.
Currently, the city has received a $1 million planning and design grant with $5 million designated as fundable for the project from Emerging Contaminants Grant.
City officials are hopeful for future funds from both state and federal levels, but lacking future outside funds, 30% water rate increases are currently scheduled.
Three more 10% water rate increases are set to take place January 2026, July 2026, and January 2027.
Those increases come alongside a preliminary increase of 4% for stormwater and 4.5% for sewer.

Staffing
Roughly $1.2 million comes from staff-related expenses within the city.
Health insurance costs are expected to rise 20%, which along with the regular cost of living adjustments (COLA) of 3.5%, and increased steps for city employees form the majority of staff-related expenses of more than $1.05 million.
COLA expenses in particular were scrutinized by Councilor Lisa Leifeld: “In a time where we are raising taxes, we all need to be fiscally aware […] this is not how it happens outside of government jobs.”
Councilors discussed reducing COLA rates for city employees, which largely wouldn’t affect topline city financials with a 0.5% reduction of COLA translating in savings of roughly $30,000 for the city, according to Wietecha.
Several of the COLA rates are also dictated by unions and therefore cannot be changed by city staff.
The annual adjustments, which are “standard practice for local governments,” said Finance Manager Chris Eitemiller, was built in part off the 2022 wage survey which found that many Hastings city employees’ wages lagged behind other similar roles.
Assistant City Administrator Kelly Murtaugh called the increases a way to “maintain competitiveness among employee wages,” as a tool for maintaining employees long-term.
Other staffing-related expenses include the addition of a part-time administrative role for the Hastings Police and adding eight weeks to the aquatic manager for the Hastings Family Aquatic Center (HFAC).
The police administrative role comes in part due to increased public records requests, according to Wietecha. Similar to the school district, Hastings police have seen a sharp rise in data requests in recent years which has put a strain on administration within the department.

2026 Street project
The 2026 street project will repave Fourth Street West between River Street and Pleasant Street, as well as Pleasant Street from Fourth Street West to Highway 55.
This stretch of road is intended to be finished before the 2028 Highway 61 project because of the potential for increased use while Highway 61 is under construction with Wietecha calling it the “unofficial local detour.”
The project is budgeted at $4.2 million.

2028 Fire engine
While not part of the 2026 budget, the city council unanimously approved the purchase of a new fire engine which is expected to be delivered in 2028 at a cost of $1.25 million.
Fire trucks take about three years to construct, with a quarterly inflation rate of 1.75%.
By authorizing the purchase, the city can lock in a price this year, while still paying for the engine when it is received in 2028.
The purchase is a step in “right sizing” the Hastings Fire Department’s fleet with a future reduction from seven vehicles to four with three engines and one ladder truck.
Moving forward with this plan would allow the Hastings Fire Department to dispose of the fire engine from 2000 next year, which would be a step towards a regular replacement rotation for the fleet.

Well #9
The city also plans to drill its ninth well, which is meant to help the city meet peak demands and bolster capacity in the event that a well is shut down.
The well will be located in Wallin Park with a footprint of 18x22 feet with a height of 10 feet at its peak.
While the well has been planned for years, the timeline has been moved forward in part for “strategic leverage” over the Minnesota Pollution Control Agency (MPCA), said Wietecha.
Previous testing for the future well indicates high levels of PFAS “similar to well five which got connection and funding” from the 3M settlement fund said Wietecha.
According to Wietecha, Hastings city officials have spoken to MPCA officials about this connection but because there is no well, funding has not been available.
“We want to take that argument away from them because the well’s coming eventually,” said Wietecha.
Currently, the well is expected to be drilled in spring 2026 with quarterly PFAS testing taken thereafter.
Normally, the EPA requires a four-quarter average, but city staff are hoping that if early tests show high enough levels of PFAS, it will create pressure on the MPCA to include the well within the 3M settlement fund.