Hastings residents will not face another water rate increase in 2026, thanks to a major funding breakthrough in the city's ongoing effort to remove PFAS contaminants from its drinking water.
That was one of the headline announcements delivered by City Administrator Dan Wietecha during his monthly PFAS update to the Hastings City Council Monday night, July 6, as the city continues moving forward on what remains one of the largest public infrastructure projects in its history.
While significant challenges remain — including selecting a site for the third treatment plant and preparing for additional rate increases beginning in 2027 — Wietecha said recent state funding success has dramatically improved the city's financial outlook.
"We're in a much better position than we were even a few months ago," Wietecha reported in his memo to the council.
Perhaps the most welcome news for residents is that Hastings will not implement the second water rate increase that had been anticipated for 2026.
Earlier this year, the city had projected another increase would likely be necessary to help finance construction of three water treatment plants designed to remove PFAS contamination from the city's municipal water supply.
However, after receiving full funding for the eastern water treatment plant through state bonding and grants, the city updated its financial projections with Northland Securities in late May.
The revised analysis showed the city could postpone additional increases this year.
"The City Council decided on June 1 not to raise rates again in 2026," Wietecha noted.
The outlook isn't entirely free of increases, however.
The updated financial model projects approximately a 13 percent increase will be necessary during 2027. Rather than imposing it all at once, city officials are expected to consider splitting the increase between January and July next year as part of the city's budget discussions.
That represents a substantial improvement over earlier projections.
Only a year ago, Hastings officials were discussing annual water rate increases approaching 37 percent to finance the PFAS response. Since then, millions of dollars in grants, settlement funds and state appropriations have significantly reduced the burden on local ratepayers.
The improved financial picture stems largely from the Legislature's approval of a $17.5 million bonding appropriation for Hastings' eastern water treatment plant during the 2026 session.
Combined with an anticipated $5 million federal Emerging Contaminants Grant, the eastern facility is now fully funded.
That funding success marks a major victory after several years of lobbying by city officials and local legislators.
Clean and safe drinking water has remained the City Council's top legislative priority, with Wietecha, Mayor Mary Fasbender and city staff making repeated trips to St. Paul to advocate for assistance.
State Sen. Judy Seeberger and Rep. Tom Dippel championed Hastings' requests throughout the legislative process, helping secure the bonding dollars after previous efforts had fallen short.
Overall, Hastings has now secured approximately $23.3 million in outside funding toward its PFAS program, including:
• $3.2 million for planning and design.
• Approximately $15.1 million from the East Metro 3M Settlement for the central treatment plant.
• $5 million in Emerging Contaminants Grant funding.
Additional funding commitments include the new $17.5 million bonding appropriation for the eastern plant, another anticipated $5 million Emerging Contaminants Grant and approximately $1 million in Congressionally Directed Spending toward the future western facility.
Construction continues steadily on the first of three planned treatment plants.
The central water treatment plant, located near North Frontage Road, has entered another visible phase of construction.
During June, contractor Magney Construction installed massive precast concrete wall panels manufactured by Molin. The exterior panels include brick already cast into the concrete before being transported to the site and lifted into place by crane.
Interior masonry walls have also been completed.
Workers will now begin roofing operations while continuing underground utility work beneath the driveway connecting the facility to North Frontage Road.
The central treatment plant remains on schedule for substantial completion in December 2026.
Attention is also turning toward the second facility.
The eastern water treatment plant is currently out for competitive bids, with bid opening scheduled for July 23. Construction is expected to begin later this summer and continue through 2027.
Unlike earlier discussions about eliminating nitrate treatment to reduce costs, the eastern facility is now expected to include nitrate removal because full project funding has been secured.
Western plant faces site challenge
The biggest uncertainty currently facing the overall PFAS project involves the location of the future western water treatment plant.
For months, the city had been negotiating with St. Elizabeth Ann Seton Catholic Church regarding property that appeared well suited for the facility.
Those discussions have now stalled.
According to Wietecha, church officials remain uncertain where they may someday build a school on their property, making them reluctant to declare any portion surplus for sale.
As a result, the city has shifted its attention to neighboring property along 15th Street.
The alternate location would increase construction costs because longer pipelines would be needed to connect the treatment plant to Wells 4 and 9. However, Wietecha said the site remains workable because it is still close to the wells, utilities are available and the elevation works within the city's high-pressure water zone.
The city has retained Valbridge to complete a professional appraisal while continuing to evaluate several possible locations.
One development that could ease pressure on Hastings is a proposed extension of federal PFAS compliance deadlines.
Last year, the U.S. Environmental Protection Agency finalized new drinking water standards limiting PFOA and PFOS to just 4 parts per trillion.
Five of Hastings' six municipal wells exceed those standards.
Originally, communities had until April 2029 to comply.
In May, however, the EPA initiated rulemaking that would extend the compliance deadline two additional years, until April 2031, for qualifying water systems.
For Hastings, the extension could provide valuable flexibility.
It would allow the city additional time to seek grants and outside funding while spreading future water rate increases over a longer period.
However, Wietecha cautioned there are compelling reasons not to deliberately delay construction.
Residents would continue receiving contaminated water longer, construction costs continue rising because of inflation, competition for grants will likely increase, and the city's current schedule already leaves very little margin for unexpected delays.
"Our residents will continue to have contaminated water until all three treatment plants are built and operational," Wietecha wrote in his report.
For now, the legal compliance deadline remains April 2029 while the EPA completes its rulemaking process.
Hastings' PFAS response has accelerated dramatically during the past three years.
After testing found contamination in all six municipal wells — with PFOA detected throughout the system and PFOS present in two wells — the city completed an extensive feasibility study in September 2023.
Engineers concluded that constructing three decentralized treatment plants would be the most cost-effective solution while also allowing the Minnesota Veterans Home to connect to the city's treated water system instead of building its own treatment facility.
The overall construction program is now estimated to cost approximately $70.3 million, with annual operating costs exceeding $1 million.
City officials have aggressively pursued every available funding source while also continuing environmental investigations into whether additional municipal wells can be linked to contamination originating from the 3M Cottage Grove disposal site.
Those investigations have already resulted in approximately $15 million from the East Metro 3M Settlement for Well 5 and the central treatment plant.
The city has also retained the Pawa Law Group to pursue potential environmental litigation against parties believed responsible for the contamination, although Wietecha acknowledged any lawsuit would likely take years to resolve.
Although Monday's report contained encouraging financial news, city officials emphasized that Hastings remains in the middle of a lengthy and expensive process.
The central treatment plant is expected to begin operating late this year.
Construction on the eastern plant should begin later this summer.
Planning continues for the western facility, which will ultimately complete the city's PFAS treatment system.
In the meantime, officials will continue pursuing grants, legislative appropriations, settlement funding and possible litigation while trying to minimize the impact on local water customers.
The strategy appears to be paying dividends.
Just months after city officials warned of another significant water rate increase in 2026, Hastings instead finds itself with full funding for its second treatment plant, no additional rate increase this year, and a clearer path toward eventually providing PFAS-free drinking water to residents.
Even with those successes, Wietecha made clear the city's work is far from finished. The final treatment plant still requires a site, additional funding opportunities remain critical, and the community faces several more years of construction before Hastings' water system is fully protected from PFAS contamination.