Council wants to keep Community Investment Fund

By John McLoone

With the demand of capital projects, inflation and upgrades needed at the Hastings Ice Arena, the City of Hastings 2023 budget is a work in progress. The city finance team met with the city council at a work session in June to brief elected officials on the process.

City Administrator Dan Wietecha perhaps summed up the budget work as this: “There are a lot of wants. There’s a lot of needs.”

The budget process has been well underway at city hall, and departmental budget requests are due to administration by July 8. Staff budget meetings will be held throughout this month, and City Administrator Dan Wietecha will make a presentation on the 2023 spending plan to the city council Aug. 5. The finance committee will work on the budget through August. On Sept. 6, the city council will set the preliminary tax levy, with the hearing and budget adoption set for December.

City Finance Director Chris Eitemiller said that wages are being budgeted at a 3 percent increase, and that caught the attention of councilmember Tina Folch.

“Why are you choosing 3 percent when inflation was 8.7 percent?” she asked. “I’m concerned we’re locked in at 3 percent. It’s unfair in my opinion.”

Wietecha said union contracts are locked in at a 3 percent increase for next year already. The city also is in the process of having a salary study conducted that may lead to some changes in how employees are paid, and that there is money budgeted for possible increases because of that ($200,000). The study is expected to be presented to the city council on July 20. Initial projections are that the salary study, necessary to make sure the city salary structure is in line with what likesized municipalities pay, could require an additional $400,000 and may need to be phased in over time.

From a revenue standpoint, Eitemiller said the city should expect an additional 1 percent in levy dollars over last year, which would equal $162,900. In addition, growth of the tax base would mean additional revenue. At 3.3 percent, Eitemiller projected an additional $537,000, which is about the same amount as wages, benefits and inflation are expected to come in at. In addition, the city still has $979,000 in American Rescue Plan Act COVID relief funds unspent, and there’s a general fund balance of $1 million.

From a staffing standpoint, the city fire department has applied for a SAFER grant (federal Staffing for Adequate Fire and Emergency Response) to cover the cost of hiring six needed additional firefighters. That would mean in three years, the city would need to start covering the costs for that additional staff.

“If we don’t get the grant, the department is still looking to hire fulltime firefighters,” Eitemiller said.

The police department is looking to hire an additional investigator and perhaps another school resource officer.

An additional building inspector was hired to help with the work load this spring, and that position likely will remain in the budget to keep that operation staffed where it needs to be. The Public Works Department could possibly seek one more operator.

This year, the city unveiled a new Community Investment Fund with a stated purpose “to encourage and support community partnerships and communitydriven projects.” There was $100,000 in the 2022 budget for that fund which helps community organizations with projects on city properties, such as parks or for public art or historic preservation.

“We used onetime funds to get that started. If we want to keep it going, we need to find additional funds,” said Eitemiller.

Major projects are making this a particularly difficult budget. The public works department tackles a street/infrastructure project annually at a cost of approximately $4 million, and the city is looking at a $4 million bill for necessary upgrades of the Hastings Civic Center Ice Arena. That project had been eyed for state bonding for a percentage of the project, but a bonding bill was never passed by the legislature.

In additional, the County Road 46 project is estimated to cost the city $3 million in 2024, and the Hwy. 61 project set for 2026 is slated to cost the city $5 million.

“If we have to do additional borrowing, that would cause additional strain,” said Eitemiller.

Wietecha is hopeful that the city can continue with the neighborhood street upgrades and the arena in 2023.

“We’ve been wanting to do a neighborhood project every year,” he said. “We might be able to do the street project and the arena next year. It’s tight. It’s tough to do two the same year, but we could.”

He said that waiting a year on a street project, just pushes future projects back.

“It’s tough to do these major projects. We have too many stacked on top of each other,” said Wietecha. “There are assets we need to maintain. We need to stay on top of our infrastructure projects.”

There are other options for funding things like trail and park improvements that are on the books and the arena project. Wietecha said that a local sales tax could be established, but that could take years to get finalized. Also, the city could go to referendum and seek permission from voters to borrow for the projects.

“But you have to remember, the referendum piece is entirely on local taxpayers,” he said. If a sales tax were implemented, half of that bill, he estimated, is paid by nonHastings residents.

One problem with pushing projects to future years also is the cost. For example, the ice arena price tag has jumped from $2.6 million to $4 million.

“Isn’t that why we’re here today? We kept pushing these off,” said Mayor Mary Fasbender.

“We’re in an expensive business,” said Wietecha. From the council standpoint, as far as projects go, members expressed the opinion that the Community Investment Fund was a big win.

“I thought that was a really good program for community relationships. I think it would be a wise decision to leave that on the table again,” said Folch.

Said Mark Vaughan, “My two cents, I support the Community Investment Fund.”

Some councilmembers expressed the view that the ice arena and parks and trails improvements could be packaged in a referendum.

“If you wrap the arena in with the trails, I think there would be support,” said Folch.

Councilmember Lisa Leifeld cautioned against such a plan because it doesn’t benefit all residents.

“I’m concerned about the aging population in our community. That’s a big class of people that can’t afford it and don’t support it,” she said.

It was pointed out that the Hastings School District will also be going to voters next year to extend its operational levy, which expires in 2023.

Hastings City Administrator Dan Wietecha discussed the 2023 budget process with city councilmembers and department heads at a June 20 workshop. Photo by John McLoone