[0:06] Mayor Mary Fasbender: We're good. Good. Okay. Time being 7 o'clock, I call the Hastings City Council meeting to order. Please stand for the Pledge of Allegiance. I pledge allegiance to the flag of the United States of America, and to the Republic for which it stands, one nation under God, indivisible, with liberty and justice for all. Welcome, and let the roll reflect we do have a full Council this evening. And under Determination Quorum, or sorry, um, tonight we are pleased to announce several new and promotional employees to and their introductions today. And the first to be introduced will be Public Works Director Ryan Stempski, who will introduce Cody Mathisen. Welcome, Ryan. [0:54] Ryan Stempski (Public Works Director): Thank you, Mayor and Council. Yes, these are one of the fun meetings where we get to talk about new hires and promotions. And for Public Works, um, very, very excited to talk a little bit about Cody Mathisen. Cody Mathisen was promoted to City Engineer, a role very near and dear to my heart since I was your last one, um, on July 1st of this year. This promotion was a work in progress since he started in November of 2020. Cody always took on the challenging tasks and said yes to anything that helped out the department. [1:40] Ryan Stempski: His professionalism stood out from day one, and his positive personality is infectious to everyone he encounters. Cody is a natural-born leader. He inspires those around him. He's a perfect fit to this new role. The engineering department has truly embraced him as a leader and look to him for guidance and support. With the volume of work that the Public Works department is producing and has on the horizon, he is a major, major part of the success of the department delivering consistent high-quality work. Cody incorporates input from operations and has a unique ability to bridge information and make connections across all departments of the city. Cody is a U of M graduate, the chair of a Young Professionals Committee for the American Public Works Association—a committee that I'm no longer welcome to, keyword is "Young" Professionals Committee. And he lives in Woodbury with his wife Taylor, and two boys, Jack and Charlie. [2:27] Ryan Stempski: I personally want to thank Cody for all his hard work, his effort, his patience, his maturity that he has shown since he's come to the City of Hastings. I could not pick a more qualified City Engineer. We are lucky to have Cody here in Hastings. I also appreciate Cody for his sense of humor with putting up with all of my dad jokes and my millennial jokes. Um, really appreciate it. Congratulations on your promotion to City Engineer. [3:23] Mayor Mary Fasbender: Woo! After, Council will do a picture with all the new employees and promotions. Thanks, Ryan. Welcome, Cody. Tonight we will also have our Chief of Police, Kyle Linscheid, um, introduce his new employee. Welcome, Chief. [3:35] Kyle Linscheid (Police Chief): Thank you, Mayor. All I can say is I wish I was a millennial. I think I'm a step up from that. I'm not quite sure how that all works. Wishes... double millennial, yeah. So, Mayor, Councilmembers, city leaders, thank you for this opportunity tonight. Uh, I do have the honor of introducing our new Community Service Officer. I told him he doesn't have to come up, but Mitch, I'm going to make you come up here. I apologize. [4:09] Kyle Linscheid: Mitch Giles. Mitch grew up in Cottage Grove, was close, he attended Park High School. Mitch has a full plate. He's working 20 hours a week at Hastings Police Department and he's attending school at Century College. He's enrolled in the criminal justice program and his goal is to become a sworn police officer. Mitch is the second Community Service Officer for Hastings PD and he has hit the ground running. He's known already as Big Mitch. I'm not quite sure how he got that name, but everyone refers to him as Big Mitch. Mitch assists us in a support function with running vehicles for service, bringing evidence to various locations for analysis, and assisting the patrol division with a number of tasks. So please assist me in welcoming our new Community Service Officer, Mitch Giles. [5:00] Kyle Linscheid: And I also have the honor of introducing two of our newest Hastings police officers, Terry Cunen and Brandon Karsky. Gentlemen, if you could come up here please. We will be administering the oath of office this evening to Terry and Brandon, but before that, a little bit about them. So, Officer... all right, I'm already getting confused, I already asked you to come up here. So Terry is a homegrown boy, graduated from Hastings High School. Terry attended Mankato State University, received his law enforcement degree. Um, we actually interviewed Terry before he even passed his Peace Officer exam and he started just a few days after passing the test. Terry's been with Hastings Police since July 8th of this year. In his free time he enjoys refereeing hockey and playing golf, but I have it on good authority that he's in a league above the rest of us out there. I don't know, you can see all our officers standing in the back, most of them are pretty good golfers. I am not, but I hear Terry is outstanding. [5:58] Kyle Linscheid: Now Brandon grew up in Duluth, graduated from Denfield High School. He received his law enforcement certificate from Fond du Lac Tribal and Community College, began working for St. Louis County Sheriff's Department in 2017. Growing up in the Duluth area, it's no surprise that Brandon enjoys the outdoors, hunting, fishing, and exploring. He began working with Hastings PD on September 23rd, and this afforded us the opportunity to be at full staff—something we have not seen for a number of years. So thank you for that, gentlemen. One of the most well-known symbols of policing is the badge. Hastings officers wear the badge with pride, but it means so much more. The badge is a sign to the community that we are there to assist, to move them away from danger, and run in when others may be running out. The badge also shows that you are part of a brotherhood and a sisterhood and that your family size has increased tremendously. [6:45] Kyle Linscheid: We'll have the oath of office and then the pinning of the badge. And so tonight for Officer Terry Cunen, his mother Michelle is going to pin the badge. And for Officer Brandon Karsky, his wife Paige is going to pin the badge. And I'll call you up in just a minute. So before that, and because I'm nice, I'm going to let you follow along so that we don't have to repeat. So I'm going to have you raise your right hand and repeat after me. [7:13] Kyle Linscheid: I, state your name... [7:15] Terry Cunen & Brandon Karsky: I, Terry Cunen / Brandon Karsky... [7:18] Kyle Linscheid: Do solemnly affirm that I will support the Constitution of the United States of America... [7:23] Terry Cunen & Brandon Karsky: Do solemnly affirm that I will support the Constitution of the United States of America... [7:28] Kyle Linscheid: The Constitution of the State of Minnesota and the ordinances of the City of Hastings... [7:34] Terry Cunen & Brandon Karsky: The Constitution of the State of Minnesota and the ordinances of the City of Hastings... [7:38] Kyle Linscheid: And that I will faithfully discharge the duties of a police officer for the City of Hastings... [7:43] Terry Cunen & Brandon Karsky: And that I will faithfully discharge the duties of a police officer for the City of Hastings... [7:48] Kyle Linscheid: Counties of Dakota and Washington and State of Minnesota... [7:53] Terry Cunen & Brandon Karsky: Counties of Dakota and Washington and State of Minnesota... [7:57] Kyle Linscheid: According to the best of my judgment and ability... [8:00] Terry Cunen & Brandon Karsky: According to the best of my judgment and ability... [8:04] Kyle Linscheid: On my honor, I will never betray my badge, my integrity, my character, or the public trust... [8:11] Terry Cunen & Brandon Karsky: On my honor, I will never betray my badge, my integrity, my character, or the public trust... [8:17] Kyle Linscheid: I will always have the courage to hold myself and others accountable for our actions... [8:22] Terry Cunen & Brandon Karsky: I will always have the courage to hold myself and others accountable for our actions... [8:27] Kyle Linscheid: I will always uphold the Constitution, my community, and the agency I serve. [8:32] Terry Cunen & Brandon Karsky: I will always uphold the Constitution, my community, and the agency I serve. [8:36] Kyle Linscheid: Congratulations, gentlemen. And Michelle and Paige, if you'd like to come up and pin the badge on now, that would be great. [9:06] Kyle Linscheid: Please assist me in welcoming Officer Cunen and Officer Karsky. Once again, thank you. [12:38] Mayor Mary Fasbender: Yeah, all right. Well, that's always an exciting evening when we welcome new and promotionals—new employees and promotional employees. Comments from the audience? At this time I would accept comments from the audience. If you wish to speak to the Council, you may step up to the podium, give your name and address. And anyone from Zoom... oh, sorry, I'm so sorry. Okay. First of all, Council, I would accept the motion for the minutes from the November 18th meeting. [13:28] Councilmember Fox: So moved. [13:29] Councilmember DawnMarie Vihrachoff: Second. [13:30] Mayor Mary Fasbender: Okay, Councilmember Fox and second by Councilmember Vihrachoff. Thank you. All those in favor of the motion, state by saying aye. (Ayes). Opposed? And that motion prevails. All right, now comments from the audience. Anyone wish to speak to Council? Anyone on Zoom? All right. Consent Agenda. Any items to be considered, first of all? Any items to be considered, Council? Okay. Consent Agenda, I would accept a motion to approve the Consent Agenda. [13:48] Councilmember Lisa Leifeld: So moved. [13:49] Councilmember Fox: Second. [13:52] Mayor Mary Fasbender: Councilmember Leifeld with a second from Councilmember Fox. Any discussion, Council? All those in favor of the motion, state by saying aye. (Ayes). Opposed to that motion, state by saying nay. And that motion prevails. Tonight, under receiving bids and awarding contracts, we have the Industrial Park Water Tower Reconditioning. And for this item, we will have an introduction by our Public Works Director, Ryan Stempski. Welcome again, Ryan. [14:15] Ryan Stempski (Public Works Director): Thank you, Mayor, members of the City Council. Um, yes, we are on to our second elevated water tower um, in just as many years, taking care of our water system. This is the Industrial Park Water Tower Reconditioning. Um, we did receive bids on November 20th in a very competitive bidding market, which is always a good thing when we can say that. Um, we actually got seven bids from across the country on our water tower, so that's an excellent number for this type of a project. Um, those bids were also very competitive, which is also a good thing. Our low bid came in from Tanks, Inc. out of Decatur, Texas. Um, the bid was about 11% under our engineering estimate of $1.3 million. Um, we actually did have budgeted in 2025 $1.6 million, so we're well below the budget for this project. Keep in mind, there's some inspections and engineering and things of that nature that total all of the budgets; the construction cost is not the only thing, but this gets us under um, all those components and looking to reduce money on what our budget is in 2025, which is always excellent news. [15:35] Ryan Stempski: One thing I would like to point out, we did have an alternate bid in this project. That alternate bid was sort of a pre-planning of value engineering. So in case the bids didn't come in this competitive and we needed to take something off the project, we were working on an alternate bid that for the interior dry part of the tank, we would do a lot less work. So we would just focus on the really bad areas and fix those and leave the rest of the interior side of the tank. So that was a methodology to save some money if there was a value engineering. Obviously, the areas we don't touch up would be something that we'd have to monitor over the years, and it's not the way you like to complete a project holistically, but it was in there for that purpose if you were wondering what the alternate bid was. We are not recommending the alternate bid tonight. We are recommending the total base bid, which includes the complete interior dry coating, it includes interior wet components and all the exterior coatings. And like we talked about in the plans and specs, all the structural upgrades—we're putting a mixer in this tank, all the lights are getting upgraded to LED components, new aviation lights, all the railings are going to get redone. So um, this is a complete project in the total base bid. So with all that, staff is recommending award to Tanks, Inc. out of Decatur, Texas, in the total base bid amount of $1,153,000. I'll stand for any questions. [17:01] Mayor Mary Fasbender: Thank you, Ryan. Any questions? Okay, Councilmember Haus. [17:05] Councilmember Angie Haus: Thank you. Um, I would like to make a motion to move forward with the base bid to Tanks, Inc. for the Industrial Park Water Tower Reconditioning. [17:21] Mayor Mary Fasbender: Thank you, Councilmember Haus. There's a motion on the table. Councilmember Leifeld has a second. Any discussion, Council? Ryan, I just have a question just for the audience and for ourselves, just to kind of remind us: this project, when it does happen, how long is the process? [17:47] Ryan Stempski: Uh, this process we're anticipating about three months. Um, you're going to see some other action that actually is already started, and that's by way of we need to take all of our wireless components on the top of the tower—antennas and such for our wireless providers—and they have to set up temporary poles. So they're already scoping out areas on the site to kind of get those components relocated. So there's a lot of prep work in advance that'll start even in the coming month here or so. Um, but really we can't take that tower offline and get to work until about April, and then it'll take about three months. Hoping to have that tower back online for the hot, dry summer season, which feels kind of nice to say right now. [18:31] Mayor Mary Fasbender: Well, I appreciate that update because we know Council's probably going to get questions like "what's going on with the water tower?" So there is a first and a second. Any other discussion, Council? All those in favor of the motion, state by saying aye. (Ayes). Opposed to that motion, state by saying nay. And that motion prevails. Thanks, Ryan. [19:01] Ryan Stempski: Thank you. [19:03] Mayor Mary Fasbender: We also tonight have a public hearing for the Truth in Taxation for the 2025 budget. And for this item, we will have an introduction by our Finance Manager, Chris Eitemiller. Welcome, Chris. [19:15] Chris Eitemiller (Finance Manager): Ah, good evening, Mayor and Councilmembers. Wait, oh okay, great, off and running. Here we go. So tonight is our public hearing for the 2025 budget. Uh, we are here to present the budget to the public and to receive any comment that the public may offer. Uh, one thing we are not doing tonight is addressing market values. That is a process done by Dakota County in the spring, so that is usually a question we get from people about their valuations, but that needs to be addressed to the county. Uh, we're asking that the Council, should you be comfortable tonight, to adopt the final budgets, levies, and CAP plans—or if not, if there's some additional information you might need or any change you might wish to see, then we must in fact adopt on the 16th, our next meeting. [20:10] Chris Eitemiller: Budget principles that guide us through our process here is kind of just a list of some things that sound like common sense sometimes, but not everybody adheres to these as they're going through things. But as we are going through to provide the city services that are really very much dependent upon by the public, we need to fund those services at adequate levels. And a part of that is being realistic with our revenues and also to retain adequate reserves to protect against any uncertainty that might happen throughout the course of the next year to year and a half. Uh, we need to demonstrate strong stewardship of our existing infrastructure—something very essential as we repair and replace our infrastructure and our equipment—and we have a long-term plan for those. We also provide support for our strategic initiatives and our core values when creating this budget. [20:59] Chris Eitemiller: Our budget begins in June with a Council direction with some work sessions. After we get beyond that initial step, then staff will prepare the proposed budget to address Council's goals and operational needs. Uh, the finance committee throughout the course of the summer will discuss the budget with departments, and then there will also be some Council workshops to discuss the budget. In September, we adopt our preliminary budget and max tax levy. And then after that, that's when residents will get their statements from the county for their estimated tax impacts. And tonight, of course, is the Truth and Taxation hearing. And then, like I say, either tonight or at our next meeting, we will need to adopt our budget and levy. [21:49] Chris Eitemiller: So what's in the budget? Starting with revenues, uh, we're proposing a $1.4 million increase in our tax levy, and that's a 7.5% increase. Annually, it works out to $106 on the median-valued residence, which is just over $313,000—$8.83 a month if you're into as much detail as most of us accountants are. Our tax capacity growth accounts for about 5% of that overall increase. Our 7.5% rate increase is similar to what many other cities here in Dakota County are considering as well. And as far as our tax rate, this is an increase of 3.3% from 55.3 to 58.6. Some other big changes, or at least items of note from the revenue side: Local Government Aid this year, uh, we did not really see much of an increase. We didn't see a decrease, but it went up $3,928. So that doesn't go very far as we're looking at increased costs as we plan for the next year. Our Municipal State Aid construction revenue annual allocation decreased by $350,000. And in working with the building department, we're forecasting a decrease of about $30,000 in building permit revenue—it's something that's has to slow down at some point; we've had a few years where things were going pretty hot and heavy for the building department. [23:26] Chris Eitemiller: We're using one-time revenues responsibly within our fund balance policy to fund some one-time expenditures. Uh, half a million dollars will be coming from general fund reserves, another $65,000 from the Parks and Aquatic Center reserves. We've got $327,000 of dedicated cash reserves that we're going to use for facilities work. And then $550,000 of reserves from what we've already received from the state from MSA revenue, and we're going to use that as well. $550,000—we will get into the details on what those dollars are for in just a couple of slides. [24:14] Chris Eitemiller: For expenses, we have a few staff changes. We've got two additional full-time firefighter EMT positions being added in '25. This is the final two of the six full-time firefighters that we have been working to add, year three of three. So this has been a process to try and get the fire department's full-time staff up a bit higher per the needs that they've experienced. We're also adding an additional School Resource Officer, and that will be paid 50% by the school district. Then for employees, the cost of living adjustment is 3.5% for most, with some public safety positions scheduled to receive 4%. In the Public Works Engineering area, we have proposed a contract position for a part-time Project Manager to assist with their work in that area. Some other key areas where we had inflationary increases were Public Safety dispatch costs paid to Dakota County, maintenance contracts with our Technology department, and pothole patching. [25:34] Chris Eitemiller: Now on to our capital area for Capital Improvement and Capital Equipment plans. We wanted to continue to emphasize public safety infrastructure and maintaining our assets. To that end, we have included a new dump truck for Public Works at $300,000. And here is the $550,000 of the MSA reserves going toward traffic signal replacements. And then we're replacing 14 aging vehicles—included among that are three police squad cars. We also have a brush truck with a plow planned for the fire department, various facility maintenance repairs across our different facilities, and pool gutters for $200,000. These are all a lot of bigger-dollar items, very essential, but it's also worth noting that even with all this, there was $2.4 million in CIP and CEP requests that are not included in this proposed budget, and those needs won't go away, so those will be carrying forward into future years. [26:51] Chris Eitemiller: Bonding projects this year: we have the '25 neighborhood street project, $4.2 million, expected to be 2.3 million of GO bonds and 1.9 of utility revenue bonds. You can see the map there—we've got construction in red and reclamation in green. As most people have probably heard, a lot of PFAS is at front and center of our plans for the next several years, and we have a water treatment plant included at a total spending cost of $26.7 million. This is the first of three treatment plants that we are going to be required to build to meet federal law for treatment of PFAS and other contaminants. The plant will be funded in combination by revenue bonds which would be paid by water customers, an allocation from the 3M settlement, and a grant for planning and design. About $11 to $12 million of that $26 million will be paid by the revenue bonds, with the rest coming from those other sources. We will be working toward getting final numbers on that in the next few months as far as the split goes. [28:13] Chris Eitemiller: We'll be getting into the utility rates here in a bit. Um, so one carryover project approved in prior years was the City Hall dome renovation and HVAC system. This project started at about $3.4 million and is now at $5 million. The original plan was $2 million from the state bonding bill in 2020, I believe, and then $876,000 from our ARPA federal allocation, and then $520,000 from prior year expenses, some paid by a grant from the Historical Society and the rest from City's general revenues. Now this project is expected to be completed in 2025, and expenses eligible for the $2 million State of Minnesota grant have nearly reached the $2 million total. The city expects to receive reimbursement for those expenses in 2025. The remaining funds from the city's ARPA allocation will pay for most of these remaining expenses; however, included in the 2024 bond package was some money to help with closing that financing package, and current estimates call for about $412,000 applied to finish this project. [29:39] Chris Eitemiller: Utilities: um, the water rate increase at this time is proposed to increase by 10% in January, with another increase in July once the final costs and funding mix is finalized for that first water treatment plant. Sewer at 4.5% and storm water at 4% are following with the trend recommended in the 2023 rate study update that we saw recently. Some capital items in the utilities: we've got a couple of one-time expenses—as Ryan alluded to earlier, the water tower reconditioning project. We also have the hydroplant dewatering. There are a number of others, and the salt shed roof for storm water, and a lot of others that are recurring expenses just needed to keep maintaining the system, such as the sewer lining program, mill and overlay, the SCADA upgrade for water and sewer lift station and pump controls for sewer, and the water quality improvement project. Also including that, of course, as I alluded to earlier, is the utility portion for the annual neighborhood street project. [30:46] Chris Eitemiller: Just a summary here, high level, but 3.34% increase to the tax rate at a 7.2% increase—that is $20,490,930. 1% of the levy, if all this were approved, would equate to $204,909. This graph is just used to show a historical trend for the last 10 years. The bar portion of this that represents our tax capacity, the green line is our tax levy—more of a steady line of a slight increase from year to year. And then the tax rate is the line that starts in the upper left-hand corner and shows a little more up and down than the other two. These next few slides are courtesy of Dakota County, comparing Hastings with some of our neighbors. This is the average total tax percent change for residential homestead properties. Hastings at 1.25%—in the immediate area there you'll see a couple that actually decreased and others that went up by a similar amount, and then a couple where it went up quite a bit more, but the City of Hastings sits at 1.25%. [32:17] Chris Eitemiller: Then this next slide is the same comparison, only for commercial properties. Average tax percent change here, quite a bit different—you'll see, rather than 1.25%, Hastings at 7.89%. But again, you look around the area and these increases again are also quite a bit higher from residential to commercial in these other communities as well. One more slide here, just comparing market value changes across the county. Excuse me, the City of Hastings 0.16—we went from a median valued home of $312,700, I believe it was, to $313,300, so very little difference. And you'll see that playing out across the area as well—some small increases, some small decreases, and stuff on the higher end of things around 2 to 3%. [33:23] Chris Eitemiller: So, the other area, of course, is our economic development component unit, HEDRA. Their tax levy is set in statute as a percentage of our taxable market value, and for 2025, that amount is $537,500. There is a proposed spending budget of $1,331,000, and the HEDRA fund balance reserves are targeted as the funding source for anything not covered by the levy. So next steps: we've got tonight's hearing and then either tonight or in our next meeting, we need to adopt the budget and levies and the utility rates. Tonight we also need to have the first hearing for our fee schedule changes, and then on the 16th we would also have the second hearing for that—for the fee schedule as well. And I believe that's it. I'd stand for any questions you may have. [34:30] Mayor Mary Fasbender: Thanks, Chris. Uh, first let's do the public hearing, and then after that, if Council has any discussion, we can go that route. At this time I would open the public hearing. If anyone wishes to speak to the Council at this time about the levy? Looking also for raised hands on Zoom. Nobody on Zoom. One more time, anyone? Yes, if you wish to speak, you could step to the podium please and state your name and your address. [35:04] Bernie Willheight (Resident): My name is Bernie Willheight. I live in Cottage Grove, but I'm here with my 90-year-old mother who has lived down here for quite a few years. Uh, a question that I do have—and by the way, nice presentation—um, with all of the commercial buildings, the apartments and different things like that, I was surprised at the numbers that you were showing that were kind of going down and then went back up in that maroon line. I would think that all that commercial building would have kind of offset some of that. [35:46] Chris Eitemiller: Yeah, that was the tax rate, and it just kind of all... there's a lot of factors involved there just based on information we get from the county with evaluations as well as... [35:54] Bernie Willheight: Because I know it's a pretty sizable apartment complex that's down there by where the old Walmart used to be and stuff, and I didn't know if that was, as sometimes happens, if that was done with tax increment financing that it doesn't seem to be helping or just kind of curious. Like I said, just because I've gone through this stuff up there in Cottage Grove too. [36:22] Mayor Mary Fasbender: Okay, thanks for your question. Um, Chris, do you want to can you answer to that or... [36:28] Chris Eitemiller: Uh, no, I was just gonna come to stand by a microphone if I was going to talk more. [36:34] Dan Wietecha (City Administrator): I'm not sure what was picked up on the microphones or not. Uh, the properties are valued by Dakota County. Uh, although seeing a large building go up is very visible and certainly does have a positive impact on our tax capacity, um, it may not be as much as you might expect, particularly as a percentage of the entire tax base across the entire city. Um, the apartments that you inquired about on the south end of town do not—did not—utilize tax increment financing. [37:18] Mayor Mary Fasbender: Thanks, Dan. Any other questions? Council, or I'm sorry, we're still in the public hearing. And no one on Zoom. Okay. At this time I will close the public hearing and open discussion for Council. Council, any discussion? Okay, Councilmember Fox. [37:37] Councilmember Fox: Thank you, your Honor. Um, I just want to speak on behalf of the finance committee. We have worked diligently, like Chris was saying, since about June, a little before that, to make sure that we are thinking through this process. This is never an easy conversation that we have. Councilmembers Leifeld and Chair Vihrachoff are also on finance and I'm sure they will speak to it as well. Um, but we diligently have conversations about how we balance this out when we have to pay for the resources. We want to keep our residents safe and successful and keep our community vital. Um, and trust us, we go through a lot of disagreements and a lot of "well, actually" in the meetings. And we really believe in the work that Chris and Ashley do on our team, but we also believe in the work that the directors of our departments do. And we trust that when we need a new water tower or to recondition a water tower, um, we need to figure out how to pay for that so we can continue to service our community. That's just one example, but this is not an easy discussion and it takes almost all year. So uh, thank you for your information today, Chris. My favorite slide is the one with the three boxes—that I think is really plain-language information about how we share these resources and break it down. So thank you. [38:55] Mayor Mary Fasbender: Thank you, Councilmember Fox. Any other... Councilmember Leifeld. [38:59] Councilmember Lisa Leifeld: Thank you, your Honor. So to Councilmember Fox's point, this is a long process. I often in something this big remind myself that I'm an elected official—I'm here to speak on behalf of the community. Um, I am a single-income household as well, so understanding that this affects all of us, right? Um, so when water rates go up or when their taxes go up, it's not something we go into lightly as previously mentioned. Uh, understanding that in the last six, seven, eight years now, I've learned a lot more about where everything comes from, right? I guess I just sort of bought my groceries and turned on my light and flushed my toilet and everything just sort of worked out for me. And then I got here and found out what it cost to run a community. And I'm ever impressed by the knowledge that we have in our staff, right? In our administration. And again, I am often saying I am going to defer to the specialists. I'm a mom and I'm a resident and I manage a bank, and I'm not an accountant, I'm not an architect, I'm not, you know, an engineer. So this is something that our team and our staff takes very seriously. To the point that, you know, you remember your Christmas list and you circled all the things you wanted and then your parents were like, "No, go back and show me what you really need." We do that here, right? We do that with our staffs, and they come back to us and it's like, "Well, we absolutely need this, we'd like this, but I get it that that's not in the budget." [41:02] Councilmember Lisa Leifeld: So understand for the community that's listening, if in a world where we didn't have to raise taxes, we absolutely wouldn't. So this is something necessary, as Councilmember Fox said, to keep our community thriving and safe and make it a welcoming place where people want to continue to live and bring their businesses too. So um, to that, your Honor, thank you. Um, but to Councilmember Fox's point, um, I appreciate you bringing that up. It's hard when something this big comes up and we all just vote and no one talks—it's not because we're not talking, it's not because we're not concerned. We're all very passionate and very concerned, but we've been talking for a long time about this. So I appreciate you're taking the moment, Councilmember Fox, to say something to that effect. Thank you, Honor. [42:01] Mayor Mary Fasbender: Thank you, Councilmember Leifeld. Councilmember Vihrachoff. [42:04] Councilmember DawnMarie Vihrachoff: Thank you, Mayor. Um, as usual, I think that my colleagues, Councilmember Fox and Councilmember Leifeld, put it absolutely beautifully. There's so much behind-the-scenes work that goes into this. This is such a Herculean effort that goes into proposing and then passing this budget. I'm incredibly thankful to you, Chris, your team, and to city staff led by Dan as well. Um, as you said, Councilmember Leifeld, this is hard—it's a hard thing to do when we are here on behalf of our constituents. It's simply our job to represent their interests and their wishes. Um, I often before some other difficult votes I might say something like, "Well, that might not be necessarily how I would vote on something, but that's not what my constituents elected me to do." And so um, but that is not the case tonight. This to me feels like a thoughtful city budget that serves our community to the best of our ability. I appreciated your comment as well, Councilmember Leifeld and Councilmember Fox, about us going back to city staff and saying we've got to make cuts. We know that we have to deal with our water crisis and PFAS in our water, and we simply have to do that. And I'm incredibly grateful for the thought and energy that city staff put into this. Um, I think that this is an incredibly helpful, mindful budget that serves our community very well. Um, and I would like to propose, if Council is comfortable, Mayor, if we could make a motion to approve this resolution this evening? Would that be appropriate? [43:53] Mayor Mary Fasbender: Thank you, Councilmember Vihrachoff. [43:56] Councilmember Lisa Leifeld: Second. [43:58] Mayor Mary Fasbender: Thank you. And I would have a second by Councilmember Leifeld. Sorry, any other discussion? I will just add to a "thank you" to all the department heads and all the work, hard work, that you have done taking our thoughts into consideration and making those priorities for our community because it is appreciated. Any other discussion, Council? Okay, all those in favor of the motion, state by saying aye. (Ayes). Opposed to that motion, state by saying nay. And that motion prevails. On that same note, Council, um, I would also accept a motion to adopt a resolution approving a final 2025 HEDRA HRA special levy. [44:26] Councilmember Fox: I'll make a motion. [44:27] Councilmember Dave Pemble: Second. [44:31] Mayor Mary Fasbender: Councilmember Fox, thank you, and Councilmember Pemble, first and a second. Any discussion, Council? All those in favor of that motion, state by saying aye. (Ayes). Oppose that motion, state by saying nay. And Council, I would accept a motion for a resolution adopting the 2025 to 2029 Capital Improvement Plan (CIP) and Capital Equipment Plan (CEP). [44:54] Councilmember DawnMarie Vihrachoff: So moved. [44:55] Councilmember Angie Haus: Second. [44:58] Mayor Mary Fasbender: Councilmember Vihrachoff, Councilmember Haus a second. Discussion, Council? All those in favor of the motion, state by saying aye. (Ayes). Opposed to that motion, state by saying nay. And that motion prevails. Finally, Council, I would accept a motion to a first reading to consider an ordinance, the City of Hastings, Minnesota, amending Chapter 34 of the Hastings City Code pertaining to fees for municipality services. [45:26] Councilmember Dave Pemble: So moved. [45:27] Councilmember Angie Haus: Second. [45:31] Mayor Mary Fasbender: Councilmember Pemble so a motion, and Councilmember Haus has a second. Any discussion, Council? All those in favor of the motion, state by saying aye. (Ayes). Opposed to that motion, state by saying nay. And that motion prevails as well. Thank you, um, finance and all department heads, Dan, Kelly, thank you. Council, okay, tonight under Community Development, we will have a second reading to adopt the ordinance to amend city code chapters 34, 95, 98, 117, and 155, Cannabis Regulation. And for this item, we will have our attorney, Counselor Corey Lunn. [46:17] Corey Lunn (City Attorney): Thank you, Honor, members of the Council. I hope this is the last time I have to mention cannabis this year. Let's hope so! But this is the final reading, culmination of all of the hard work that we've been putting into all of the different cannabis uses, appropriately putting them into your community and allowing businesses, if they want to come here, to know the rules when they come here. So just to briefly give an overview for the public, because I know the Council probably knows this by heart by now, but we have, as the Mayor said, four different ordinances in front of you. [46:51] Corey Lunn: There's the zoning ordinance which properly puts the business uses or the uses into the zoning districts as we've discussed. There are some buffer zones applying to some of the uses but not all of them. Just to go through what those uses are again for the public to know: we have the Lower Potency Hemp Edible retail, which is what is currently legal in the city, and we have several licenses and conditional use permits for those uses that exist today. There's kind of two camps of those: one is the beverage version, and that can be sold at any place with a liquor license on- or off-sale, and they won't have any buffer restrictions, they won't have any zoning approvals that they need to have. Some of them already do, but they won't need them in the future. But they will be required to get a license from the Office of Cannabis Management and they will be required to register with the city. [47:45] Corey Lunn: The other camp of lower potency edibles are the products that are being sold basically by another retail business, such as a tobacco store. And those again will not be required to get a separate zoning approval, but they will still be required to register with the city. Oh, I'm sorry, they will be required to get a conditional use permit. See why this is so confusing? So I apologize, they still will be required to get a conditional use permit—if they already have one, it will continue. Adult Cannabis Use retail, which is commonly known to the public as a dispensary—the Council was very, I think, very business-friendly trying to open up your commercial corridors along your freeways or your highways which are the busiest areas of your community to allow these businesses to locate in any one of those zoning districts along Highway 61 or 55. They will need a conditional use permit and they also will need to register. [48:47] Corey Lunn: The other kinds of businesses are more in the industrial park type uses: the manufacturing, the processing, warehousing of cannabis, and those can all be located in the Industrial Park, again with some buffer zones, and they will be required to get a conditional use permit and register with the city. And then finally, cultivation will obviously be allowed in any agricultural district without any kind of a buffer from other uses except for the thousand-foot restriction between them, and they also will be required to register with the city. Why do we require registration? Because for those on-sale businesses, we will be conducting compliance checks, and for the other ones, we just need to know they exist so there might be some spot-checking that goes on to make sure they're complying with the zoning ordinances. But we just need to recognize that they do exist in our community. [49:35] Corey Lunn: The city code amendments involve a registration ordinance as I've discussed. The registration ordinance will simply be kind of a very non-controversial check-the-box kind of application. They will just have to comply with the zoning regulations, so we just check the box if they've obtained a conditional use permit if need be, and they're in compliance with all of the other zoning regulations. They will have to pay their application fee, they will have to have a license from the Office of Cannabis Management, so we'll just make sure that we can check those boxes and they will be issued a registration. The cannabis event organizers—kind of a special category that is not required to register, but we still need to know about them, so they'll be required to get a permit from the city for each event. [50:18] Corey Lunn: Now, there's this kind of no-man's-land between when the Office of Cannabis Management is actually ready to issue licenses and now. So we have several businesses, as I indicated, who are already selling low potency products. So what do they do in the meantime? We've said that they need a license from the Office of Cannabis Management, but they can't get one. So what we've written in words in the bottom of the ordinance—which is not going to be codified, it's not going to actually go into the city code, but it's sort of how we're going to process this kind of in-between time—is any business that currently has a license will be required to renew that license and they will pay the appropriate fee, which is the same fee that they would have paid for an initial registration fee. So it won't be any more than what they will pay tomorrow once the Office of Cannabis Management is licensing them. So they will pay to have a new license, then when the Office of Cannabis Management is issuing licenses, they will be required to come to the city and say, "Hey, now I have my license, may I please have the registration term be consistent with that license term?" So it's going to be in effect a little bit longer than probably the normal calendar year that we do now because we don't know when that's going to happen. So if it's in March, their new renewal for their registration would be the following March, and at that point they would have to pay the renewal fee for that. We're hoping that works—there really isn't any rules or regulations from anyone telling us how to do this in-between time, so that's what we're proposing. [51:49] Corey Lunn: The next ordinance amendment is looking duplicative than the one you just adopted on first reading, which is the fee ordinance. We weren't sure how the timing was going to work out with the full-blown fee ordinance amendment and these fees, which we need to make sure are in place by the end of the year. So we were just kind of having... belt and suspenders, I call it. So it looks like the same ordinance, it might sort of have some components of the same ordinance, but this is the fee ordinance amendment specifically related to cannabis and low-potency fees. Then finally, the final ordinance is an odor ordinance, which is kind of a tangent. Just the timing seemed to be right because we know that the cannabis businesses tend to put off a little bit of an odor. You don't have an odor ordinance; we have a lot of other ordinances regulating nuisances. It felt like the appropriate time to put this one in place. So that's what that ordinance is. So, your Honor, this is a second reading. It doesn't require a public hearing—that was held at the Planning Commission for the zoning application—so I am requesting that the Council adopt all four for their final reading. [52:50] Mayor Mary Fasbender: Great, thank you, Counselor. Council? [52:54] Councilmember Fox: Just as a point of order, are we able to approve all four at once? Okay. Um, I move to approve the amendment to the city code chapters 34.03, 95, 98, 117, and 155. [53:14] Mayor Mary Fasbender: Thank you. Second? (Seconded). There is a second. Discussion, Council? Again, I'll just make a comment to thank the Counselor and all the commission and committee meetings that took place to make this purposeful for our community. Councilmember Leifeld? [53:40] Councilmember Lisa Leifeld: A question, your Honor. Counselor, so on page two of the packet that we are looking at here, it states under zoning and city code: "Buffer zones for cannabis uses and there's a thousand feet between cannabis uses, 500 from a school, residential treatment facility property, and from attractions." Then it goes on to talk about buffer zones... are you looking where I'm looking? Okay, thank you. "Buffer zones for lower potency hemp edible, okay, 500 feet and then no other distance." And then it talks about adult use cannabis retail dispensaries. What is the "cannabis uses" piece directed towards? I don't exactly know what you mean. [54:26] Corey Lunn: Okay, so my question being... yep. "Cannabis uses"—but then the next page goes into "adult use cannabis" has a thousand-foot buffer from schools and 500 from parks and attractions. So it's a bit different than the buffer zones for "cannabis uses." They're the same thing. They... so I was trying to generalize the buffer zones because obviously there's some nuances that we have with each use. Generally speaking, the cannabis uses, which is the adult version—the over 3% THC—has these distance restrictions. But then the dispensaries have specific distances from the park attractions, as you know. And we also actually put in the um, the highway bumper, I call it the bumper to the buffer. So I didn't get into all of the specifics about each of the uses, but it's intended to be a generalization that we did put in buffer zones, but you'd have to really dive into the ordinance to find out specifically which buffer applies to which use. [55:38] Councilmember Lisa Leifeld: Thank you, that helps. [55:41] Councilmember Fox: Just as a point of clarification, um, that... just for the listening public who probably doesn't have the packet open in front of them, this is just like a brief summary of what we've already discussed. So I just want to be clear that the ordinance is deeply specific and we have spoken about that a lot, even on the dais. So I just wanted to tell everybody listening what we're talking about. [56:06] Mayor Mary Fasbender: Thank you, Fox. There is a first and a second. Any other discussion, Council? All those in favor of the motion, state by saying aye. (Ayes). Opposed to that motion, state by saying nay. And that motion prevails. Thank you. Uh, tonight we have a resolution for a minor subdivision at 1915 Eddy Street. And for this item we have an introduction by Community Development Director John Hinzman. Welcome, John. [56:40] John Hinzman (Community Development Director): Thank you, Mayor, City Councilmembers. As the Mayor pointed out, we have a resolution before you for a minor subdivision or a lot split of the property shown on the screen here at 1915 Eddy Street. This is a vacant property. This is what they're proposing to do: to essentially split the property in half to build a side-by-side slab-on-grade townhome, so it would be a duplex. However, the property line would run through the middle of the structure itself, so it would be 33 feet wide on each end of it. The proposal does meet all the zoning qualifications. We did have a public hearing and Planning Commission review of this at the November 25th meeting. Planning Commission did recommend approval on a 5-to-0 vote. Although we didn't have any specific comments during the public hearing, we did receive two comments prior to the meeting. One in opposition to the split—the lot was too small to be split was his concern, and concern of potential low-income housing, this should be kept as one lot. And then just another general phone message that stated opposition to the duplex. So that is what we have before you tonight—recommendation from the Planning Commission and staff for approval of the lot split minor subdivision subject to the conditions of the resolution. Thank you. [58:00] Mayor Mary Fasbender: Thank you, John. Any discussion, Council? If not, I would accept a motion. [58:05] Councilmember Lisa Leifeld: So moved. [58:06] Councilmember Dave Pemble: Second. [58:10] Mayor Mary Fasbender: John... Councilmember Leifeld with a second by Councilmember Pemble. Discussion, Council? All those in favor of the motion, state by saying aye. (Ayes). Opposed to that motion, state by saying nay. And that motion prevails. Thanks, John. [58:32] John Hinzman: Thank you. [58:34] Mayor Mary Fasbender: Tonight, under Administration, it is the first meeting of the month already and we will have a PFAS update from our City Administrator, Dan Wietecha. Dan, welcome. [58:45] Dan Wietecha (City Administrator): Thank you, Mayor. Uh, this is just informational, no specific action on this, and actually even some of it might be action that Council took a couple of weeks ago. But monthly update: try to keep it all in one place and make sure that we are... um, many moving pieces to this PFAS subject and trying to make sure that we're keeping it front and center so that the public is aware of our ongoing discussions. Key highlights: State Bonding, State Capital Budget, the State Bonding Bill. We anticipate applying uh, for State Bonding. Obviously, we don't have a decision on whether we get that funding or not, but we certainly want to pursue it. Last meeting, the City Council indicated that clean and safe drinking water continues to be the city's number one legislative priority. We are ready to submit that application this week, and one part of that process will be a Council resolution of support, which happens to be a few minutes later on tonight's agenda. [59:44] Dan Wietecha: We also, again seeking funding, uh, earlier this year submitted our project—broken into a couple of phases—but we submitted it to the state's Project Priority List. Um, quite honestly, some of that is not really our preferred source of funding because it's a loan and we can do that on our own, but it might be a little bit better interest rates. It's also just important to go through the processes—we keep saying everything's on the table, we're looking under every stone. We can't just ignore it because it's a loan. But the other key piece to it is that same application process includes the state Emerging Contaminants Grant, which could be $3 million for each the Eastern plant and the Central plant, so $6 million total. Last week, learned that the draft list has the Eastern plant ranked as number two in the state, and the Central plant appears to be tied at 13th in the state, and both listed as "fundable emerging contaminants." So we've not received an official word, but it certainly looks positive that we could be getting $6 million in grants towards those in the next couple of weeks as the state finalizes its listing. [1:01:21] Dan Wietecha: Also, the less fortunate piece of the funding is voted earlier this evening, is the water rates. And up until just a month, month and a half ago, we were looking at a 37% increase January 1st—just the reality of this being an expensive project. That 37% actually would be the first phase of several years of increases. When we in mid-October got funding or eligibility for funding through the 3M settlement for one of our wells, one of our treatment plants, we were able to adjust our construction schedule but also look at our water rates. So instead of 37% in January, we're proposing to do a two-step increase: the first step being 10% January 1st, the second step to be mid-year depending on construction costs, the actual amount of 3M settlement dollars we receive, and if there's other grant funding such as that $3 million emerging contaminants grant. So that second step could be between 4 and 12%, but to be determined. We're certainly hoping to drive it towards the lower end, but we didn't want to be over-increasing the rates if we didn't need to, and trying to really phase us into what's needed for the project. So that's why it's a two-step piece. [1:02:51] Dan Wietecha: And noted earlier with the budget, you have the first reading of the fee schedule this evening, which includes that 10% increase. The second reading is scheduled for your next meeting, December 16th. Um, mentioned the eligibility for the 3M settlement: we have submitted our first application for settlement funds to cover the cost of the land purchase on North Frontage Road as well as estimated costs for business relocation necessary with that Central Treatment Plant. And want to note that in the meantime we continue to work with the Minnesota Pollution Control Agency (MPCA) for environmental investigations that hopefully will determine connections for the other wells, and with that, believe there would be eligibility for additional settlement funds. [1:03:52] Dan Wietecha: The other notable piece is not directly funding, but mentioned the Central Water Treatment Plant. Um, by moving forward with this plant, if you might recall, initially we were planning the Eastern plant over in the Industrial Park. With funding towards this, the Central one, it made sense to—let's follow the money, let's go with the one that has some significant outside funding. It means, as noted, a smaller rate increase instead of 37%, we're talking 10% plus a second step later in the year, and it gives us additional time to seek funding for the other plants—State Bonding dollars or other grants or the environmental investigations hopefully finding a direct connection. [1:04:47] Dan Wietecha: But the treatment plant—the Central Water Treatment Plant—at our last meeting, November 18th, the Council approved a purchase agreement to acquire land. Key to that site is that it is in a non-residential location. It is next door to existing water infrastructure with our nitrates treatment facility and ground storage reservoir. It also has lower incremental cost than other sites that we had looked at. And very importantly, just the timing and ability to proceed without delay is extremely important because we are on a tight schedule over the next couple of years to complete this project. And we anticipate contracting with SRF Consulting to assist with the business relocation analysis for the two businesses currently at that location, wanting to work with existing businesses and make sure they can continue to be successful here in Hastings. Quick overview of the highlights of the past four weeks—some might sound like a repeat because we've talked about it in prior meetings, but trying to keep all the moving parts in a single memo here. With that, I can take any questions. [1:06:17] Mayor Mary Fasbender: Thanks, Dan. Council, any questions? Okay, as Dan stated, it is just an update. Under Administration as well, we have an application for the State Bonding Bill for the Eastern Water Treatment Plant. So Dan, you may continue—back to PFAS, we didn't get away for long. [1:06:40] Dan Wietecha (City Administrator): This one is an action item. Um, we certainly in talking with legislators last session heard loud and clear that asking for $70 million is too much and that we would need to break this into phases and, you know, apply for a phase at a time. The difficulty is the timing of the legislative sessions and our anticipated construction schedule don't match up. So what we're looking at is probably applying for two phases. Um, this one proposed tonight, the first one, is the Eastern Treatment Plant. And then anticipate in a future legislative session coming back and applying for funding for the Western Treatment Plant. Just the timing doesn't match up to be able to seek funding for the Central one, but luckily with the 3M settlement dollars towards it, it has less of an immediate burden associated with it. [1:07:54] Dan Wietecha: So what's proposed here is the Eastern Treatment Plant for both PFAS and nitrates removal. As I noted earlier, the City Council at its workshop in November identified that the City Council's number one legislative priority is clean and safe drinking water. This allows us timing for the Eastern Treatment Plant, Treatment Plant number one, have the construction schedule match up with the anticipated schedule for State Bonding dollars. Recognize it's an application—it does not mean that we're getting the money, but we're applying. Currently, the estimated construction cost for this plant is $20.6 million. We've already received $1 million in planning and design grant. Additionally, we have applications for federal Congressionally Directed Spending towards it, and as I alluded earlier, the emerging contaminants grant is also pending towards this project. And we also seek connection to the 3M settlement eligibility. In the end, where we're currently at: $20.6 million minus the $1 million grant we've already received, we are requesting $19.6 million in state bonding. As we go through the legislative process, they might try to reduce that amount, but we figure it's better to start with the full amount rather than negotiate against ourselves and trying to cut it in half or anything like that. With that, we recommend this resolution, and if or when passed by Council, we will submit the application to the state later this week. With that, I can take any questions. Thank you. [1:09:34] Mayor Mary Fasbender: Thank you, Dan. [1:09:35] Councilmember Lisa Leifeld: Yeah, I'd like to make a motion to approve the resolution for application for State Bonding request for the Eastern Water Treatment Plant known as WTP-1 for PFAS and nitrate removal. [1:09:56] Mayor Mary Fasbender: Thank you, Councilmember Leifeld, and a second by Councilmember Haus. Any discussion, Council? All those in favor of the motion, state by saying aye. (Ayes). Oppose that motion, state by saying nay. And that motion prevails. Okay, any announcements, Council? Councilmember Leifeld? [1:10:19] Councilmember Lisa Leifeld: I have one, your Honor. Um, on behalf of the City Council and staff, I'd like to extend a very, very special birthday wish to our Mayor, Mayor Mary, who will be celebrating, I believe, her 30th birthday this Saturday, December 7th. Happy birthday, Mayor! [1:10:45] Mayor Mary Fasbender: Thank you! And we were concerned that you wouldn't announce that, so thank you. I appreciate it. As it is on Pearl Harbor Day—it was not the year of Pearl Harbor, so just tell you that, maybe Councilmember Pemble's birth year, but... All right, other than that, I do have a few announcements. The Hastings Prescott Arts Council annual gala and silent auction is Sunday, December 8th. You can attend in person or online, and just so you know, the silent auction is up and running at this time. Enjoy the CPKC Holiday Train and free holiday concerts by The Lone Bellow and Tiera Kennedy on Tuesday, December 10th. Please bring food or a monetary donation for Hastings Family Service. Hastings Police Department and City Hall are drop-off locations for Police Lights of Christmas toy drive—please bring an unwrapped toy by December 6th. [1:11:51] Mayor Mary Fasbender: City offices will be closed 11 to 1 on Thursday, December 12th for the City employee holiday party and staff recognition. Recycle your old lights with the Hastings Holiday Lights drop-off collection. Residents can drop off their unwanted strands to the Joint Maintenance Facility at 920 10th Street West during the holiday season from November 15th to January 31st. Meetings: 7:00 PM Operations Committee meeting Monday, December 9th. Planning Commission meeting for Monday, December 9th, has been cancelled. Wednesday, December 11th, 6:00 PM, Arts and Culture Commission. The Parks and Rec Commission meeting has been cancelled. Thursday, December 12th, there is a 6:00 PM HEDRA meeting. And Monday, December 16th, 7:00 PM, City Council regular meeting. With that, I would stand for a motion to adjourn. [1:12:47] Councilmember Dave Pemble: So moved. [1:12:48] Councilmember Tim Lawrence: Second. [1:12:51] Mayor Mary Fasbender: No discussion? All those in favor of the motion, state by saying aye. (Ayes). Oppose to that motion, state by saying nay. And we are adjourned.