With no action by Legislature last year, plan sees big cost increase

It’s been practice of the Legislature to address capital projects with large bonding bills in even-numbered years.

That didn’t happen in 2022, leaving two large-scale Hastings projects that had been included in the bonding plan in limbo after the Legislature failed to act on recommendations from Gov. Tim Walz.

Walz has the two Hastings projects – extensive work at the Hastings Civic Arena and rebuilding the Hastings Veterans Home – on the 2023 plan. Walz’s office last week released a plan for $3.3 billion in projects statewide, noting that the capital project list is virtually similar to a year ago. The proposed dollar amounts are higher, with increased costs of labor, supplies and construction equipment. Minnesota Management and Budget officials figure the delay added 20% to the cost of projects.

The governor’s proposed 2023 infrastructure plan would fund projects across a variety of areas, including:

•$1.2 billion for asset preservation, including a combined $316.24 million for the University of Minnesota and Minnesota State system and almost $133 million for the Department of Natural Resources;

•$651 million for roads, water systems and bridge replacement;

•$524 million focused on community and equity to send funding to areas traditionally excluded from capital investments. Some projects could include community centers or public safety buildings;

•$474 million to address housing and homelessness; and

•$312 million for projects to preserve the environment and mitigate effects of climate change, including a $72 million investment in bus rapid transit programs and $24 million in flood hazard mitigation.

The governor’s recommendations propose funding infrastructure projects with $1.9 billion from general obligation bonds and an additional $1.4 billion in other financing, which includes:

•$699 million in other cash investments;

•$250 million in appropriation bonds;

•$200 million in equity focused cash investments; •$168 million in trunk highway bonds; and

•$58 million in user-financed bonds.

Hastings Civic Arena

Hastings City Administrator Dan Wietecha said that the bonding would pay for half of the renovations proposed at the Hastings Civic Arena, 2801 Red Wing Blvd., which houses two sheets of ice. It’s home to the Hastings Raiders hockey teams and the Hastings Hockey Boosters. It also is used by Riverblades Skating School.

Last year, the governor included $1.46 million in his bonding plan for the arena. This year’s plan calls for a $2.235 million grant, half of the expected $4.47 million project cost. The project plans are to replace the west rink roof, install rooftop solar panels and convert the refrigeration system.

Hastings City Administrator Dan Wietecha is hopeful for legislature approval of the proposal.

“I’m definitely hopeful. I know last year our project was well-received by the House committee. It certainly was a nice boost having the governor recommend it last year,” Wietecha said. “It’s sort of a reset. We’re in the next year, and nothing was acted on. It was a good project last year. It’s nice having the governor’s office recommend it again, and that’s with a significant cost increase. It’s the same project, but the price went up significantly.”

The Legislature likely will be pressured to act this year, given the number of infrastructure projects needed, and escalating prices if projects are continually pushed down the road.

“There’s some pent-up demand. They didn’t do projects last year. There’s pressure to do projects this year and do good projects. That’s in our favor this year too,” Wietecha said.

Having the help of state bonding will help Hastings as it works to handle other infrastructure projects annually and plans for bigger things down the road.

“A few years out, we’re looking at city costs with the MnDOT Hwy. 61 project. How do you add shares of a MnDOT or city project on top of what we’re doing and fit in another local asset like the arena?” he said.

The project would replace the roof over the west rink, which has leaking issues.

“It needs to be replaced to ensure the integrity of the building,” said Wietecha.

With the roof being replaced, the decision was made to plan for installation of solar panels that will either be used to offset energy use in the facility or sold back to an energy provider.

The refrigeration plant would be replaced. The existing system is out of date.

“The system that’s in there now, there’s changes in the law that make it unfeasible for repairs in the long run. Upgrading it also makes it more energy efficient, which is nice,” Wietecha said.

Wietecha is hoping for approval from the Legislature this spring. That would prepare the city for construction starting after the hockey season in spring 2024 with completion in fall of that year.

“The equipment we need to order has a 10month lead time. If we get state bonding this spring, we essentially would be pulling the trigger on ordering some of the long lead time equipment now but taking delivery of that equipment and starting in spring of 2024 and completing by fall of 2024. That way, we still have a fully operational ice arena and two sheets of ice for the season.”

Hastings Veterans Home

Seen as a critical need, the governor recommended $77.765 million to replace the facility that houses the Veterans Domiciliary Program at the Veterans Home in Hastings. The Domiciliary Program provides an independent living environment to eligible veterans and spouses who need assistance managing clinical, mental health, financial situations or social well-being, according to the Minnesota Department of Veterans Affairs.

The improvements would provide updated facilities with private rooms and bathrooms, as well as more program and treatment spaces.

The bonding plan was presented to the House Capital Investment Committee by Minnesota Management and Budget Commissioner Jim Schowalter Jan. 30.

“There’s a growing demand for infrastructure in our state,” Schowalter said. His office received almost $5.5 billion in requests from state and local governments, as of last January.

The committee took no formal action on the governor’s proposal at the meeting.