Minnesota communities hope bonding bill will address infrastructure needs

When Minnesota lawmakers adjourned last year without passing an infrastructure plan, Hastings officials had to find another way to pay for the crushing cost of ridding the city’s drinking water of forever chemicals.

They raised water rates for the east metro community by 10% in January. City Administrator Dan Wietecha said if Hastings doesn’t get state support, it may have to keep increasing bills — between 8% and 12% this summer, 37% in 2026, 33% in 2027, 17% in 2028 — to finance the ongoing cost of addressing the water pollution.

All told, Wietecha said, the community could see water rates rise 2.5 times compared to 2024 by the time it finishes constructing new water treatment facilities.

“We’re going to just get pounded year after year,” Wietecha said.

Hastings hoped to receive money for its projects from the state last year, but the Legislature did not pass an infrastructure bonding package before lawmakers left St. Paul in May. The Dakota County city and others across the state were left without support for a host of projects and are hoping for better results this year.

All told, local governments across Minnesota requested $2.9 billion for projects from the bonding bill. State agencies requested $4.7 billion. Projects ranged from a new Mankato lab for the Minnesota Bureau of Criminal Apprehension and a new jail for Beltrami County to the removal of lead water pipes and improvements for bridges and recreational areas across the state.

Lawmakers were hearing “some pressure from our communities,” said Sen. Karin Housley, R-Stillwater.

“And rightly so,” she added, “because they do need help, and we are trying to get them that help.”

State Rep. Fue Lee, DFL-Minneapolis, co-chair of the House Capital Investment Committee, said updating the state’s infrastructure is essential. Minnesota doesn’t need another emergency like the Interstate 35W bridge collapse in Minneapolis in 2007, he said.

“I think there are many critical projects that we don’t really think about [and] are really in need of funding and we need to act urgently,” Lee said.

Hastings is one of several east metro communities where drinking water is contaminated with perfluoroalkyl and polyfluoroalkyl substances, or PFAS, chemicals associated with developmental delays in children, an increased risk of certain cancers and reduced fertility. The compounds are known as forever chemicals because they don’t break down naturally.

Last year, the Environmental Protection Agency issued new regulations for six types of PFAS, which gave Hastings until April 2029 to reduce the chemicals in its drinking water. It plans to build three new treatment facilities to do it.

Wietecha and state lawmakers who represent Hastings are hoping the community will get help financing the facilities from state infrastructure legislation. Construction on the first of the new treatment facilities could start this summer with hopes of finishing the last one a few months before the EPA deadline.

“So really very little cushion for delay for whatever reason might come up,” he said.

The city has obtained $9.2 million in state grants and $14 million from 3M, which settled with the state in 2018 for $850 million in a long-running lawsuit over PFAS contamination. But that leaves $45.7 million in project costs it has to finance through other means.

“There will be money in the bonding bill for Hastings,” said Sen. Judy Seeberger, DFL-Afton, who represents the area. “We just have to get it done.”

“That really was one of the No. 1 things that I heard from constituents, especially when I was out door-knocking and campaigning, is the concern of, ‘Is my water safe?’ ” said Rep. Tom Dippel, R-Cottage Grove, who represents Hastings.

Gov. Tim Walz in January proposed an $887 million capital budget plan, including $8 million for drinking water contamination mitigation and $18 million for an emerging contaminant grant program.

Some in the Legislature say a bill is needed with at least $1 billion for infrastructure projects.

But new revenue numbers released earlier this month show a shrinking state surplus over the next two years and a deficit in the long term. That budget forecast reduced the state’s bonding capacity for this year to $700 million from $790 million.

Any bonding bill of less than $1 billion will be tough to get through the Legislature, said Sen. Sandy Pappas, DFL-St. Paul, chair of the Senate Capital Investment Committee. Legislative leaders on the bonding legislation are in talks with Walz’s administration about passing a larger bonding package this year and, perhaps, a smaller one in 2026, she said.

If Minnesota waits until next year to tackle some of its major projects, she said, project costs will only grow, and interest rates may increase.

“And we didn’t do one last year, so the need is even greater now,” Pappas said.

Lee said he wouldn’t advise going above the state’s bonding capacity of $700 million. A bill much smaller than $700 million would struggle to meet the state’s needs, he added.

Normally, the Legislature rolls out a bonding bill after Easter, Lee said. He wasn’t sure lawmakers would be ready on time this year. The Minnesota House is an even split between GOP and DFL representatives after a special election earlier this month, and a power-sharing agreement between the parties just took effect.