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Veterans affairs seeks asset preservation, proposes repurposing prior rider funds for Hastings and Minneapolis projects
Summary
John Kelly of the Minnesota Department of Veterans Affairs told the committee the agency requests $23.7 million for asset preservation and proposes repurposing $62.3 million of an existing rider to renovate Hastings and Minneapolis domiciliary facilities because federal matching grants are unlikely soon.
John Kelly, director of government affairs for the Minnesota Department of Veterans Affairs, told the House capital investment committee the department’s top 2026 priorities are asset preservation across state veterans homes and a proposed "pivot" that repurposes previously authorized rider dollars toward renovations.
Kelly said the department requested $23.7 million in asset preservation to address deferred maintenance — a mix of roof, boiler, mechanical and electrical work — across 71 buildings and four state veterans cemeteries, and to protect the quality of care for more than 900 residents in state homes.
On a separate item, MDVA proposed using the remaining $62.3 million of an earlier $77 million authorization to fund significant improvements at the Hastings campus and to complete a renovation of Minneapolis Building 16, a domiciliary (resident) facility. The agency framed that move as a response to a multi-year backlog in the federal State Homes Construction Grant Program that has reduced the likelihood of securing matching funds for a tear-down/rebuild approach.
"If we do nothing, the funding authorization will end in 2027 without having made improvements," Kelly said, describing the pivot as a reallocation of existing state-authorized dollars rather than a cancellation. He told members the federal program’s backlog means the department is unlikely to receive matching construction grants in the near term, so the state funds would allow immediate improvements to resident facilities.
Representatives asked for clarification about whether funds were canceled or repurposed and about federal scoring that tends to favor skilled nursing over domiciliary projects; MDVA said the pivot preserves use of the funds and prioritizes projects that improve residents’ daily life while federal matching remains uncertain.
The committee did not take final action on the proposal; members noted the trade-off between pursuing federal match and ensuring near-term improvements for residents.
