Rochester Public Utility Board Meeting - May 20, 2026
Rochester Public Utility Board Meeting - May 20, 2026
Note: The agenda and minutes indicate the meeting was held on May 19, 2026, but the user instructions specify the date as May 20, 2026. This summary uses the provided date.
The Rochester Public Utility Board met on May 20, 2026, at 4:00 p.m. The meeting covered consent agenda approvals, a bid award for lead service line replacement, election of officers, informational updates on the Cascade Creek gas turbine recovery and 2027 budget assumptions, and an executive session on litigation. All votes were unanimous.
Consent Calendar
- Minutes of April 28, 2026: Approved.
- Accounts Payable: Reviewed and approved for $12,736,807.55 for the period 04/09/2026 to 05/08/2026.
- Annual Cayenta Software Maintenance: Approved resolution to pay $268,251.48 (including tax) to N. Harris Computer Corporation, with future payments authorized through annual budget approval.
- Collective Bargaining Agreement (2026-2028): Approved resolution authorizing the CBA with the International Brotherhood of Electrical Workers – Inside Group, recommending City Council ratification.
- Ponderosa Pines Booster Station Improvements: Approved $406,895 from the Water Utility capital budget for self-performed improvements, with $104,000 collected from development and the balance from RPU.
Public Comments & Testimony
- None.
Discussion Items
Consideration of Bids: 2026 Lead Service Line Replacement Project (Item 4.A)
- Assistant General Manager Todd Blomstrom presented the program status: 228 lead services (0.5% of all services), 226 galvanized (0.5%), 1,900 unknown (4.4%), and 40,786 confirmed non-lead (95%). The utility remains in compliance with the EPA action level of 15 ppb. A grant of $1,450,000 from the Public Facilities Authority funds the program.
- Three bids were received; the base bid of $674,196 from A-1 Excavating LLC was accepted for 33 lead service replacements. An alternate bid allowed scaling up to $1,060,000 for additional replacements and investigations. The average replacement cost is 18% lower than last year.
- Board members asked about progress and funding. Staff noted that 600 unknowns were resolved last year, mostly non-lead. The project targets a census block east of Zumbro River, with 50 replacements expected this year. The goal is to reduce lead services below 200 and unknowns below 1,500 by next year.
- Key Vote: Approved unanimously to award the contract to A-1 Excavating LLC for $674,196 and authorize project manager to direct additional work up to $385,804, total $1,060,000.
Election of Officers (Item 5.A)
- Board President Malachi McNeilus and Vice President Wendy Turri recommended the appointment of McNeilus as President, Turri as Vice President, and Erin Henry-Loftus as Board Secretary.
- Key Vote: Approved unanimously.
Cascade Creek Gas Turbine 1 Recovery (Item 6.B)
- Manager of Power Resources Tony Dzubay reported on the discovery phase following a June 1, 2025 fire. Of the $2 million approved for discovery, $1.7 million has been spent. Disassembly found no major component damage preventing recovery. A generator inspection is ongoing.
- An engineering firm provided a budgetary estimate of $10 million for the return-to-service phase. The goal is to have the unit back by June 2027. The 35 MW capacity is critical for local resiliency and capacity credits.
- Board members discussed the age of the unit (50 years) and the value of refurbishment vs. replacement. Staff noted that a rebuilt unit is like new, and the quickest path to capacity is through recovery. The unit’s low operating hours make it valuable for peaking and outage events.
2027 Budget Assumptions (Item 6.A)
- Assistant General Manager Peter Hogan presented assumptions. Key changes include: a reduction in expected borrowing for Cascade Creek replacement (saving $50 million in capital), $3.5 million for ERP implementation, and $2.6 million in reallocated Mount Simon funds. Water utility faces short-term borrowing of $6–10 million for capital projects.
- Operating assumptions include a projected 14% decrease in wholesale power costs, but staff cautioned that recent wholesale market volatility (e.g., Winter Storm Fern) may adjust that downward. Labor cost increases reflect settled union contracts.
- Board members questioned the labor inflation rate (4.5% in 2025, 3.4% in 2026) and general inflation (3.0% in 2025, 2.5% in 2026). Staff clarified these are projections based on contracts and industry trends. No rate changes are planned for 2027 under the existing two-year rate approval.
Board Policy Review and General Manager’s Report
- General Manager Tim McCollough noted the city council is considering financial policies on May 27, and RPU’s companion policy review will target June or July.
- Board members commented on customer appreciation for staff professionalism and supported the outbound customer call pilot program, with caution about automated calls.
Key Outcomes
- Consent agenda approved unanimously.
- Lead service line replacement contract awarded to A-1 Excavating LLC for $674,196 (base) with up to $1,060,000 total, approved unanimously.
- Officers elected: Malachi McNeilus (President), Wendy Turri (Vice President), Erin Henry-Loftus (Secretary), approved unanimously.
- Cascade Creek GT1 recovery to proceed to phase two; staff to return in June for board approval of the recovery project.
- 2027 budget assumptions noted; detailed budget presentation scheduled for August 4, 2026.
- Board adjourned to executive session at 5:09 p.m. to discuss potential litigation (CapX 2020 Transmission Lines) under Minnesota Statute 13D.05 Subd. 3(b), ending at 5:37 p.m.
Meeting Transcript
Good afternoon. It's four o'clock, and we will call this meeting of the Rochester Public Utilities Board to order. A quick reminder as we uh get going. This meeting is recorded. A recording will be available on the city's website. And the first item of business on the agenda today is the approval of the agenda. There will be one change to the order of the informational items, item 6B, the Cascade Creek Gas Turbine 1 recovery. It'll be taken up before item 6A. Tim, do you want to speak a little bit to the adjustment? We just have a fifth and sixth grade band concert tonight that we'd like to let somebody get to. So if you don't mind, we'll do that agenda item first. I'll move approval with the minor adjustment. Perfect. We have a motion and a second. Second. Moved and approved. Any discussion? If not, all in favor, say aye. Aye. Aye. Any opposed. The agenda is approved. Next, we have our safety moment with director of power resources, Mr. Bill Bullock. Good afternoon. Now May is when construction really gets uh geared up, and we do have a lot of construction projects in the work here. So there's the Cascade Creek GT1 recovery that Tony will be uh giving more detail on later. There's the Mount Simon peaking plant. There is there are two batteries, one at the Zumbro Station and one here at the service center. And then we have uh communications integrations with our uh wind PPAs that we're setting up in Adams and Dog Center and eventually in Howard County. Um so in addition to these projects, we also have the normal power delivery and and water operations uh crews that are engaged in uh ongoing seasonal improvements. Um with this level of activity, our primary safety focus is managing risks across the entire portfolio, um, and key areas of uh continuous mitigation include um you know ensuring heavy equipment operations and contractor coordination is done on a regular basis, excavation and uh underground utility hazards are identified, um, energized electrical work and a lockout tag out procedures are followed. Um, all of our new construction projects will be on the site of uh of existing active um power generation facilities. So it'll be important to do those log log lockout tag out procedures. Um then there's also weather related risks, um, including heat stress and unstable ground conditions. Um and then having the proper uh protective uh personal equipment is is very important. Um we mitigate that also with daily job briefings, doing hazard assessments, um, giving every um team member stop work authority if they see something unsafe happening. Um strong communications are essential to um to keeping safety in in work zones. Um for our board members and the public, um uh there are also some simple and important ways to uh support safety uh during this busy construction season and when you're visiting some of these construction sites. Um slow down and stay alert in work zones. Um the construction cones seem to bloom like flowers this time of year. Um follow all the posted uh traffic control and detour signs. Uh avoid distractions on your mobile devices, especially when driving near near crews. Um give utility and construction workers extra space um when driving uh by barricades. Um and then, of course, report any unsafe uh conditions that you might see. Um safety is a shared responsibility, and community awareness plays an important role in protecting uh workers and the public alike. And you'll say no project milestone is more important than um protecting people. So safety is always very important. Thank you. Thank you so much, Bill.
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