Rochester Public Utility Board Meeting Summary – August 26, 2026

The Rochester Public Utility (RPU) Board met on August 26, 2026 (the provided timestamp; the agenda and minutes list the meeting as August 25, 2026, 4:00 p.m., with adjournment at 5:26 p.m.). Board President Malachi McNeilus presided. Present: Patrick Keane, Malachi McNeilus, and Wendy L. Turri. Brett Gorden and Kelsey Vaszily were absent with approved absences; a quorum was present. Every formal vote was unanimous (3-0).

Safety Moment

• IT Compliance and Security Coordinator Thuan Nguyen presented a cybersecurity safety moment, urging employees to lock their computers with Windows key + L before stepping away.

Consent Agenda

• Approved minutes and video of the August 4, 2026 RPU Board meeting.
• Reviewed accounts payable from 07/14/2026 to 08/11/2026 totaling $17,254,878.71.
• Appointed Todd Blomstrom as Alternate Member Representative to the Southern Minnesota Municipal Power Agency (SMMPA).
• Adopted revised 2026 Water Service Rules and Regulations effective September 1, 2026.
• Authorized SBS Automated Utility Design for the Designer Replacement Project, with expenditures up to the approved multi-year project budget of $950,000.
• Authorized capital expenditures up to $580,000 for the 2nd Street SE and 16th Avenue SE Sewer and Water Improvements, City Project J7838.
• Authorized the 2026–28 collective bargaining agreement with the International Brotherhood of Electrical Workers – Outside Group (IBEW-O) and recommended City Council ratification.
• Motion by Wendy L. Turri, seconded by Patrick Keane; passed 3-0.

Public Comments & Testimony

• None. No members of the public signed up to speak.

Discussion Items

Country Club Road Water Main Extension Project (4.A)

• Assistant General Manager of Operations Todd Blomstrom presented the project, which extends a water main along Country Club Road to serve Pulte Homes of Minnesota LLC’s Del Webb subdivision (300+ units) and ML Group I LLC’s Meadow Lakes multifamily development (several hundred units).
• The project is needed because development is in a new pressure zone and faces obstacles including Cascade Creek, floodplain/floodway crossings, and coordination with a sanitary sewer public improvement.
• Project cost is approximately $1.2 million: $424,000 apportioned to Pulte, $527,000 to ML Group, and $244,000 to RPU for 8-inch-to-12-inch main oversizing. RPU would front capital costs and be reimbursed through deferred special assessments over five years.
• The Board approved expenditures up to $1,200,000, possible conversion to short-term debt financing, and the two Water Extension Improvement, Petition and Waiver, and Reimbursement Agreements. Motion by Keane, seconded by Turri; passed 3-0.

Water Fund 2026 Capital Budget Amendment (4.B)

• Assistant General Manager of Administration Peter Hogan requested a $3.935 million amendment to the 2026 Water Utility Capital Budget: $1.2 million for Country Club Road, $2.15 million for Kalmar Booster Station, and $585,000 for water main oversizing.
• Staff described financing through internal cash and short-term borrowing of up to about $2 million per year in 2026, 2027, and 2028. Short-term debt would be three years or less and interest-only, with long-term bonding anticipated around 2028–29.
• The Board approved the amendment and recommended Common Council approval. Motion by Turri, seconded by Keane; passed 3-0.

Proposed 2027 Board Meeting Dates (5.A)

• General Manager Timothy McCollough presented proposed 2027 dates. All would fall on the last Tuesday except the December meeting, which was set before the Christmas–New Year’s holiday week. The only noted conflict was January 26, which coincides with the Minnesota Municipal Utilities Association legislative day at the Capitol; McCollough advised against moving that meeting.
• Board members raised no conflicts. Staff will bring the calendar back for approval on the next month’s consent agenda.

Natural Gas Supply for Mt. Simon Station (5.B)

• Interim Director of Power Supply Tony Dzubay presented an informational update on a proposed secondary firm natural gas agreement for Mt. Simon Station. Mt. Simon’s predicted summer capacity for 2030 is about 46 MW, roughly 15% of RPU’s capacity requirement.
• The secondary firm tier has no upfront cost, adds a small adder to the gas commodity, and supplements Mt. Simon’s fuel-oil backup. RPU projects a 10–20% capacity factor for the units. In the last winter there were five system overrun limitation days in December, fifteen in January, and zero in February, with an average of about ten per month.
• In response to Councilmember Keene’s questions, Dzubay and McCollough explained that a higher-priced fuel tier would slightly reduce dispatch and run hours, while firm gas was not worth its large upfront cost. The secondary firm tier was described as the best balance of fuel assurance, cost, and ratepayer benefit.
• No action was taken. Staff will return in September for approval; because it is a 10-year agreement, City Council approval will also be required.

Board Policy 4: Board Organization (6.A)

• McCollough presented proposed revisions to Board Policy 4, including adding a treasurer role, moving officer elections from May to December, creating an advisory officer rotation (orientation/treasurer/vice president/president over a four-year term), adding an officer removal process by a vote of three, and clarifying that the Board acts only as a body.
• Board members discussed whether to retain liaison assignments. Councilmember Keene and others expressed concern that liaison roles had not been used and could reduce collaboration; the consensus was to delete the liaison structure.
• Note: The meeting minutes state the Board approved the revisions with the removal of liaison assignments, but the transcript indicates McCollough proposed bringing the revised policy back at the next meeting. This discrepancy is noted.

General Manager’s Report & Division Reports

• McCollough reported on an ERP project approach change: instead of RPU going live first and the city later, the project will target a single organizational go-live at the end of July 2027, with aligned chart of accounts, human capital management, financial, and asset management systems.
• McCollough discussed SMMPA cost and exit considerations, including planned SMMPA debt issuances in 2028–29, the capital retirement fund, renewable energy credits, and a January cash refund. Keene expressed concern about ensuring Rochester ratepayers do not pay for costs that will only benefit the agency after RPU exits.
• Division reliability metrics were described as low relative to national and municipal averages; a beaver-caused outage was noted.

Other Business

• McCollough requested two Board members for an Ad Hoc Group for Board Policy 22: Acquisition and Disposal of Interest in Real Property. Wendy L. Turri and Patrick Keane were selected.

Key Outcomes

• Approved agenda, consent agenda, Country Club Road project, and Water Fund budget amendment, each 3-0.
• Received informational items on 2027 meeting dates and Mt. Simon natural gas supply; no action taken.
• Board Policy 4: minutes record approval with liaison assignments removed; transcript indicates a revised version will be brought back at the next meeting.
• Appointed Turri and Keane to the Policy 22 Ad Hoc Group.
• Adjourned at 5:26 p.m. (per agenda/minutes).