Adopting a Resolution approving an amendment to the 2026 Water Utility Capital Budget in the amount of $3,935,000, including $1,200,000 for the Country Club Road Water Main Extension, $2,150,000 for the Kalmar Booster Station, and $585,000 for water main oversizing.

Rochester is experiencing significant residential development that is increasing the need for growth-related investment in the Water Utility. Planned investments include the Country Club Road Water Main Extension ($1.2 million), Kalmar Booster Station ($2.15 million), 18th Street SW ($1.1 million), water main oversizing from 2026 through 2030 ($450,000 annually; approximately $2.2 million total), Ponderosa Booster Station ($375,000), and approximately $1 million in other known growth-related projects.

With the exception of the anticipated 2026 water main oversizing costs, these projects have been incorporated into the 2027 Supplemental Budget for the Water Utility. The Country Club Road Water Main Extension, Kalmar Booster Station, and 2026 water main oversizing require authorization in 2026 to allow Rochester Public Utilities (RPU) to proceed with project bidding and award on a schedule that supports planned development.
RPU proposes initially funding these capital expenditures with available Water Fund cash reserves and subsequently using proceeds from short-term borrowing to reimburse the Water Fund for eligible expenditures.

The Country Club Road and Kalmar Booster Station projects are associated with development agreements that provide for recovery of a portion of the infrastructure costs as development occurs. The Kalmar Booster Station is a long-term infrastructure investment intended to support approximately 1,700 acres of future development.  The proposed funding approach is intended to align the cost of growth-related infrastructure with the development creating the need for those investments, consistent with City ordinance Chapter 12-1.

Approval of this request would amend the 2026 Water Utility Capital Budget by $3,935,000 and allow RPU to move forward with the Country Club Road Water Main Extension, Kalmar Booster Station, and 2026 water main oversizing on schedules that support anticipated development.

The proposed capital investments support the City and RPU's responsibility to plan for reliable water infrastructure as Rochester grows and aligns with the strategic priorities related to providing quality service in a fiscally responsible and sustainable manner.

October 28, 2025: RPU Board approved the water fund 2026/2027 capital and operating budget

December 1, 2025:  Common Council approved the water fund 2026/2027 capital and operating budget

Approval would amend the 2026 Water Utility Capital Budget by $3,935,000, consisting of:

•    $1,200,000 for the Country Club Road Water Main Extension.
•    $2,150,000 for the Kalmar Booster Station.
•    $   585,000 for water main oversizing.

The projects would initially be funded using available Water Fund cash reserves. Subject to Common Council authorization of the proposed short-term borrowing, RPU intends to use borrowing proceeds to reimburse the Water Fund for eligible expenditures.

The Common Council could decline or defer approval of the 2026 Water Utility Capital Budget amendment. Doing so could delay RPU's ability to bid and award the Country Club Road Water Main Extension, Kalmar Booster Station, and related water main oversizing on schedules intended to support planned development.