Adopting a resolution authorizing the County Club Road Water Main Extension Project, City Project J7862 to proceed and approve Water Extension Improvement, Petition and Waiver, and Reimbursement Agreements with Pulte Homes of Minnesota LLC and ML Group I LLC.

Rochester Public Utilities and the Rochester Public Works Department have jointly designed City Project J7862 to extend municipal water and sanitary sewer service from West Circle Drive along Country Club Road SW to 45th Avenue SW. The project will support the proposed Del Webb residential subdivision being developed by Pulte Homes of Minnesota LLC and the West Meadows subdivision being developed by ML Group I LLC. 

The water portion of the project includes extension of a 12-inch public water main through three defined project segments along the project corridor. Pulte and ML Group will fund their allocated shares of the cost to install an 8-inch water main, while RPU will fund the differential pipe material cost associated with upsizing portions of the water main from 8 inches to 12 inches in accordance with City engineering standards. Segment A costs will be shared equally by the two developers, Segment B will be funded by ML Group, and Segment C will be funded by Pulte. 

RPU and the City Public Works Department would construct the public improvements as a coordinated project rather than requiring each developer to independently extend municipal services. The proposed agreements establish each developer’s cost responsibility, authorize the City to design and construct the project, require necessary utility and construction easements, and provide for reimbursement of project development costs. The agreements also authorize the City to levy deferred special assessments against the benefiting properties as security for payment, with the developers waiving applicable project and assessment hearings and appeal rights. 

RPU would provide the initial capital funds for all water main costs and recover these expenses as the two properties develop.  If the properties do not fully develop by October 2031, remaining unpaid costs would then be recovered through a special assessment against the parcels.

At this time, Council is being asked to approve the agreements with the developers.  Staff will present a resolution levying the special assessments when the final project costs and assessment amounts are known.

Implements adopted City/RPU engineering standards for water infrastructure and establishes developer cost participation through Water Extension Improvement Agreements.  Supports increased housing availability within the community. 

The Rochester City Council authorized engineering design of the project on September 8, 2025, utilizing the Water Connection Fund in the amount of $113,000 to fund the water utility portion of the design expenses concurrent with Public Works sanitary sewer funds.  Water main design costs were designated to be recovered through future development agreements.  The two cost participation agreements included in this action provide for the reimbursement of design costs.

Under the agreements, the current maximum assessment is $424,302 for the Pulte property and $527,971 for the ML Group property. Actual assessments will be based on the applicable allocated project costs and may be less than these amounts. Approval of the agreements will establish the framework necessary to proceed with bidding and construction while assigning the developer-specific water extension costs to the properties benefiting from the improvements.  The estimated cost share for RPU is $244,617, resulting in a total cost estimate for water main improvements of $1,196,890.  Funding for the water main project costs would be derived from short-term financing.

There are no alternative actions suggested at this time.