Committee keeps solar array design in CIP but flags tax‑credit uncertainty before larger borrowing

The committee left $150,000 for solar-array engineering in the recommended CIP but emphasized that the project’s financial case is tied to federal tax credits. Committee members said they expect to know more about federal incentives by the end of the federal fiscal year and noted the city would defer major construction borrowing until later (the committee referenced an anticipated general-obligation borrowing of nearly $2 million in a subsequent year to build the array). Joaquin (utility staff) said the utility did not intend to fund the project from rates.

Why it matters: The solar array is expected to reduce utility operating costs at the plant (committee cited an approximate $80,000 annual savings figure), but the project’s payback and the city’s upfront investment depend on tax-credit availability. If tax credits are not available, the payback period lengthens substantially and the committee cautioned finance about proceeding with large borrowings without clearer incentives.

Committee members proposed keeping the engineering/design funds as a placeholder and revisiting the construction decision after federal fiscal-year results. Staff said the one-time tax credit would be available after project construction and that the city expects the credit to be administered through the state. Members noted payback estimates in the meeting ranged from about 16–19 years with current credits, extending to 20–25 years if credits disappeared. The committee recommended monitoring grant and tax-credit developments and allowing finance to swap projects if incentives change before finalizing the 2026 budget.