School board approves parameters to borrow up to $7.285 million for Phase 1 sustainability projects

The Middleton-Cross Plains Area School District board on July 14 approved a parameters resolution authorizing the district to enter the bond market to borrow up to $7,285,000 to fund Phase 1 of its sustainability program, following an update from contractor McKinstry on completed and pending work and a discussion of financing options.

The board voted on a parameters resolution that allows district officers to finalize the timing and final terms of a sale — giving administrators flexibility to go to market when rates and issuance conditions are favorable.

McKinstry officials said the district’s Phase 1 program has saved money in several line items, reallocated solar scope because of utility interconnection limits at one site, and identified a net contract reduction of about $660,500. McKinstry’s Eric Renez, regional director for McKinstry Midwest Energy, told the board that federal clarity on investment tax credits (ITC) means projects that begin between July 4, 2025 and July 4, 2026 and are placed in service by Dec. 30, 2027 should qualify for a 30% ITC.

“That clarity means all of the solar within this project should be eligible for the full ITC,” Renez said. “...total implementation cost, lifetime project energy savings, replacement cost avoidance, and the total incentive — that’s a 20‑year economic benefit that’s positive to the district.”

Discussion focused on three finance-related topics: (1) how federal tax credits change project economics; (2) two proposed borrowing scenarios; and (3) whether to reintroduce geothermal for Sauk Trail Elementary into Phase 1.

Administration presented two financing scenarios. Option 1: a single, long-term borrow to fund the full remaining project cost. Option 2: a shorter-term credit to bridge cash flow while awaiting federal credits, combined with a long-term note for the remaining balance. The administration recommended Option 2 as the more fiscally conservative choice given recent budget pressures and the expectation of federal credits.

Board members and McKinstry staff also described site-specific adjustments: the Pope Farm solar array was reduced because the local utility distribution feeder has a maximum allowable export; Park Elementary’s solar scope was moved into Phase 1 to capture net savings; and Glacier Creek and the high school were adjusted to capture an interruptible‑rate credit from Madison Gas & Electric (MGE). Sean Curry, McKinstry project director, described the utility work and interconnection steps the team has completed and the remaining long‑lead items such as an SEL relay and a switchgear rework at some buildings.

On geothermal, board members raised questions about payback and replacement timelines. Board members asked that geothermal at Sauk Trail be returned as an information and potential action item at the August meeting for more analysis on costs, payback period and how the district would meet its sustainability goals without that investment. McKinstry staff said their engineers will revisit assumptions and that federal incentives materially affect the financial case.

The board approved the parameters resolution in a voice vote; no individual roll-call tally was recorded in the minutes. The resolution authorizes district officials to proceed with issuance steps and to finalize pricing and amounts consistent with the parameters presented.

Administration said final borrowing amounts, the split between short‑ and long‑term financing, and use of any federal credits will be finalized before closing and brought back to the board as required.