Board authorizes up to $25 million in COPs to finance district solar, HVAC and EV infrastructure

The Western Placer Unified School District Board of Trustees voted to authorize the use of certificates of participation (COPs) to finance a district energy project, the board was told Thursday. The resolution approved limits the financing to $25 million and authorizes interest of up to 5.5 percent while leaving final pricing to a July bond sale.

District and finance staff said the project combines solar installations at five campuses, replacement of about 5,000 lighting fixtures districtwide, new EV charging infrastructure to support four electric buses, and an HVAC replacement at 12 Bridges Middle School. Jeff Small of Capital Public Finance Group, who presented the financing plan, told trustees the district will use a lease/leaseback structure and two-series bond approach so federal tax credits can be applied and the portion tied to the tax credit (series B) can be prepaid when the credit is received.

District staff said the project will be financed using a lease/leaseback structure commonly used for non‑voter debt in California. According to the presentation, two district sites — described as having sufficient value — will be used as the leased assets in the structure, producing roughly $27 million in value pledged as collateral. The project fund deposit shown in the board packet was $22,150,000.

Supporters said the financing is structured so projected utility savings and federal tax credits under the Inflation Reduction Act of 2022 will reduce long‑term costs. Small said the district modeled conservative assumptions — a 3 percent annual escalation for utility costs — and had an independent engineering review of expected energy savings. He showed a sample all‑in modeled true interest cost of about 4.98 percent and said the marketing plan blends a retail investor sale and institutional orders to achieve the lowest achievable rate. The board packet and presenters also described a plan to prepay the series tied to federal tax incentives after the district receives the tax credit payment, reducing net interest cost.

Trustees asked technical questions about collateral, the location of project work and implementation risk. Presenters said the lease/leaseback is a financing mechanism only; the district retains ownership and will sublease the sites back for continued operation. The trustees confirmed solar and the HVAC work will be installed at the campuses included in the COPs scope, and that other campuses may receive solar as part of the broader district program. Site Logic, the district’s solar engineer, told the board its current conservative estimate of panel life is 30 years and the project includes an operations and maintenance plan with periodic major maintenance modeled every five years.

Board members and public speakers raised questions about the project’s optics — for example, putting solar canopies over parking versus playground shade — and whether the public will understand the expected long‑term savings. Presenters said the contract includes an energy‑management dashboard and public‑facing monitoring tools so the district can show monthly production and savings.

The board adopted a resolution (identified in the staff packet as Resolution 24‑25.39) that authorizes the financing documents and sets the maximum financing parameters; the district’s preliminary official statement and final pricing were left to market conditions at the July bond sale. Trustees were told the project should be substantially complete by the end of 2026 and that the district will submit for tax credit reimbursement soon after project completion.

Trustees and staff said monitoring, conservative modeling inputs and an independent energy review were intended to limit implementation risk; presenters identified the primary remaining risks as (1) any changes to federal tax credit rules while the project is under way, (2) market interest‑rate movements before the July sale, and (3) operational performance risks that will be managed through monthly monitoring and a contractor O&M agreement.

"The loan is called a certificate of participation," Jeff Small said during his presentation. "In California, it's a common structure for school districts to borrow for capital facilities using a lease/leaseback and non‑voter debt." Jennifer from the district’s solar consultant added, "We factor in degradation and we've seen systems operate well at 30 years; we also plan for replacement of major components like inverters at roughly the 10‑ to 15‑year mark."