Clinton council approves $1.884 million loan for planning of renewable natural gas project

The Clinton City Council on April 22 approved resolutions to authorize up to $1,884,000 in sewer revenue capital loan notes to pay for planning and design of a renewable natural gas system tied to the city’s wastewater treatment operations.

A city staff member said the loan is strictly for planning and design — including 30/60/90/100 percent design phases — and that separate financing will be required to build a biogas-to-RNG plant. “So, this is the planning design loan,” the staff member said, adding that staff is coordinating with ADM on facility type and that current preliminary quotes for a full plant are between $20 million and $24 million.

Council context: the council opened a public hearing on the loan and then voted on two related resolutions: one instituting proceedings to authorize the loan and another authorizing an interim loan and disbursement agreement with the Iowa Finance Authority. Both measures passed; several council members expressed caution about moving ahead before agreements with industrial users were finalized and questioned how construction financing would be repaid.

Why it matters: the project links Clinton’s municipal wastewater flows and industrial wastewater from ADM to capture methane and produce renewable natural gas. That could change how the city handles methane currently sent to a flare and could create a revenue stream if gas is sold, but it also carries multi‑million-dollar construction costs and contract negotiations that will determine who pays and how.

What council members asked and what staff said

Councilmember Kearns asked whether the $1.884 million loan is only for planning and whether a $20–$25 million plant would follow. The staff member replied that the loan is for planning and design and that the larger construction cost would be separate. “We actually have 4 different quotes … between 20 and 24,000,000 right now,” the staff member said.

Kearns also pressed who would pay for construction; staff said industrial users (primarily ADM) and/or adjustments to industrial sewer rates would be considered. “Only industrial rates are used for this. So. Period,” the staff member said. Kearns later observed on the record, “ADM does not agree to those rates,” underscoring ongoing negotiations.

Staff and council discussed federal tax credits as a factor that could lower borrowing need. The staff member said those credits might reduce the project’s loan burden, noting they could change the amount the city must borrow.

Unresolved items and conditions

- Biogas agreement with ADM: council members and staff said a formal biogas agreement has not been codified. Staff said the wastewater‑treatment agreement for ADM is in place, but the separate biogas contract is still being negotiated and “needs to be codified” before moving further.

- Repayment and rate structure: staff stated construction costs would be addressed by industrial user rates or by agreements with ADM; details remain to be finalized.

- Timeline: staff estimated a gap between planning and when a biogas facility would replace the plant’s flare; they suggested a likely target where the flare would be replaced by treated RNG in 2026–2027, but noted timing is not set in stone.

Formal actions and votes

1) Resolution instituting proceedings for authorization of loan and disbursement agreement; notes not to exceed $1,884,000 (planning/design). Moved by Councilmember Musman; second not specified in the record. Vote (roll call): Shemmers — yes; Dederman — yes; Seely — no; Oberyn — yes; Musman — yes; Kearns — no. Outcome: approved.

2) Resolution approving form of interim loan and disbursement agreement with the Iowa Finance Authority and providing for issuance of $1,884,000 sewer revenue capital loan anticipation notes, series 2025. Moved by (staff presentation) and seconded. Vote (roll call): Shemmers — yes; Dederman — yes; Seely — no; Oberyn — yes; Musman — yes; Kearns — no. Outcome: approved.

Clarifying details

- Loan amount authorized for planning/design: $1,884,000. - Estimated construction cost for a full RNG plant discussed on the record: four preliminary vendor quotes between $20,000,000 and $24,000,000. - Funding options discussed: industrial user charges (ADM), potential federal tax credits, and possible rate adjustments; staff said only industrial rates would be used for construction cost recovery unless an alternate agreement is reached. - Contract status: the agreement to take ADM’s wastewater exists; the biogas‑specific agreement between the city and ADM had not been finalized at the meeting.

Speakers (as identified in the meeting transcript)

- Councilmember Musman — Council member (government). First mention: moved the resolution to institute proceedings. - Councilmember Kearns — Council member (government). First mention: asked about the $20–$25 million plant and who would pay. - Staff member — City staff (government). First mention: explained the planning/design loan, timeline and coordination with ADM. - Tim — Attorney, Allers and Cooney (law firm). First mention: described as an attorney who answered council questions in prior meetings; referenced during discussion but not quoted at length in the public record.

Authorities referenced

- Code of Iowa — referenced in the resolution language as the statutory authority under which notes are issued (type: statute; referenced_by: loan and interim loan resolutions). - Iowa Finance Authority — referenced as the counterparty for the interim loan and disbursement agreement (type: other; referenced_by: interim loan resolution).

Proper names

- City of Clinton (government) - ADM (Archer Daniels Midland) (business) - Allers and Cooney (law firm) - Iowa Finance Authority (agency)

Community relevance

- Geographies affected: Clinton City wastewater service area. - Impact groups: municipal sewer ratepayers; industrial sewer customer ADM; city taxpayers (if additional local funding decisions are made).

Meeting context

- Engagement level: extended discussion with multiple council members asking technical and contractual questions; speakers included council members and at least one city staff member who provided multi‑minute technical answers. - Implementation risk: medium — major unresolved agreements (ADM biogas contract) and substantial future capital funding required. - History: council has discussed ADM wastewater and RNG planning in prior meetings; staff referenced earlier meetings with ADM and outside counsel.

Searchable tags: ["renewable natural gas","sewer revenue notes","ADM","Iowa Finance Authority","Clinton City","wastewater"]

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