Council schedules loan meeting as wastewater expansion planning moves forward amid biogas debate

The Clinton City Council on April 5 adopted a resolution setting a meeting date to authorize a loan and disbursement agreement and the issuance of not-to-exceed $1,884,000 in sewer revenue capital loan notes, and heard extended discussion about options to produce and use biogas from the city's wastewater treatment plant expansion.

Council members and city staff framed the action as a near-term financing step to advance design and planning that will determine whether the plant's biogas is routed into the regional pipeline or used on-site.

City staff said the federal program currently tied to the project could bring roughly $27.9 million in tax credits if the city moves forward with a biogas system. "The why is there's $27,900,000 federal tax credit that is out there if if we move forward with the biogas portion," a city staff member told the council. The staff member added that the design work will include two routing options: sending processed gas into the pipeline or routing it back into the plant for on-site use.

The staff member also described cost and timing considerations tied to the wider plant expansion, which the council has been funding in partnership with an industrial user identified in the meeting as ADM. The city reported an original contract cap of $135 million; the project currently sits near $130 million, and staff told the council they expect to request roughly $4 million more to finish remaining work. An unexpected sludge cost of about $1.5 million was also mentioned in the discussion.

Council members asked about timing and whether the plant should be completed first. "I don't think it's a bad idea either, but I'm concerned that I think we need the plant should be up and operational and we should take one thing at a time," Council member Davis said. The city staff replied that design work is needed now to preserve eligibility for the federal tax credit and to assess the relative costs of pipeline interconnection versus on-site reuse.

Officials said the design and planning step the council approved will provide figures for those options and better define anticipated costs; the meeting included a question about a $1.8 million figure for immediate design work and a staff reply that the city had the needed authority to proceed. The staff member said the design will show "what it will cost to create biogas to produce it" and will provide the data needed to decide whether to route gas into the pipeline or back into the plant.

The council voting record on the resolution to fix the loan authorization meeting showed five votes in favor and two opposed. Council member Shemmers moved the resolution; a second was recorded but not named in the minutes. The resolution authorizes publication of notice regarding issuance of the loan notes; the loan authorization meeting date will determine whether the city proceeds with that borrowing step.

What this does and does not do: the council did not adopt the biogas construction contract at the meeting. The item advanced procedural authorization for financing that staff said is intended to support planning and later borrowing tied to the plant expansion and rate structure changes for industrial customers.

The council and staff said a loan or loans to finish the plant will be repaid through industrial rates only, not residential rates, and that rate-setting will be returned to the council when needed. Staff also said they are seeking clarification from state and federal representatives about how the tax-credit funds would be allocated and whether partial credit would be available if project components are completed in phases.

The action and discussion were part of a longer utility and capital project briefing that included multiple motions and subsequent votes on related agenda items.