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Hanford approves $3.68M lease-purchase to finance wastewater solar project; city to receive estimated ITC

Hanford City Council · January 20, 2026

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Summary

Council authorized a $3.68 million equipment lease-purchase to fund solar at the wastewater treatment plant, selecting Bank of America Public Capital Corp'9s ~4.49% bid; staff expects the project to qualify for an Investment Tax Credit of roughly $938,000 and projects net energy savings over the lease term.

City finance staff and municipal finance advisors presented financing terms for a $3.68 million solar equipment installation at the wastewater treatment plant and recommended authorizing an equipment lease-purchase agreement and escrow control to fund construction.

NHA Advisors and Oppenheimer ran a lender solicitation; Bank of America Public Capital Corp (BAPC) submitted the most advantageous terms with an interest rate near 4.49% for a 20-year lease maturing in 2045. Staff said Opterra'9s projected system performance and debt service yielded more than $2.5 million in net energy savings over 25 years after lease payments. The federal Investment Tax Credit (under current law) is expected to be approximately 25.5% of project cost (about $938,000). BAPC agreed to allow a one-time special early prepayment of principal when the city receives ITC funds so those funds could be used to reduce future lease payments.

Council discussed prepayment premiums and the timing of potential prepayments; advisors explained the lease includes prepayment options (with premiums) starting in year four for a 2% premium and a 1% premium after year 11. Council also asked about inverter replacement costs and whether those are financed; advisors said inverter replacement estimates are shown in the project contract and are anticipated to be paid on a pay-go basis when required.

Council adopted the authorizing resolution to proceed with the solar equipment lease purchase and escrow account; the motion passed 5-0. Staff said closing could occur within days, enabling funds to flow for construction invoices.