Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Energy Infrastructure topic
No spam. Unsubscribe anytime.
Council to consider RSM tax-services plan after briefing on biogas facility and possible federal investment tax credit
Summary
City staff and consultants briefed the Committee of the Whole on a proposed biogas facility and how the federal Investment Tax Credit could return roughly half of a $25 million qualifying project as cash; the council moved the RSM statement of work to the next business meeting for formal approval.
City staff presented consultants’ plans for a proposed biogas (renewable natural gas) facility and asked RSM to undertake a statement of work to determine eligibility for federal tax incentives.
Kevin Borrell, a tax partner with RSM, told the council that changes in the Inflation Reduction Act allow tax-exempt entities such as cities to receive an investment tax credit for qualified renewable‑natural‑gas projects. Using a working assumption of a $25 million qualifying basis, Borrell said the city could be eligible for roughly half of that as a cash payment if the project meets bonus criteria such as domestic content, prevailing‑wage/apprenticeship rules and energy‑community tests: “If we just assume 25,000,000, you you all could be looking at a cash payment essentially about half of that,” he said.
RSM described a multi‑step review: cost‑segregation and documentation work, an assessment of prevailing‑wage and apprenticeship obligations, and preparation of a tax opinion that could be used to support the city’s position in the event of an IRS audit. Borrell warned the IRS is likely to audit many ITC claims and said RSM’s role includes preparing the documentation and, if necessary, defending the methodology.
Staff told the council the city has approximately $776,000 remaining in a state revolving fund loan balance that could be leveraged for planning/design work. The council discussed a proposed surcharge ordinance to capture costs from the facility’s industrial off‑taker (ADM), a draft purchase agreement with ADM as the primary buyer and a transportation agreement with Alliant to move gas. RSM’s statement of work was estimated at up to $400,000 with a possible increase to $550,000 subject to council approval, depending on the scope (for example, prevailing‑wage compliance can substantially increase effort).
The council voted unanimously to move RSM’s statement of work and the related ordinance updates to the next business meeting for formal consideration.
Next steps: RSM will produce an executive summary or memo of preliminary findings as requested; staff will place RSM’s SOW and ordinance language on the next business meeting agenda so council can decide whether to authorize work and contract funding.
