Calabasas authorizes $526,671 pre‑construction payment to lock $1.2M federal incentive for city solar project

The Calabasas City Council on June 24 authorized a pre‑construction amendment to the city's energy‑savings performance contract to allow the advance purchase of solar panels and preserve a federal elective payment estimated at about $1.2 million.

Colton Gorman, representing the energy contractor Wilden, told the council that because Calabasas is a tax‑exempt public entity it qualifies for an IRS elective payment equal to approximately 30% of eligible solar investment when the city "safe harbors" the project by spending a qualifying fraction of the equipment cost now. Wilden recommended advancing purchase of the panels (roughly 13% of the solar project cost) so the city can preserve the payment; the July 4 safe‑harbor window makes the timing urgent, Gorman said.

Council members asked technical and timing questions: who holds title and insurance for equipment while panels are stored, expected date for receipt of federal funds, and anticipated annual energy savings. Gorman said the city takes ownership when panels are invoiced, that equipment is insured in storage and staged at a licensed warehouse, and that the federal payment would be received after construction completion (staff estimated early 2028 under current timelines). The contractor also said the project includes solar arrays sized for three city sites and a battery for the civic center sized for limited backup duration.

Council voted unanimously to authorize the city manager to execute the pre‑construction amendment and appropriate funds in an amount not to exceed $526,671 to secure the federal payment and the four‑year build window the payment allows.

What this means: The city will spend the appropriation now to preserve a larger federal payment when the project is complete, reducing net project cost. Staff said the final investment‑grade audit and energy‑savings estimates will be presented next week for staff review, and the city will include standard operation‑and‑maintenance terms (a typical three‑year O&M package was discussed) with options for longer periods if desired.

Authorities and fiscal notes: The council's action authorizes a pre‑construction amendment to a previously negotiated performance contract; the appropriation was set not to exceed $526,671 and the federal incentive estimate of $1.2 million was presented by the contractor. The exact timing of incentive receipt depends on project completion and federal processing.