Lincoln council directs staff to pursue private-placement loan for $11 million solar project

The Lincoln City Council on May 28 directed staff to pursue a private-placement bank loan (a lease‑purchase structure) as the preferred way to finance an approximately $11 million municipal solar project, citing schedule urgency and flexibility despite a higher stated rate.

City staff and municipal advisers from PFM Financial Advisors outlined three options: lease revenue bonds sold publicly, a state-run I Bank loan (lower stated rate but a longer 4–6 month process and higher origination costs), and a private placement/bank loan (quicker, shorter closing timeline and no collateralization of additional public assets). Jaime Traho of PFM said the three options produce different average annual debt service estimates and repayment structures but highlighted that an anticipated federal reimbursement could be applied later: "the city estimates it's gonna receive about $2,500,000 as a reimbursement for these projects from the federal government," which could be used to prepay principal and lower future debt service.

Proponents of the private‑placement approach said it avoids the need to pledge additional city assets as collateral — a key political concern for several council members — and shortens the procurement timeline so the city can lock in current vendor pricing that staff said may rise at the end of the calendar quarter. City staff noted the project budget includes about a 7% contingency.

Opponents and cautious council members emphasized the long‑term savings calculus and the importance of preserving public assets. City Manager Anita Racker recapped tradeoffs and said staff would return with implementing documents: staff will bring a formal authorization for a private placement loan and associated task orders at the first meeting in July.

The council's direction was not a final financing approval but a clear policy preference to pursue the private placement option and return with contract documents and financing terms for a formal decision.

Next steps: staff will solicit and evaluate private placement proposals, incorporate the estimated Inflation Reduction Act reimbursement into financing scenarios, and return to council for formal authorization and related task orders.