EDA told landfill solar project likely requires bond payoff, MPCA sign-off and possible special legislation

Staff brought an update and a memorandum on prospects for a solar project on the city's landfill and told the EDA that significant legal and financial obstacles exist.

The staff member introducing the item said the memo (provided in members' packets and authored by staff including Sarah Sel) found that the primary barrier to an outside developer building on the site is the presence of federal tax-exempt bonds tied to the property; proceeding with many third-party development models could require paying off those bonds. "It appears that we would have to pay off the bonds," the staff member said, and later in the discussion staff cited an approximate bond-payoff amount around $3.3 million for the issuance in question.

Members noted two other hurdles: Minnesota Pollution Control Agency sign-off on landfill reuse and the probable need for special legislation to authorize unconventional financing or ownership structures. One member recommended asking the city's lobbyist whether pursuing a bill in the next legislative cycle is realistic. Staff volunteered to ask MPCA staff what technical documentation would be necessary to secure approval.

Grid interconnection is an additional practical constraint. Members reported preliminary conversations with Excel Energy found the landfill is not an ideal site for the utility's preferred project sizes and proximity to suitable distribution lines is a limiting factor. Staff said Excel indicated a preference for larger, better-connected sites; members advised checking Excel's interest before spending money on design or legislative efforts.

Why it matters: The landfill is a visible municipal asset and a solar project could contribute to renewable-energy goals, but the financial implications are material. If the city were to retire the bonds locally to enable a project, that would be a cash decision with budget and rating implications; staff noted the site's bonds are state-related and not necessarily on the city's balance sheet.

Next steps: EDA members asked staff to (1) consult the lobbyist about legislative feasibility, (2) ask MPCA what design proofs would be required, and (3) re-check Excel Energy's willingness to interconnect at that location. Staff also suggested exploring alternative models (city-owned installations on smaller rooftops or other municipal properties) if the landfill proves infeasible.