Having approved the required permitting at the January 28 council meeting, the City of Rushford Village formally consented to a 26-year land lease with OneEnergy Resources. The lease of up to three acres of city-owned land is expressly for the purpose of housing a portion of a $3.3 million, one-megawatt solar array system. The project is in partnership with MiEnergy.
For months, the council has gone back and forth in discussions on whether to lease the land. Land value prices and length of the lease were among the biggest concerns. At the January meeting, a committee, with Councilors Bob Hart and Roger Knuston, was formed for the purpose of lease agreement negotiations. Terms being proposed for the agreement are $500 per acre for the first year, $1,000 per acre for the second year, and $750 per acre for the remaining duration. The option of a 10-year extension at the end of the 26 years is also included at $1,000 per acre.
The first year is set at a reduced rate as it is considered a permitting phase, noted Kent Whitcomb, MiEnergy Director of Member Services. The city was pushing for a negotiable per acre rate, if possible. “Obviously, we’re looking out for the best interest of the city,” added Councilor Roger Knutson.
The proposed lease agreement was reviewed by City Attorney Joe O’Koren, who suggested a renegotiation period based on the volatility of land value. “At the end of 10 years, it could work in both parties’ favor. The value of the land could drop or skyrocket.” Whitcomb, however, understood the per acreage offer to be firm, with exception of the permitting year and the 10-year extension period after the initial lease.
At the last meeting, discussion included comparing the Rushford Village offer to what other project sites have received and that the Village property may be a premium site. Whitcomb confirmed that the offer is similar to what has been offered to all other sites. “So, that’s it, there’s nothing more?” asked Councilor Bob Hart.
“As far as the acreage price, that’s all there is,” responded Whitcomb. Hart questioned whether a higher price could be set by the city with MiEnergy supplementing the difference from the OneEnergy offer. “We would look at it if that was the only way we could hit one megawatt. But, if this doesn’t work out, we would just do it only on MiEnergy property. I don’t mean to be so cut and dry,” he quipped.
“That’s exactly what we need,” responded Councilor Mike Ebner. “All the other fields that are going on, it’s the same price all the way across. That’s what the going rate with all of them.” It was also confirmed that all OneEnergy projects in the area are ground-mount tracking arrays, with the exception of Lanesboro, due to land terrain.
“Take an acre of land for site… that land has a certain value. The payment doesn’t support the value,” said Hart. “All properties aren’t the same in value. The payment should increase to compensate the value.”
“It sounds like the price is that,” noted Mayor Dennis Overland. “Moneywise, it’s pretty cut and dry.”
“The solar field itself is a good green energy product that everyone is getting into and supports. It’s a consistent revenue stream, more than we’re getting off it now. It’s taking a percentage off our total electric bill for the year. That’s what I’m looking at it for,” said Ebner. “It was never purchased for commercial development. It was purchased for green space. Now, it’s just green energy. At the end of the lease, it’s still ours.”
“This was done backward,” noted Overland. “The lease agreement should have been done first.”
Zoning Administrator Jon Pettit suggested the ordinance would cover any problems that could be done over at the MiEnergy site, but on city property, there are additional steps that can be included on the permitting to cover checkpoints. “That’s the nice part about an interim use permit. Those steps have to be followed and everyone knows it. All you’ve okayed is that the site is okay. The interim use is how it can be used. It gives you a lot more jurisdiction and can be changed every year.”
O’Koren also suggested a number of clarification items for the lease agreement. They included an assurance that the lease is for solar panels only, that any and all subcontractors working on the city-owned site would be properly insured and provide documentation, and more pronounced terminology for having the site put back “substantially similar” at the end of the lease term. “It gave council members and myself pause,” said O’Koren. “Substantially similar… they want it put back the way it was.” Additionally, language relating to the removal and replacement or possible compensation of any vegetation will be addressed. “I don’t think substantially similar is the best way to flesh that out.” O’Koren will address the clarity issues for the final agreement.
“Obviously, we would have liked to get more money. I agree it’s worth more because of its location. I also agree we’re definitely going to make more money than we have been. It’s a steady stream of income and a renewable resource,” said Knutson, who made the motion to accept the terms, contingent on final suggestions from legal counsel. It was approved 3:1 with Hart opposed.
In other news, Public Works Supervisor Travis Scheck will be out of commission for at least six weeks due to surgery. The city has temporarily worked out the hiring of former Public Works Supervisor Bob Theriet and Jon Pettit for the plowing of city streets while Scheck is out. Overland and Ebner are currently doing water and wastewater checks. However, the city will need to contract will for items that need water or wastewater licensing to address. It’s likely a recommendation for that will be ready by the next council meeting.
The discussion also continued in regard to a part-time maintenance worker to assist with mowing and other small tasks. In the past, the city had both part-time and on-call workers. The personnel committee will update the job description before bringing a recommendation to the council.
The next regularly scheduled council meeting is Tuesday, February 18, at 7 p.m., at the Village Hall. The public is encouraged to attend.
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