TO: Mayor and Members of City Council
THRU: Dr. Douglas Hewett, City Manager
FROM: Dr. Andrew Mansell, Senior Assistant to the City Manager
DATE: August 24, 2026
RE:Title
Fields Road Solar Facility Lease AuthorizationTitle
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COUNCIL DISTRICT(S):
Council District(s)
1
b
Relationship To Strategic Plan:
This item supports the City’s mission to provide high-quality and sustainable public services and is consistent with Council’s strategic priority to enhance economic growth opportunities throughout the City. The proposed solar facility also promotes responsible stewardship of City-owned assets and supports long-term utility infrastructure and financial sustainability.
Executive Summary:
Staff requests authorization for the City Manager, in coordination with the City Attorney, to negotiate and execute a lease agreement for the use of approximately 40 acres of City-owned property on Fields Road for the development and operation of a solar energy facility.
The principal business terms are:
• $250,000 to the City for use of the property during the initial ten-year period.
• Approximately 40 acres of City-owned property to be used for the solar facility and related improvements.
• Beginning after Year 10, the City’s PILOT from the Electric Fund is anticipated to increase by upwards of $200,000 annually, based on the applicable PILOT formula and the additional Electric Fund investment associated with the project.
Background:
The Fields Road property has been identified for potential use as a solar generation facility serving PWC’s electric operations. The project would place City-owned property into productive public use while supporting additional local electric generation.
Council authorization would allow the City Manager, in coordination with the City Attorney, to negotiate and execute the lease substantially consistent with the business terms outlined above.
Issues/Analysis:
The property is a City-owned parcel of approximately 40 acres at 430 Carvers Falls Road, annexed in August 2025 (AX25-03) and rezoned in September 2025 to permit the solar use. PWC would design, construct, own, operate, and maintain the approximately 4.875 megawatt facility at its sole cost. Title to the land remains with the City, and the solar equipment remains PWC's personal property.
The compensation structure has two parts. The first ten years are contractual: $250,000 to the City for use of the property. The period after Year 10 is a projection: based on the Charter PILOT formula and the additional Electric Fund investment, the City's annual PILOT is anticipated to increase by upwards of $200,000. That increase is a product of the statutory PILOT calculation, not a payment obligation under the lease, and the actual amount each year will depend on the formula as applied at that time.
The proposed term is thirty years from the in-service date with two five-year renewal options. Items remaining for negotiation include the final legal description, insurance and decommissioning provisions, and annual reporting sufficient for the City to see the facility's contribution to the PILOT calculation.
Budget Impact:
The agreement would provide the City with a $250,000 payment for the initial ten-year period.
After Year 10, the additional Electric Fund investment associated with the solar facility is anticipated, based on the current PILOT formula, to increase the City’s annual PILOT by upwards of $200,000.
No City capital expenditure is anticipated for development or operation of the solar facility.
Options:
A. Authorize the City Manager, in coordination with the City Attorney, to negotiate and execute the lease agreement substantially consistent with the business terms presented.
B. Do not authorize the proposed lease.
C. Provide alternative direction to staff.
Recommended Action::Recommended Action
Authorize the City Manager, in coordination with the City Attorney, to negotiate and execute a lease agreement for approximately 40 acres of City-owned property on Fields Road for the development and operation of a solar energy facility, substantially consistent with the business terms outlined herein.
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