Town of Webster
1
Effect of Renewable Natural Gas Investment Tax Credit on Wastewater Treatment Plant Project November 20, 2025
2
POTENTIAL RNG INVESTMENT TAX CREDIT RANGE
Results per Withum, Smith & Brown, P.C. Safe Harbor CPA Memo
Total RNG ITC Basis Eligible for the Tax Credit Qualified Applicable Percentage per the IRS Projected Gross RNG ITC Credit Reduction for Municipal Tax Exempt Financing - 15% Projected Net RNG ITC Credit
WITH MIN ITC
WITH MAX ITC
26,752,993
33,441,242
30%
30%
8,025,898
10,032,373
(1,203,885)
(1,504,856)
6,822,013
8,527,517
3 ORIGINAL WWTP PROJECT VS. RNG PROJECT Below is a comparison of the expected serial bond borrowing for the current project vs. the RNG project at the minimum and maximum ITC credit amounts: NO ITC
WITH MAX ITC
WITH MIN ITC
Original Project Per 9/5/24 Bond Resolution
Projected Financial Results with RNG Maximum ITC
Projected Financial Results with RNG Minimum ITC
Expected Project Cost
87,000,000
96,000,000
96,000,000
Proceeds from WEDA Grant
(20,000,000)
(20,000,000)
(20,000,000)
0
(8,527,517)
(6,822,013)
67,000,000
67,472,483
69,177,987
DESCRIPTION
Projected RNG Investment Tax Credit from the IRS Net Amount to be Borrowed via Serial Bonds
4 PROJECTED IMPACT ON TOWN FINANCIAL STATEMENTS Below is a comparison of the expected annual cost for the current project vs. the RNG project at the minimum and maximum ITC credit amounts. The RNG project will result in an annual savings of $353,000 to $428,000.
NO ITC Original Project Per 9/5/24 Bond Resolution
WITH MAX ITC Projected Financial Results with RNG Maximum ITC
WITH MIN ITC Projected Financial Results with RNG Minimum ITC
4,020,000
4,048,000
4,151,000
Sale of Pipeline Quality Natural Gas
0
(506,000)
(506,000)
Renewable Natural Gas Processing Cost
0
50,000
50,000
Projected Net Annual Cost of Capital Project
4,020,000
3,592,000
3,695,000
428,000
353,000
Principal & Interest
Net Annual Cost Savings from Current Capital Project
5 DEBT SERVICE VALUE OF SAVINGS FROM RNG PROJECT Each $1,000,000 of funds borrowed equates to $60,000 per year in debt service costs. Therefore, the RNG tax credit savings of $353,000 to $428,000 is equivalent to a reduction in borrowing of $5,883,000 to $7,133,000. This will go a long way toward funding the Vosburg Road Pump Station project or fulfilling other needs within the sewer system.
Net Annual Cost Savings from Current Capital Project Debt Service Value of Net Annual Cost Savings
WITH MAX ITC
WITH MIN ITC
428,000
353,000
7,133,000
5,883,000
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Town of Webster Effect of Renewable Natural Gas Investment Tax Credit on Wastewater Treatment Plant Project
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