WAPS receives $5.5M tax credit for geothermal projects

Geothermal dehumidification systems have already injected new life into two historic Winona Area Public Schools elementary schools. 

Now, a federal tax credit tied to those projects will open the door for the possibilities of additional improvements to the educational environment for Winona area students, staff and community members. 

Superintendent Brad Berzinski on Thursday night shared with the school board that the district has received a check for $5.5 million, the culmination of two years of work to apply for a federal tax credit available to entities that meet certain criteria for energy efficiency projects.

“I am grateful,” school board chair Nancy Denzer said. “I am excited about what this means and appreciative of all the people who spent so much time on this.”

The tax credits were made possible through the Inflation Reduction Act of 2022 and preserved by the current presidential administration in the summer of 2025. With the support of Baker Tilly, a tax consultant, WAPS applied for the credit in December of 2025. The elective pay portion of the law allows tax-exempt and government entities, like school districts, to receive the equivalent amount of the tax credit directly from the federal government.

There is no restriction from the federal government or the Minnesota Department of Education on how the funds can be spent. However, the district plans to use the additional funds on one-time purchases instead of applying them to recurring expenses. These one-time expenses could include capital projects such as building enhancements or upgrades to classroom equipment. 

“The geothermal systems have made significant and positive improvements to the learning environment at Jefferson and W-K,” Superintendent Brad Berzinski said. “We were always hopeful that the projects would qualify for the tax credit, but we never counted on it. Now that the funding is secured, it opens up a world of possibilities for strategic, one-time capital investments that will benefit our students and staff for years to come.”

Berzinski reiterated this message to the school board during Thursday night’s meeting, strongly suggesting not to use these funds to address recurring expenses as part of the work to balance the annual budget. 

Several board members made sure to mention the work that school board vice chair Karl Sonneman did in pursuing these tax credits. Despite initial skepticism from others,  Sonneman read through the bill, considered ways that it could apply to the geothermal projects at W-K and Jefferson, then connected with advocates and other elected officials to put a plan together. 

“I am really grateful to Director Sonneman for going into that bill and taking the leadership to advocate for this and not give up on it,” board member Michael Hanratty said. “It’s easy to say ‘This is way too much work, it’s not worth our time.’ This wouldn’t have happened without his leadership. It was a brave thing to do to go forward with this project and the tax credits.”

Sonneman even traveled to Washington, D.C., as part of a trip organized and paid for by UndauntedK12, a national nonprofit that helps public schools access federal tax credits for qualifying clean energy projects. Sonneman met with staff members from the offices of Sen. Tina Smith, Sen. Amy Klobuchar and Rep. Brad Findstad to advocate for entities like WAPS to be able to access these tax credits. 

The $5.5 million tax payout is one of the largest received by a school district in the nation, according to information compiled by UndauntedK12. WAPS is also one of the first districts in Minnesota to receive the credit specifically for a geothermal unit. 

Citing health and safety concerns for students and staff, the school board in November of 2021 approved using special levy authority to begin the process to install geothermal dehumidification systems at Jefferson and Washington-Kosciusko.  Kraus Anderson was selected to manage the project.  Construction started in the summer of 2023 and was completed in time for the 2024-25 school year. 

In January 2024, Baker Tilly outlined the steps the district would need to take in order to maximize eligibility for the tax credit, which included meeting wage and apprenticeship requirements for the workers on the project. Baker Tilly will continue to work with WAPS to monitor any repair work and to make sure the district is meeting the requirements necessary for the tax credit. WAPS spent approximately $218,000 with Baker Tilly to pursue the credit.

Meanwhile, the systems have been fully operational in Jefferson and W-K for the last two school years and have handled the dramatic swings in Minnesota weather. In addition to improved air quality, the buildings received other upgrades as well, including improved lighting, new ceiling tiles in classrooms and plumbing fixes. There are plans to offer summer programs in both buildings, something that was never considered previously due to the lack of climate control. 

“We have two buildings that have some very good quality air and a healthy place for our students and staff to learn every day,” Denzer said. “The work putting this into our buildings can never be overstated enough. We’re now seeing the results.”