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ARDEN HILLS CITY COUNCIL WORK SESSION—JUNE 17, 2013 7 Councilmember Holden questioned how staff would be replacing fire hydrants throughout the City. She anticipated that the City would need to replace more than six hydrants a year given the number of hydrants in the City. Public Works Director Maurer commented that the hydrants were reviewed systematically starting with the oldest ones first. He indicated that hydrants would only be completely replaced when absolutely necessary otherwise broken parts were swapped out. All new hydrants would have stainless steel bolts. He explained that the City had more problems with the valves than with the hydrants. City Administrator Klaers reviewed the timing and phasing of the County Road E bridge project and B-2 corridor that were written into the CIP. He explained that the Council did not have funding for Snelling Avenue within the CIP. Public Works Director Maurer discussed the timing of the Snelling Avenue bridge replacement. Mayor Grant requested the Council now discuss the revenue portion of the CIP and the possibility of setting up a franchise fee program in the City. City Administrator Klaers indicated that the City had no park dedication funds to assist with park and trail improvements. The Equipment Fund balance and needed equipment was reviewed. It was noted that 46% of the community was in the tax exempt classification. These properties generated no tax revenues for the City. City Administrator Klaers discussed the use of franchise fees and how these funds could benefit the budget. He commented that a 1% franchise fee would generate approximately$220,000. This percentage could be increased up to 4%, which would generate $880,000 in additional revenue for the City. It was noted that 75% of electricity usage in the City is consumed by commercial and industrial properties. Mayor Grant stated that hypothetically, the levy could be held down if a franchise fee were put in place. Councilmember Holden was in favor of investigating the franchise fee further. She did not support a 4% franchise fee. She recommended the funds be earmarked for a specific purpose, such as parks. Mayor Grant agreed that the funds should be dedicated. Councilmember McClung also agreed suggesting that a portion of the funds could be dedicated to public safety. Councilmember Holmes asked how much an average residential customer spends on electricity monthly. City Administrator Klaers stated that he did not have this information.