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ARDEN HILLS CITY COUNCIL WORK SESSION — JANUARY 16, 2018 2 Councilmember Dave McClung mentioned that the Governor released his bonding proposal focusing on statewide infrastructure projects but the public safety emergency operations center that was slated to go on the TCAAP property was not listed. He also noted the Governor proposed money for the Metropolitan Council to continue Inflow and Infrastructure (1&I) grants to cities. Councilmember McClung asked that Representative Jessup strongly support that program. Mayor Grant asked what types of funding Representative Jessup would favor. Representative Jessup responded that bonding will most likely be a part of the budgeting process but right now the forecast is good and there may not be much budget work to be done. Councilmember Holden wanted to revisit the I&I and the possibility of the formula being changed to penalize cities that have been working on the I&I. Representative Jessup concurred that cities that have been proactive should not be penalized. Mayor Grant requested that Representative Jessup come back to a regular Council meeting to give a recap of the upcoming legislative session. B. Utility Rate Study Ehlers Senior Municipal Advisor Stacy Kvilvang shared a Powerpoint presentation highlighting the utility rate study that was conducted by Ehlers to assess the health of the City's utility funds. The main findings were: the water fund had a sufficient cash balance; the sewer fund has an insufficient cash balance and will need increases; the storm water fund is sufficient; the City should eliminate the undeveloped surface water management fee, and could eliminate the standby fee and incorporate it into a flat fee meter charge. None of these findings will create a significant impact to users. Councilmember Holden asked for an explanation of the difference between the charges of meter and standby. Ms. Kvilvang stated that meter is the actual water meter charge, standby is an additional fee that is charged for water hydrant replacement, fire protection etc. Ms. Kvilvang clarified that the rates they are proposing for 2018 also includes the debt service. Ehlers Senior Financial Specialist Jeanne Vogt explained the options they are presenting are all revenue neutral. So when the meter charge is lowered slightly the consumption charges go up slightly to generate a sufficient amount of revenue, but only as much as customers need to be charged to balance the funds. Mayor Grant felt that eliminating the miscellaneous charges by bundling them will make the bill easier for the customers to read and understand. Ms. Kvilvang mentioned that the rates should be looked at annually.