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ARDEN HILLS CITY COUNCIL WORK SESSION—MAY 13, 2024 4 Council may also want to discuss what, if any, additional public engagement is needed. A separate public hearing for franchise fees is not required, the City can choose to approve ordinances and a franchise agreement with Xcel Energy. If Council decides to move forward with a franchise fee, Staff recommends having it in place no later than October 1 for implementation in 2025. If Council decides to move forward with a levy increase, it would need to be done in- conjunction with the preliminary 2025 levy at the end of September. It was noted staff will need direction in July on how to proceed forward. Mayor Grant stated one of the comments from the public was that they did not want the franchise fee to go on indefinitely. He explained franchise fees run on a contract and a Council in the future would have to vote to stop or extend the franchise fees. Councilmember Rousseau indicated she appreciated the thoughtful comments from the public. She stated the public may not have understood the fees collected would be used for a new fire station. She explained she was in favor of a franchise fee, solely for the fire department. Councilmember Fabel questioned what percentage of Arden Hills was exempt from paying property taxes. Finance Director Yang stated 31% of the property in Arden Hills was exempt from paying property taxes. Councilmember Holden supported the franchise fee moving forward solely for the fire station and recommended a sunset date be included for this fee. Mayor Grant agreed, noting the fire station was the pressing need for the City. Councilmember Rousseau recommended that if the franchise fee moves forward that the purpose of the fee be clearly defined for the public and that the franchise fee be discussed at future Truth in Taxation meetings. Councilmember Fabel questioned if the City understood the income level of the people who participated in the survey. Finance Director Yang explained the City did not have this information. Councilmember Monson commented the outcome of a franchise fee was the right choice for the City. She indicated the cost of a bond was just shy of $600,000 and to her this was harder to support. She explained the methodology of a franchise fee is not perfect given that it would be a flat fee passed along to all utility users. She noted State Law does not have the same requirements for a franchise fee as it does for a levy, but she supported building a culture of making it clear to the citizens as to why we are doing a franchise fee and adding it to our notes and processes. She stated a franchise fee may not be perfect, but it would get the desired outcome for the City for the new fire station. She indicated she would be willing to work with Xcel on a marketing partnership in order to reach out to the City's manufactured homes on payment assistance programs. Mayor Grant reported he spoke with Xcel also regarding the PIE (Partners in Energy) program. He understood the PIE program offered additional insulation for manufactured homes that