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ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION — AUGUST 19, 2024 18 Finance Director Yang provided a Municipal State Aid (MSA) summary. We have anticipated $315,000 of allocation annually. We are up for advancement in 2025. She pointed to the balance and the projects that will use the funds. We are underfunded but will be wholly funded by the beginning of 2044. There are enough projects in the queue to utilize the MSA funds. Mayor Grant asked when we take an advance, do we have to be no more than five years in arrears. Public Works Director/City Engineer Swearingen wasn't sure what the current rules are. There have been some changes. He will look into it further. Councilmember Holden asked where we are now. She thought we borrowed up through 2026. Public Works Director/City Engineer Swearingen said we just started getting funds again this year. We are paid back. We will be able to use those funds towards eligible projects costs. Councilmember Holden asked how much we have. Public Works Director/City Engineer Swearingen stated if funds come in, we have a place to put them. Right now, the balance has been funded by the PIR account. Now that we're receiving funds, we can throw it at the balance because it's an MSA eligible item. Mayor Grant asked if there is a backlog to apply to. Public Works Director/City Engineer Swearingen confirmed. Basically, the MSA is paying back the PIR. Future projects are designed as if we're putting state aid dollars toward them. Councilmember Holden asked how we can be taking the 2024 $315,000 when we haven't paid back all the other MSA. She thought we used MSA for Glen Paul and the roundabout. Public Works Director/City Engineer Swearingen confirmed the right of way costs were eligible for that. We didn't use MSA dollars because we don't have any. We funded with PIR. Now we're paying ourselves back with the MSA. Discussion ensued regarding a table included in the presentation. Finance Director Yang explained the balance is underfunded. This means that our project expenditures exceed the MSA allocation. Finance Director Yang discussed the CIP funding update. The $575,000 is the updated funding gap. We will move forward with a franchise fee. She asked when Staff could anticipate an implementation date. She stated if the plan is to start collecting those fees in January 2025 an ordinance would need to be passed 90-days prior. So by October I". She asked if January 2025 is the timeline? Councilmember Monson thought maybe 2026. She wasn't sure when the bond payments are. She thought if we got the first bond payment, then Council can discuss if this will be done this year or wait until 2026.