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ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION— SEPTEMBER 23, 2024 2 <br /> Council was in favor of implementing electric franchise fees to offset debt service for the new fire <br /> station in 2025. <br /> Finance Director Yang said at the August 19th budget work session, Council directed Staff to <br /> work with the City's Financial Advisor, Ehlers, to determine the timing and structure of a bond <br /> issuance to occur in the spring of 2025. This would align with the anticipated development of the <br /> new fire station. She pointed to Attachment A in the agenda packet, which is the preliminary <br /> series 2025 General Obligation Capital Improvement Plan bond schedules. This includes one <br /> scenario at bank qualified rates and another with a 75 basis points for cushion. The scenarios <br /> assume the bonds would settle on May 15, 2025, with maturity dates of 10, 15 or 20 years. <br /> Finance Director Yang asked for direction on what term or debt service schedule Council would <br /> like to adopt. This decision will inform the targeted revenue structure. <br /> Finance Director Yang pointed to Attachment B in the agenda packet, which contains three <br /> Electric Franchise Fee rate options. Those scenarios assume a$375,000 revenue target. This is the <br /> amount in the 2025 Preliminary Budget. Residential properties will be assessed a$3.00 monthly <br /> fee and the amount varies slightly for other property types. <br /> Finance Director Yang said with the first debt payment expected in February of 2026, Staff <br /> recommends adoption of ordinances and rate structure no later than November 1 for <br /> implementation by February 1 of next year. Staff confirmed with the City Attorney that a public <br /> hearing for adoption of the ordinance is not required. The City can choose to hold a public <br /> hearing, if they so choose. <br /> Finance Director Yang introduced Mike Wilhelmi from Xcel Energy who stood for questions <br /> regarding implementation of rate structure or the program specifics. <br /> Mayor Grant said Council should discuss the bonding first. <br /> Councilmember Holden wanted to verify that the franchise fees have been in the newsletter <br /> twice, there was an open house, as well. So it has been advertised. Finance Director Yang <br /> confirmed. <br /> Mayor Grant wanted to clarify something from the packet. There were 73 residential survey <br /> responses. The 54% was a combination of electric only, gas and electric. Finance Director Yang <br /> confirmed. <br /> Mayor Grant said there was an additional 17%who chose a hybrid of both. He said at a <br /> subsequent council meeting it was discussed that the franchise fees would be used for the fire <br /> station, only. He asked Council's opinion on the various debt maturity levels. <br /> Mayor Grant asked how much of a financial commitment Arden Hills has in the new fire station. <br /> He thought there was a potential $3 million bonding from the feds. <br /> Councilmember Monson said there is no update, because their budget needs to be passed. She <br /> said we have to assume we won't get it. Then if we do get it, it'll be the cherry on top. <br /> Mayor Grant asked if the amount was still $18 million. <br />