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ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION— SEPTEMBER 23, 2024 7 Councilmember Rousseau would like to see options at$3.00, $3.50 and $4.00. She would also like to try to keep the small commercial and industrial at the lower rate. She prefers to put it on the large commercial and industrial to carry more of the weight. Mayor Grant asked Mike Wilhelmi when Xcel sets a franchise fee, do they have to level set residential to commercial? Can you weigh one heavier than the other? Mike Wilhelmi said the Council has a lot of options available. He said a resident will use a lot less energy than a business. It makes sense that the commercial and industrial properties will take more. Councilmember Holden thinks a small business can utilize a significant amount of electricity and a larger business, a lot of them, are very energy efficient and may be using less. She wondered how it breaks down. Mike Wilhelmi said it's not broken down by the size of the business. There are categories based on usage. Councilmember Holden said small businesses may use a little more energy. She would like to see businesses with less than 10 employees have a lower rate. Even if they use more electricity, they don't have stockholders. They need to make payroll. Mike Wilhelmi said non-profits and schools also pay franchise fees. Councilmember Rousseau said that is why Council dedicated this funding source to the fire department because all of those entities also use the services of the fire department. Councilmember Holden said Presbyterian Homes has a lot of locations and are already paying the franchise fees elsewhere. This will be nothing new for them. Councilmember Monson said she is supportive of the proportion of share where residents pay the lowest, with small commercial and industrial at the next level and it grows based on usage. She thinks that structure will help support the small businesses by charging a smaller fee. Mike Wilhelmi shared a preliminary run of what amount each category would pay to reach the $455,000 amount discussed earlier. If the share was $3.50 for residential, $4.50 for C/I non- demand, $24 for demand and $325 for large C/I. The councilmembers thought that was reasonable. Mayor Grant asked how much debt service that would fund. One option is to make up the difference in a different way. Councilmember Rousseau thought Council could select the 15-year plan and try to pay it off sooner. Councilmember Monson agreed if we can save on interest.