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ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION — OCTOBER 14, 2024 2 annually. That's the same amount that Land O Lakes or Boston Scientific would pay. He doesn't think it's right that a non-profit would pay the same as a large company in property taxes. It's not right. A franchise fee is not a good way to go if you want to increase revenue. A 15-year bond, financed through property taxes. 2. RESPONSE TO PUBLIC INQUIRIES None. 3. AGENDA ITEMS A. Franchise Fee Discussion Update Mayor Grant welcomed Mike Wilhelmi from Xcel Energy. Mike Wilhelmi said he doesn't have anything new to present but is available to answer questions. Finance Director Yang continued the conversation regarding funding for the Lake Johanna Fire Department. The focus is specifically on the Preliminary 2025 General Obligation CIP Bond Schedule provided by Ehlers and Electric Franchise Fees rate options provided by Xcel Energy. Finance Director Yang reminded that at the September 23 Work Session, council directed staff to work with Xcel Energy to provide council with various rate options that align with Ehlers' bank qualified AAA BQ Bond schedules. It is difficult to predict where interest rates will land. However, based on anticipated federal interest rate conditions, the AAA bank qualified current rates would be the most likely scenario the city should anticipate. The Attachment B contains nine electric franchise fee rate options at the AAA bank qualified rates and corresponding revenue targets of $330,000, which is based on a 10-year bond; $395,000, which is based on a 15-year bond; and $542,000, which is based on a 20-year bond. Finance Director Yang said staff is seeking direction from council on what term or debt schedule council would like to move forward with. The fee options assume the residential properties are assessed a monthly fee between $2.50 and $4.25. Small C&I: Non -Demand properties are assessed a monthly fee between $3.25 and $5.75, and other property rates varying slightly. Attachment C provides a comparative analysis of the franchise fee and/or property tax increase and the impact to residential, manufactured home, apartments, and commercial properties under the $395,000 revenue target. Staff recommends adoption of the franchise fee rate structure no later than November of 2024. That timing is crucial to allow Xcel Energy enough time to meet Public Utilities Commission requirements of 90-days and to ensure cash is available to cover the first debt service payment in February of 2026. A public hearing for adoption of the ordinance is not required. During the September 23 work session, council consensus was not to hold a public hearing but rather add the topic as a new business item to include the steps council took to inform residents of the process. Finance Director Yang said the second item staff seeks direction on is the new business item at the October 28 meeting. What additional thoughts, if any, should staff consider?