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ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION — OCTOBER 14, 2024 3 Finance Director Yang said Mike Wilhelmi can help answer any specific questions regarding rate options, structure or implementation. Mayor Grant asked if the options provided are the only options. Mike Wilhelmi said the council has a wide variety of options. These options were selected based on previous discussions. He noted Option B in each of the scenarios is a neutral option for rate payor types. Option A will place more of the burden toward the large C&I customers. Option C would be residential customers paying more of the overall burden. He noted each option produces about the same revenue. These were the options he chose to present. Xcel Energy has no position on if franchise fees should be used or on the amounts. Mayor Grant asked if the option would have to be approved by the Public Utilities Commission (PUC). Mike Wilhelmi said when the City and Xcel reach an agreement it will need to be filed with the PUC. That would give them the authority to levy the taxes on behalf of the City. Then Xcel would collect the money and give it to the City on a quarterly basis. Councilmember Holden said it was brought up that non -profits are being asked to pay a majority of this. That was not the intent. She said Land O Lakes already pays property tax. She asked if 40% of their tax already goes towards police and fire. Finance Director Yang confirmed. Councilmember Holden said if Land O Lakes is already paying a big share for the fire department. She said North Heights isn't paying and Presbyterian Homes and Health Partners are big users of the fire department and don't pay anything. She said, knowing that the commercial properties already pay a large amount of their property tax towards the fire department, she doesn't have a problem with charging the non -profits a small amount for it. She's okay with the $3,000. Councilmember Rousseau said that was one of the reasons the decision was made to stick with funding just the fire department and not try to include bonding for the trails. This is separated differently than a tax levy is. This gives it a more even spread. She said previously there was interest in looking at a 15-year and hoping to pay it off early if Rice Creek Commons goes forward there would be more electric users. She is interested in talking about the 15-year under Option A-2 with the $395,000 every year. Councilmember Holden agreed. It's an extra half a million dollars going from a 15-year to 20- year, in interest alone. Mayor Grant said the 20-year is out of the question for him. The total interest on a 20-year is huge. He thinks we'd be better off to scale it back to 15 years, maybe even 10 years. Councilmember Monson is okay with the 15-year option. Her question is if the 15-year is selected, do we want to match the franchise fee to the payment, or do we want to have a higher franchise fee to help pay it off faster. If interest rates go down, refinancing could be an option. She supports Option A-2.