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• October 28, 2024 — City Council Franchise Fees Ordinance & Agreement • November 2024 — January 2025 — PUC review of Franchise Fees • February 2025 — Implementation of Franchise Fees (aligns one year in advance of debt service payment) • Tentative May 15, 2025 — Cities Issuance of Bonds for LJFD Headquarters • February 2026 — Debt Service Payment Xcel Energy is the natural gas and electric service provider to properties in the City of Arden Hills. Ordinance 2009-014, electric distribution and transmission franchise ordinance, and Ordinance 2009-015, the natural gas franchise ordinance, were approved by the City on November 30, 2009. Both ordinances have twenty year terms that expire on November 30, 2029. City staff and the City Attorney have been working with Xcel to prepare updated franchise ordinances for review. While the franchise agreement is structured as an ordinance, it is legally considered a contract that requires approval from both parties. According to the League of Minnesota Cities, the primary purpose of these franchise ordinances is to provide uniform provisions that incorporates the broad municipal statutory franchise rights that exist in Minnesota Statues and rules from the Minnesota Public Utilities Commission (MPUC) into an ordinance or agreement for each service. The franchise agreements also provide the City an opportunity to negotiate and charge a franchise fee, which is discussed in further detail in the below section. It is important to note that the franchise agreements only apply to the use of public rights -of -way and public property, which includes public roads, parks, and trails. Electric or gas lines that cross private property are subject to the regulations in the underlying private easement. Lastly, the City Council directed city staff to bring forward at the October 28th City Council regular meeting, the necessary ordinances for implementation of electric franchise fees and associated agreements. A public hearing is not required for ordinance adoption, the Council elected as part of the process to allow an opportunity for public comment as part of this meeting. Proposed Ordinances The draft ordinances are based on the League of Minnesota Cities (LMC) model ordinance, updates proposed by Xcel, and language provided by the City Attorney. While there is some flexibility in the language of the ordinance, much of it is guided by existing Minnesota statutes and rules. Existing Franchise Agreement Ordinances Despite one ordinance being for electrical service (Attachment E) and the other for natural gas service (Attachment F), the provisions of the two ordinances are nearly identical, with the exception of that the proposed new franchise fee rates are included in the electric franchise agreement ordinance under Section 9. Both ordinances are proposed to have twenty year terms which is the same term as the existing agreements. The City's existing gas ordinance is set to expire in 2029 and is being brought forward for renewal to align with the two electric franchise agreements. There are no changes to the gas ordinance as the City will not be imposing a franchise fee on gas utilities. Page 3 of 4