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New Franchise Fee Ordinance <br />Attachment D is a new and separate, draft electric franchise fee ordinance. The City has not imposed <br />a franchise fee on gas or electric services in the past. The franchise fee structure will be a monthly <br />flat fee on each premise that will take effect 90 days after written notice to Xcel following the Public <br />Utilities Commission review period. The fee structure can be amended anytime throughout the <br />twenty-year agreement. <br />These agreements have been reviewed by the City Attorney and will need to be fully approved and <br />executed prior to Xcel Energy's implementation of franchise fees on customers' bills. <br />Additional Information and Considerations <br />According to Minnesota Statute 216B.36, a city may impose a franchise fee on a gas or electric <br />utility for the use of the public right-of-way by adopting an ordinance that establishes fee terms, <br />including structure, collection, schedule and effective dates. Franchise fees are established by <br />ordinance which provides an opportunity for the City Council to adjust these fees as needed. <br />Franchise fees can be used for any public purpose, but Arden Hills will be designating these fees <br />towards the new LJFD station. <br />When comparing franchise fees to the property tax levy as a revenue source, advantages include: <br />• Proportionate share of fees across all property owners (includes non -profits) <br />• Diversifies the City's revenue sources <br />• Provides a reliable source of revenue on an annual basis <br />• No administrative cost to the City as Xcel collects the fees <br />The City Council will be asked to make a formal decision regarding the implementation of franchise <br />fees and renewal of franchise agreements under Agenda Item 11A. <br />Budget Impact <br />None as the revenue generated from the electric franchise fees will be directed to fund the <br />construction of the new LJFD station. <br />Attachments <br />A. Preliminary Series 2025 General Obligation CIP Bond Schedules <br />B. Electric Franchise Fee Rate Structure Scenarios <br />C. Comparative Analysis — Property Type <br />D. Draft Ordinance 2024-012 Northern States Power Company Electric Francise Ordinance with <br />Fee <br />E. Draft Ordinance 2024-013 Northern States Power Company Electric Franchise Fee <br />Agreement <br />F. Draft Ordinance 2024-014 Northern States Power Company Gas Ordinance without Fee <br />G. Exhibit PUC Report Franchise Fees Northern States Power <br />H. PowerPoint Presentation <br />Page 4 of 4 <br />