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ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION — OCTOBER 14, 2024 6 Councilmember Holden said that in a 15 year period, they are going to want another fire truck for $1.5 million. Paying off this debt so that the levy pays for fire equipment is a priority. Then they won't have that extra fee so they can put the other money on the levy. Mayor Grant wanted confirmation that this council has agreed this fee will go for the building only. Councilmember Rousseau said that was her understanding from the beginning. Councilmember Monson said if we get payment early or we have money before the bonding that's required, she would expect that to go to the fire station and no other use. Councilmember Holden said she wasn't worried about another use, she doesn't want to hang on to money while paying interest. She thinks hanging on to the money because we may be short later, essentially loses the City money. Mayor Grant asked if we can use the fee schedule at Xcel to project the amount of money needed for the 15-year period. Finance Director Yang confirmed. Mayor Grant said there should be no surprises. Finance Director Yang confirmed. Councilmember Monson clarified we have a bond and a specific payment for that bond. We are going to raise franchise fees 10% above that amount for 15-years. If rates drop, we maybe won't need $395,000. She speculated if it was $375,000 as a requirement on the bond payment, would we only take an additional 10% over the $375,000 vs. $435,000 or do we have to set the number? Mayor Grant said we have to set the number. He wants to make sure that we are covered for the building. He realizes we might create a scenario where there is some extra money. He doesn't know if we can foresee that scenario, at this point. That may be a discussion for a future council 4 or 5 years out. Councilmember Fabel said the bond debt is to the bond holders. Bond holders are entitled to receive a certain amount of money every year, based under the contract. If there is more revenue coming in, than is required for those payments, we can't pay off the bond holders early and make that obligation go away. The debt will be structured in a way that is prescribed in advance. Mayor Grant said you can call a bond. He thinks this is a callable bond. Finance Director Yang confirmed. Mayor Grant said we could pay off the bond holder early. After 10 years, maybe before, you can refinance. We haven't really talked about that option. A bond holder who knows it can be refinanced for a shorter period of time might be less likely to buy the bond. So it could be more costly. Those decisions should be talked through with Ehlers. He agrees that the bond schedule is what it is. To cut it short, you can refinance but that's the bond holder's schedule. Mayor Grant said this is a work session to gather information with no final decisions being made. He thinks he heard three members agree with the $435,000.