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NEW BUSINESS -11A <br />-fiRPEN HILLS <br />MEMORANDUM <br />DATE: October 28, 2024 <br />Honorable Mayor and City Councilmembers <br />TO: Jessica Jagoe, Interim City Administrator <br />FROM: Joua Yang, Finance Director <br />SUBJECT- Adoption of Ordinances for Implementation of Electric Franchise Fees and <br />Renewal of Existing Electric and Gas Franchise Agreements <br />Budgeted Amount: Actual Amount: Funding Source: <br />N/A N/A N/A <br />Council Should Consider <br />Motion to approve, table, or deny the following: <br />• Adoption of Ordinances 2024-012 and 2024-013 for implementation of Electric Franchise Fee <br />Ordinance and renewal of Electric Franchise Agreement Ordinance with Northern States <br />Power and authorization to publish a Summary Ordinance of 2024-012 and 2024-013. <br />• Adoption of Ordinance 2024-014 for renewal of Gas Franchise Agreement Ordinance with <br />Northern States Power and authorization to publish a Summary Ordinance of 2024-014. <br />Approval for authorization to publish summary ordinance requires an affirmative vote of four councilmembers. <br />Background <br />Franchise fees are an equitable way to raise funds for important infrastructure needs. A franchise <br />fee can only be implemented through a franchise agreement with the local energy provider (Xcel <br />Energy). The City is anticipating future gaps in funding for infrastructure needs, largely due to <br />increased costs for the new Lake Johanna Fire Department (LJFD) station project, trail projects, <br />and an equipment needs schedule. <br />After an open house held in April 2024 and several work session discussions, Council's consensus <br />was in favor of implementing electric franchise fees, to be directed towards the new Lake Johanna <br />Fire Department station. Ehler's provided preliminary debt service schedules, to align with the <br />construction of the new facility, with debt service payments expected to occur in February 2026. <br />Staff recommends adoption of the franchise fee options no later than November 2024, to allow <br />Xcel to meet the Public Utilities Commission's requirements. <br />Below is a timeline of key dates to ensure proper implementation of franchise fees in order to meet <br />the City's bonding need in the spring of 2025. <br />Page 1 of 2 <br />