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ARDEN HILLS CITY COUNCIL — OCTOBER 28, 2024 9 <br />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 />Finance Director Yang commented despite one ordinance being for electrical service and the <br />other for natural gas service, the provisions of the two ordinances are nearly identical, with the <br />exception of that the proposed new franchise fee rates are included in the electric franchise <br />agreement ordinance under Section 9. Both ordinances are proposed to have twenty-year terms <br />which is the same term as the existing agreements. The City's existing gas ordinance is set to <br />expire in 2029 and is being brought forward for renewal to align with the two electric franchise <br />agreements. There are no changes to the gas ordinance as the City will not be imposing a <br />franchise fee on gas utilities. <br />Finance Director Yang reported the City will need to adopt a new and separate ordinance for <br />implementing an electric franchise fee. The City has not imposed a franchise fee on gas or electric <br />services in the past. The franchise fee structure will be a monthly flat fee on each premise. The fee <br />structure can be amended anytime throughout the twenty-year agreement. These <br />ordinances/agreements have been reviewed by the City Attorney and will need to be fully <br />approved and executed prior to Xcel Energy's implementation of franchise fees on customers' <br />bills. Staff reviewed a potential timeline for the franchise fee ordinance and recommended <br />approval. <br />Councilmember Fabel noted the proposed ordinance establishes the residential rate at $3.25 and <br />staff presented a franchise fee of $3.00. <br />Mayor Grant commented the final document will reflect the rate the Council approves. <br />Councilmember Rousseau explained her interest in the proposed franchise fee was to distribute <br />the public safety expense amongst all residents and businesses in the community. She reported <br />she was interested in the franchise fee within Schedule A because it would have commercial <br />properties paying an additional $10 or $20 per month versus residents. <br />Councilmember Holden asked how many people completed the survey. <br />Finance Director Yang reported 73 residents responded to the survey. <br />Councilmember Holden commented one of the speakers asked that the City delay building the <br />fire station. She explained the City has a contractual Joint Powers Agreement between Arden <br />Hills, Shoreview and North Oaks, requires the fire station to be built in 2025. She asked how <br />many non -profits were located in Arden Hills. <br />Mayor Grant estimated there were close to 80 non -profits in Arden Hills. <br />Councilmember Monson stated she supports the franchise fees. She understood it was an <br />imperfect process, but the franchise fees would provide the right outcome. She indicated the City <br />has held public hearings and has written about the franchise fee within the Arden Hills Notes. She <br />indicated the City was not trying to hide the fees from the public, but rather was trying to mitigate <br />the concerns. She reported if the City were to levy for this, the City would have an additional 8% <br />