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ARDEN HILLS CITY COUNCIL WORK SESSION - MAY 19, 2008 5 Mayor Harpstead agreed stating that an adjustment of rates would realign the City with its prospective goals but would need regular reviews. Councilmember Holden stated it would be nice for the City to maintain a positive cash flow with regard to the utility rates. She wasn't in favor of future bonding and indicated she was most in favor with Option II as well. Councilmember Holmes indicated she was leaning towards Option III because it affords the seniors a benefit while placing all residents on a level playing field. Mayor Harpstead was in agreement stating he was in favor with Option III because in a fully built City there was a baseline volume of consumption that could be modeled around. He stated there should be a stable demand in consumption. Councilmember McClung indicated he was in favor of Option II as the City did have a mature population, which would be turning over in the future. Finance Director Sue Iverson stated the benefit to Option II over Option III was that the City was given more insurance during a wet year with the base meter fees. Councilmember Grant noted a comparison to neighboring communities water/sewer rates would be helpful in explaining Option II as this information is passed along to the residents. Mayor Harpstead indicated it was the consensus of the City Council to direct staff to prepare proposals on Option II, including future SAC and WAC fees, while trying to lessen the rate increase impact of the first year. A. TCAAP FinaDcials Stacie Kvilvang, Ehlers & Associates, reported the Council last discussed the TCAAP financials in October of 2007. She stated she would review the numbers again pointing out which have changed since that time and what the future steps are to keep the process moving forward. Ms. K vilvang handed out a hardcopy to each of the Councilmembers of the sources and uses they reviewed last october, stating this would be collected after tonight's review. She further reviewed the development program with the Council and indicated that after the October meeting the Council was interested in a reduced density at this site. Ms. K vilvang reported the density was reduced by 200/0 in residential units and commercial development. She stated there would now be 1,750 residential units with 2.2 million square feet of commercial space. Ms. K vilvang indicated this would bring in approximately 3,400 new residents. Discussion ensued among the Councilmembers regarding the TCAAP financials, the breakdown of land usage and land values. Councilmember Holden questioned what the average home price would be within this new development.