HomeMy WebLinkAbout05-13-24-WSMayor:
Address:
David Grant
1245 W Highway 96
Arden Hills MN 55112
HILLS
Councilmembers:
DEN
Phone:
Brenda Holden
651-792-7800
Emily Rousseau
City Council Work Session
Tena Monson
Website:
Tom Fabel
Agenda
www.cityofardenhills.org
May 13, 2024
5:30 p.m.
City Hall
City Vision
Arden Hills is a strong community that values its unique environmental setting, strong residential
neighborhoods, vital business community, well -maintained infrastructure, fiscal soundness, and
our long-standing tradition as a desirable City in which to live, work, and play.
Members of the public may attend a
meeting in -person at City Hall or they may
view the meeting remotely on the City's
website using the below link. Meetings are
also broadcast on Cable Channel 16 for
those that live in Arden Hills.
httos://cityofardenhilIs.org/320/Watch-City-
Meetinas
This meeting will be streamed live on local Cable Channel 16 and available for playback on our website.
CALL TO ORDER
1. PUBLIC INQUIRIES/INFORMATIONAL
This is an opportunity for citizens to respectfully bring to the Council's attention any
items which are relevant to the City. In addressing the Council, you must first state
your name and address for the record. Comments shall be limited to three (3) minutes
or less. Written documents or other materials should be handed to the City Clerk for
distribution to the Council prior to or during the meeting. Council will generally not
respond at the same meeting where an issue is initially raised by a member of the
public but the Council may refer the issue to staff for further research and possible
report or action at a future Council meeting.
2. RESPONSE TO PUBLIC INQUIRIES
3. AGENDA ITEMS
3.A. Compensation And Class Study Update
Dr. Tessia Melvin, DDA
Documents:
MEMO.PDF
ATTACHMENT A.PDF
3.13. Capital Funding Follow -Up
Joua Yang, Finance Director
Documents:
MEMO.PDF
ATTACHMENT A.PDF
ATTACHMENT B.PDF
ATTACHMENT C.PDF
ATTACHMENT D.PDF
3.C. Rain Garden Discussion
Nancy Jacobson and Liz Johnson, PTRC Members
Documents:
MEMO.PDF
ATTACHMENT A.PDF
ATTACHMENT B,PDF
3.D. Strategic Planning Discussion Follow -Up
Dave Perrault, City Administrator
Documents:
MEMO.PDF
ATTACHMENT A.PDF
ATTACHMENT B.PDF
3.E. Twin Cities Gateway Funding Discussion
Dave Perrault, City Administrator
Documents:
MEMO.PDF
3.F. Rice Creek Commons/TCAAP Discussion
Dave Perrault, City Administrator
Documents:
3.G. Agenda Planning
Dave Perrault, City Administrator
Documents:
MEMO.PDF
ATTACHMENT A.PDF
ATTACHMENT B.PDF
4. COUNCIL/STAFF COMMENTS
ADJOURN
AGENDA ITEM — 3A
EN HILLS
MEMORANDUM
DATE: May 13, 2024
TO: Honorable Mayor and City Councilmembers
FROM: Dave Perrault, City Administrator
SUBJECT: Compensation Study Update
Budgeted Amount: Actual Amount: Funding Source:
N/A N/A N/A
Council Should Consider
Council will receive a presentation from Tessia Melvin of DDA on the ongoing compensation
study.
Background
N/A
Budget Impact
N/A
Attachment
Attachment A: Council Presentation — Comp Study
Page 1 of 1
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FW
EN HILLS
10 I Did El7.7_1►1 Olga 1
DATE: May 13, 2024
AGENDA ITEM — 3B
TO: Honorable Mayor and City Councilmembers
Dave Perrault, City Administrator
FROM: Joua Yang, Finance Director
SUBJECT: Capital Funding Discussion
Budgeted Amount: Actual Amount: Funding Source:
N/A N/A N/A
For Council Consideration
Council should consider providing direction on next steps regarding Capital Funding.
Background
At the August 21, 2023 worksession (Attachment A), the City Council discussed the use of
franchise fees to help support capital projects for the City. Ehler's, the City's financial advisor,
provided an analysis on electric and gas fee structures, in addition to information on other local
municipalities who assess a franchise fee onto their residents and business owners.
At the September 18, 2023 worksession (Attachment B), the City Council discussed the topic at
length and decided that April 2024 would be a good time to have an Open House in order to gauge
residents' opinions on capital funding mechanism including franchise fees.
Staff held a Capital Funding Update Open House on Saturday, April 201h at City Hall. Staff shared
that there is an anticipated future gap in funding for the City, largely due to increased costs for the
Lake Johanna Fire Department Station project ($4.1M), the Old Hwy 10 Trail/Lake Valentine to
Hwy 96 and Lake Johanna trail projects ($3.6M), and a recently revised equipment needs schedule.
Provided are two projected fund balance charts, one that includes the two trail projects and one that
excludes them, as the City has not yet secured outside funding sources for the two trail projects.
With the exclusion of the two trail projects, Staff anticipates the City will have the largest needs in
the Equipment, Building, & Replacement Fund and the Public Safety Fund. If the two trail projects
are included, the City would have an additional need in the PIR Fund.
Page 1 of 4
CIP — Fund Balances Projected
Future Projects (excludes Lake Jo & Old Hwy 10 trail projects)
S; ODO,DDD -
$3,00D, 000
$2,D00,000
$1,000,000
s-
$(1,000,000)
s(2,000,000)
M 000 owl
■ PIR Reserve Balance
Equip, Bldg Reserve Balance Public Safety Reserve Balance
This chart displays the
projected health of three
CIP Fund Balances.
It identifies the
anticipated dips in Fund
Balance, as a result of
budgeted expenditures
exceeding budgeted
revenue resources.
CIP — Fund Balances Projected
Future Projects (includes Lake Jo & Old Hwy 10 trail projects)
53,DDD, DDD
5 DOD, ODD
5 _, DDO, DDO
$-
Si 1, ODD, 000)
ODD, 000)
$15 DDD, CDC
■ PIR Reserve Balance Equip, Bldg Reserve Balance ■ Public Safety Reserve Balance
This chart displays the
projected health of three
CIP Fund Balances.
It identifies the
anticipated dips in Fund
Balance, as a result of
budgeted expenditures
exceeding budgeted
revenue resources.
Attachment C is a one -page recap of the information provided at the Open House, which was
shared on the City's website, along with a survey that was released, thereafter, for City residents
and businesses to provide additional input through Monday, May 6th at Sam. There were 73
residential survey responses, with approximately 54% choosing a franchise fee option (22% -
electric only; 32% - gas and electric), approximately 30% choosing a property tax levy option, and
approximately 17% choosing the combination of property tax levy and franchise fee option. For
those respondents who chose any combination of a franchise fee option, approximately 64%
indicated the City should consider dedicating the fees for a specific purpose. Some common
Page 2 of 4
themes included bike lanes, park and trail improvements; structures and road maintenance; storm
water system maintenance and utility infrastructure; fire station. Respondents also provided their
concerns and additional comments for Council consideration. Some common concerns shared is
that an increase to property taxes would burden taxpayers and would remain in effect indefinitely.
Additionally, some respondents shared that non -profits should be assessed a fee in lieu of taxes,
which would mean assessing a levy increase on residents and imposing a franchise fee on non-
residential and non-profit organizations.
Additional Information and Considerations:
Staff prepared additional analysis to include the impact of a franchise fees and/or property tax
increase to manufactured homeowners, apartment renters, and commercial properties per
Attachment D. Below is an example of the impact to a manufactured homeowner.
In order to generate $455,000 of revenue for the City, a $37,200 average manufactured
homeowner would see an increase of:
• $3.86 per month on their utility bill under an electric -only franchise fee scenario —or-
$5 per month on their utility bill under both a gas & electric franchise fee scenario —or-
e $1.52 per month on their property tax bill under a bonding scenario, where property
taxes are levied to pay back the bond
Monthly Impact on Manufactured Homeowners (MH)
Franchise Fee and/or Property Tax Increase
Home
Cost per Home
Market
Franchise Fee C - Property Tax
Value
A- Electric Only B- Gas & Electric Increase'
#of
Homes
Total
Cost
$ 5,300 $3.86 $5.00 $1.16
57 $
66.12
$
13,100
$3.86 $5.00 $1.25
54
$
67.50
$
27,000
$3.86 $5.00 $1.40
54
$
75.60
$
37,200
$3.86 $5.00 $1.52
54
$
82.08
$
55,200
$3.86 $5.00 $1.72
54
$
92.88
$
172,800
$3.86 $5.00 $3.93
1
$
3.93
Each monthly scenario would generate $455,000 annually
1: Includes an equal share of MH Park Land Property Taxes
274
$
388.11
In July, Council will review a proposed Capital Improvement Plan (CIP). Council may want to
direct Staff on how it wants to see funding allocated for the proposal, or Council may want to see
the updated draft plan and then decide how to allocate funding. Council may also want to discuss
what, if any, additional public engagement is needed. A separate public hearing for franchise fees
is not required, the City can choose to approve ordinances and a franchise agreement with Xcel
Energy. If Council decides to move forward with a franchise fee, Staff recommends having it in
place no later than October 1 for implementation in 2025. If Council decides to move forward with
a levy increase, it would need to be done in -conjunction with the preliminary 2025 levy at the end
of September. Staff will need direction in July on how to proceed forward.
Page 3 of 4
Budget Impact
Budget impacts will depend on how Council wants to proceed forward.
Attachment
Attachment A: August Worksession Memo — Franchise Fees
Attachment B: September Worksession Memo — Franchise Fees
Attachment C: Capital Funding Update Recap
Attachment D: Comparative Analysis — Property Type
Page 4 of 4
Attachment A
AGENDA ITEM — 3C
'It
,-ARZEN HILLS
105 I DIU M ►7_1\111005
DATE: August 21, 2023
TO: Honorable Mayor and City Councilmembers
FROM: Dave Perrault, City Administrator
SUBJECT: Franchise Fee Discussion
Budgeted Amount: Actual Amount: Funding Source:
N/A N/A N/A
For Council Consideration
Council should consider providing direction on moving forward with Franchise Fees.
Background
At the last worksession, the City Council discussed the use of Franchise Fees to help support the
Permanent Improvement Revolving (PIR) Fund. The City's financial advisor, Ehlers, has put
together a memo on the topic and will be present to give an overview and answer questions.
If the Council is supportive, further discussions will need to be had with Xcel, and the Council may
want to consider what marketing activities need to take place to help inform and educate residents.
Budget Impact
N/A
Attachment
Attachment A: Ehlers Memo on Franchise Fees
Page 1 of 1
Attachment A
EHLERS
iM PUBLIC FINANCE ADVISORS
MEMORANDUM
TO: Dave Perrault, City Administrator
FROM: Stacie Kvilvang and Dan Tienter, Ehlers
DATE: August 21, 2023
SUBJECT: Preliminary Franchise Fee Analysis for Electric and Gas Utilities
Recently, the City Council and staff expressed an interest in exploring a Franchise Fee (the "Fee")
to support capital projects and similar needs for the City of Arden Hills (the "City"). Based on recent
City Council discussions and additional direction from City staff, Ehlers developed three preliminary
Fee structures (Attachment A) designed to meet predetermined, annual, revenue targets: 1)
$350,000; 2) $400,000; and 3) $450,000. Generally, these revenue targets support projected
capital expenditures and allow the City to maintain appropriate fund balances.
Pursuant to Minnesota Statutes, Section 216B.36, a municipality may require a public utility to obtain
a license, permit or franchise to operate on public property. Under this statutory authority, the City
may also require public utilities to operate under certain regulations or terms, including the payment
of a Fee. Most often, municipalities craft these arrangements as contracts, which the City Council
then adopts as an ordinance.
Generally, these franchises apply to electric and gas utility providers. The Fee itself may take
different forms, most notably as 1) a percentage of revenues, 2) an amount per production unit (e.g.,
therm, kilowatt hour), or, most commonly, 3) a flat monthly account fee. Often municipalities prefer
the flat fee as both the most transparent option for the account holder and the most predictable
revenue source for City. Generally, the Fee applies to all public utility users, including tax-exempt
properties, and the City may use the revenues for any public purpose. The public utility will pass
the Fee along to ratepayers directly, usually labeled on their bill as "City Fee."
Each scenario relies on a series of assumptions to support their respective revenue targets, most
notably:
• Uses a flat monthly account Fee based on ratepayer class;
• Structures Fee amounts for about 3% to 5% more than the revenue target as coverage;
• Maintains same or similar Fees based on ratepayer class between the two utility types;
• Excludes any Fees for street lighting and municipal pumping; and
• Provides for Fees in amount similar to other metropolitan municipalities (Attachment B).
Additionally, the preliminary analysis relies upon ratepayer counts from 2014. If the City Council
decides to continue the discussion, Ehlers and City staff will contact the utility provider for current
ratepayer counts, update the analysis, including any direction from the City Council, and present
revised estimates at a future City Council meeting or work session.
BUILDING COMMUNITIES. IT'S WHAT WE DO. ® info@ehlers-inc.com % 1 (800) 552-1171 ® www.ehiers-inc.com
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Electric Franchise Fee Comparative Analysis Attachment B
City of Arden Hills, Minnesota
Apple Valley
1.13
7.42
20.13
25.00
Bloomington
4.60
11.90
63.00
182.00
1/1/2023
Brooklyn Park
7.00
7.50
45.00
160.00
3/1/2016
Burnsville
4.00
12.00
40.00
180.00
9/1/2020
Coon Rapids
2.26
14.84
40.26
193.44
4/1/2018
Eagan
1.85
10.00
10.00
20.00
6/1/2023
Eden Prairie
4.00
5.00
12.50
55.00
7/1/2019
Edina
2.90
4.90
13.68
58.32
-
-
7/1/2019
Minnetonka
4.50
4.50
13.50
45.00
4.50
4.50
1/1/2019
Plymouth
2.52
3.79
12.65
50.61
-
-
4/1/2023
St. Louis Park
6.75
12.00
48.50
148.50
-
12.00
48.50
6/1/2021
Woodbury
3.25
3.50
23.00
90.00
8.00
-
-
1/1/2022
Chaska
2.83
18.54
50.32
241.80
-
Chanhassen
5.00
14.00
40.00
290.00
-
2/1/2020
Falcon Heights
2.25
3.50
22.00
200.00
2.00
10/1/2018
Golden Valley
6.00
6.00
30.00
258.00
-
-
-
4/1/2018
Little Canada
2.75
5.25
40.00
230.00
15.50
2.00
3.00
7/1/2010
Maplewood
3.00
4.75
30.00
180.00
4.00
4.00
4.00
11/1/2018
Mounds View
2.26
14.84
40.26
193.44
-
-
-
1/1/2022
Shakopee
1.70
11.13
30.19
145.08
1/1/2017
Shoreview
3.75
5.00
36.00
340.00
1/1/2021
South Saint Paul
2.83
18.54
50.32
241.80
4/1/2018
Spring Lake Park
0.80
1.20
8.50
50.00
4/1/2015
Vadnais Heights
4.00
6.00
26.00
120.00
1/1/2021
White Bear Lake
0.85
5.56
15.10
72.54
5/1/2018
Basic Statistics
Mean 3.18 8.14 29.27 145.02 1.13 0.87 2.31 5/14/2019
Median 2.87 6.00 30.00 154.25 - - - 7/1/2019
Range (Min.) - - - - - - - 7/1/2010
Ranqe (Max.) 7.00 18.54 63.00 340.00 15.50 12.00 48.50 6/1/2023
Apple Valley (1)
2.00%
2.00%
2.00%
2.00%
Chaska
5.00%
5.00%
5.00%
5.00%
Coon Rapids (2)
4.00%
4.00%
4.00%
4.00% -
-
-
4/1/2018
Mounds View
4.00%
4.00%
4.00%
4.00% 4.00%
4.00%
4.00%
1/1/2022
New Brighton
Calculated
Per kWH
3/1/2016
South Saint Paul
5.00%
5.00%
5.00%
5.00% -
-
-
4/1/2018
Shakopee
3.00%
3.00%
3.00%
3.00% 3.00%
3.00%
3.00%
1/1/2017
White Bear Lake
1.50%
1.50%
1.50%
1.50% 1.50%
1.50%
1.50%
5/1/2018
Notes
(1) For municipalities with franchise fees set as a percentages the amount listed in the table assumes an
average bill for the respective user class.
(2) The maximum fee that will be applied to any account will not exceed $25.00 per month.
(3) The franchise fee excludes rate schedules for highway lighting, municipal street lighting, municipal
water pumping, municipal fire sirens, and municipal sewage disposal service. For all consumers, the
four percent franchise fee is applicable to the first $950,000 of calendar year gross operating
revenues. The franchise fee is reduced to one half percent (0.5%) for the remaining amount of
annual gross operating revenues exceeding $950,000.
08/21/2023 E H L E RS
IYY® Il -Ll- I NANCE ADVISORS
Gas Franchise Fee Comparative Analysis Attachment B
City of Arden Hills, Minnesota
Residential
C&I-A
C&I-B
C&I-C
SVDF-A
SVDF-B
LVDF
Apple Valley
-
-
-
-
-
-
-
Bloomington
4.60
11.90
11.90
63.00
63.00
63.00
182.00
1/1/2023
Brooklyn Park
7.00
6.50
20.00
70.00
160.00
160.00
160.00
3/1/2016
Burnsville
4.00
12.00
40.00
180.00
180.00
180.00
180.00
9/1/2020
Coon Rapids
3.62
3.81
10.72
57.96
100.00
124.91
433.16
1/1/1992
Eagan
1.85
10.00
10.00
10.00
10.00
20.00
20.00
6/1/2023
Eden Prairie
4.00
5.00
12.50
55.00
55.00
55.00
55.00
4/1/2018
Edina
2.90
4.90
13.68
58.32
58.32
58.32
58.32
5/1/2019
Minnetonka
4.50
4.50
13.50
45.00
45.00
45.00
45.00
1/1/2019
Plymouth
2.52
3.79
12.65
50.61
50.61
50.61
50.61
4/1/2023
St. Louis Park
6.75
6.75
12.00
48.50
48.50
48.50
148.50
6/1/2022
Woodbury
1.75
10.00
10.00
100.00
90.00
90.00
55.00
1/1/2022
Chanhassen
5.00
5.00
9.00
20.00
90.00
90.00
90.00
2/1/2020
Chaska
2.70
2.85
8.60
39.50
140.00
315.00
715.00
8/1/2014
Falcon Heights
1.75
8.50
75.00
50.00
100.00
15.00
15.00
10/1/2018
Golden Valley
6.00
7.50
30.00
30.00
258.00
258.00
258.00
4/1/2018
Maplewood
3.00
12.00
100.00
75.00
110.00
2.50
2.50
11/1/2018
Mounds View
3.62
3.81
10.72
57.96
100.00
124.91
433.16
1/1/2022
North St. Paul
2.49
2.62
$0.005
Per Therm
3/1/2019
Shakopee
2.72
2.86
8.04
43.47
75.00
93.68
324.87
1/1/2017
Shoreview
2.25
13.00
-
115.00
-
-
-
1/1/2021
South Saint Paul
4.53
4.76
13.40
72.45
125.00
156.14
541.45
4/1/2018
Spring Lake Park
0.58
0.61
1.66
8.05
37.00
50.00
50.00
4/1/2015
Vadnais Heights
2.50
7.00
60.00
-
120.00
-
-
1/1/2021
Basic Statistics
Mean
3.23
5.99
20.14
52.08
83.98
83.36
159.07
6/2/2018
Median
2.90
5.00
11.95
50.31
82.50
56.66
56.66
3/1/2019
Range (Min.)
-
-
-
-
-
-
-
1/1/1992
Ranae (Max.)
7.00
13.00
100.00
180.00
258.00
315.00
715.00
6/1/2023
Coon Rapids
4.00%
4.00%
4.00%
4.00% 4.00%
4.00%
4.00%
1/1/1992
Mounds View
4.00%
4.00%
4.00%
4.00% 4.00%
4.00%
4.00%
1/1/2022
North St. Paul
2.75%
2.75%
$0.005 Per Therm
3/1/2019
Shakopee
3.00%
3.00%
3.00%
3.00% 3.00%
3.00%
3.00%
1/1/2017
South Saint Paul
5.00%
5.00%
5.00%
5.00% 5.00%
5.00%
5.00%
4/1/2018
Notes
(1) For municipalities with franchise fees set as a percentages the amount listed in the table assumes an
average bill for the respective user class.
08/21 /2023
EHLERS
IYY® ll - I- NANCE ADVISORS
Attachment B
PRESENTATION ITEM —4E
'It
,-ARZEN HILLS
105 1 DIU [I].7_1►1111A/
DATE: September 18, 2023
TO: Honorable Mayor and City Councilmembers
FROM: Dave Perrault, City Administrator
SUBJECT: Franchise Fee Discussion
Budgeted Amount: Actual Amount: Funding Source:
N/A N/A N/A
For Council Consideration
Council should consider providing direction on next steps relating to the Franchise Fee Discussion.
Background
At the August worksession, the City Council received a presentation from Ehlers on possible use of
Franchise Fees on electric and gas bills in the City. The memos from that meeting are attached
under Attachment A for background. The idea of Franchise Fees was raised as part of the need to
fund ongoing capital projects in the City. At the July worksession, the City Council discussed the
Capital Improvement Program (CIP) and noted shortfalls in the Public Safety and Equipment fund.
One solution to this problem was to consider raising approximately $400,000 in Franchise Fees and
distributing between the PIR Fund, Public Safety Fund, and Equipment Fund. This would create
stability in the Public Safety and Equipment Funds and provide an ongoing revenue stream for the
PIR Fund. The outlook of each fund can be found below with no changes, as well as, if we were to
introduce Franchise Fees to the different funds. Note: for the PIR Fund this does not include the
Lake Jo Blvd Trail or the Old Highway 10 Trail, and for Public Safety it does include the proposed
fire station starting in 2026.
In order to raise $400,000 in Franchise Fees, Xcel projects it would require a residential monthly
fee of $2.00 on electric and $2.25 on gas, for a total of $51 annually between the two (Attachment
B outlines the proposed rates, other associated rates, and generated revenue). Should the Council
decide not to charge Franchise Fees and pay for these expenditures with a tax levy increase, a
comparable levy increase of $400,000 would equate to an annual increase between $55 and $60 on
a median priced home ($469,000). The question was also raised at the worksession if either a fee
on electric or gas would be more equitable. Xcel did look at this question and did not have a
Page 1 of 4
perspective on what would be more equitable; however, there are about 400 more properties with
electric than gas (i.e. it is assumed everyone has electric but not everyone has gas).
PIR Fund — No Changes
w
$2.5
c
$2.0
$1.5
$1.0
$0.0 ■ ,
S05
2024 2025 2026 2027.2028 2029 2030 2031 2032 2033
Equipment Fund — No Changes
$800.0
$600.0
$400.0
$200.0
$0.0
_
, ■
-$200.0
-540a.0
2024 2025
2025
2027
2M 2029
Public Safety Capital Fund — No Changes
$0.4
c $0.2
$0.
-$02
-$O.4.A
.
1
-$0,8
-$1.0
-31.2
-$LA
S16
-$1.8
2024 2025 2026
2027
2029
2029 20M 2031
2032 2033
Page 2 of 4
PIR Fund — Suggested Changes with Franchise Fees
s3.a
C 52,5
S2�a
$15
Si 0
$os
SD.Q
2024 2025 2026 2027 2029 2029 2030 2031 2032. 2033
Equipment Fund — Suggested Changes with Franchise Fees
Sraaa. a
S�aa. a
�4aa, a
�Zaa, a
50.0 ■
2024 2025 2026 2027 2028 2029
Public Safety Capital Fund — Suggested Changes with Franchise Fees
w
51.0
Q
$0.8
SOL
SOA
S0J
S0.0
2024 2025 2026 2027 2028 2029 2M 2031 2032 2033
Should Council want to consider moving this forward, direction will be needed on if, and what type
of, public engagement will be needed. No public engagement needs to happen, it can be done by
ordinance and updated agreements with Xcel, but the last time Franchise Fees were considered by
the Council they were voted down largely due to public opposition. Regarding timing, if Council
decides to move forward with a Franchise Fee, it does not need to do that by the end of 2023, it can
be done any time, but Staff would recommend having it in -place no later than end of 2024. Should
Council decide to increase the tax levy, it would need to be done in -conjunction with the
preliminary levy at the end of September, or it would need to wait until next year. Staff believes
either option would be acceptable, but would not recommend waiting beyond 2024 to shore up the
Page 3 of 4
capital funding. It should be noted that Xcel would request that we waive permit fees on their
ROW permits when pulled for projects as part of a franchise fee agreement. Those fees in 2021 and
2022 were $2,170 and $3,040, respectively.
Budget Impact
Budget impacts will depend on how Council wants to move forward.
Attachment
Attachment A: August Worksession Memos — Franchise Fees
Attachment B: Information from Xcel Energy
Attachment C: Combined Comparison of Other Franchise Fees
Page 4 of 4
Capital Funding Update - Recap
Attachment C
The City is exploring other financing options to fund future capital project needs. The financing options
under consideration are 1) a property tax levy increase and 2) adoption of a gas and/or electric franchise
fee that is administered by Xcel Energy.
What is a Franchise Agreement/Fee?
The franchise agreement specifies the period of service and a franchise fee is paid to the Arden Hills in
exchange for the franchise rights for use of the public right of ways.
These franchise fees are not related to the actual gas or electric usage/consumption. Additionally, these
franchise fees are not required for Xcel Energy to provide service to residents.
What is the impact of these financing options to a residential property owner - A) electric
only, B) gas & electric, C) property tax levy increase, or D) a combination of a franchise fee
and property tax levy increase?
The chart below shows 2 options for franchise fee and another option for a property tax levy increase.
For example, in order to generate $455,000 of revenue for the City, a $469,000 median residential
homeowner would see an increase of:
• $3.86 per month on their utility bill under an electric -only franchise fee scenario -or-
* $5 per month on their utility bill under both a gas & electric franchise fee scenario -or-
* $8.78 per month on their property tax bill under a bonding scenario, where property taxes are
levied to pay back the bond
Monthly Impact on Homeowners
Franchise Fee and/or Property Tax Increase
Home
Cost per Home
Market
Franchise Fee
C - Property
Tax
Value
A - Electric Only B - Gas & Electric
Increase'
$190, 300
$ 3.86 $ 5.00
$
3.19
$ 285, 500
$ 3.86 $ 5.00
$
5.13
$ 469, 000
$ 3.86 $ 5.00
$
8.78
$ 528, 700
$ 3.86 $ 5.00
$
10.03
$ 608, 000
$ 3.86 $ 5.00
$
11.88
$ 687, 300
$ 3.86 $ 5.00
$
13.74
Each monthly scenario would generate $455,000 annually
1: In a bonding scenario, the City would generate City revenues to pay back the bond. The payback
would include both principal and interest amounts. This bonding scenario assumes a $3.6M bond issued,
at a 3% interest rate, paid back over 10 years, with fixed annual payments of $455,000. Total cost to the
City is $4,172,034, which includes $572,034 of interest costs.
Other Minnesota Metro Cities that currently charge Franchise Fees
Most metro cities charge both a gas and electric franchise fee. The average residential gas and electric
monthly rate is $7.10 and Arden Hills' proposed rate of $3.86 electric -only or $5.00 gas & electric would
fall below the average.
Items to Consider
31% of the City's property values are tax-exempt. Under a franchise fee proposal, the fees would be
shared across all property owners and would include tax-exempt properties.
Under a property tax levy increase, there would be more volatility and an uneven share of taxes paid
across property owners. Tax-exempt properties are not impacted by a property tax levy increase.
Franchise Fees Page 1
Attachment D
COMPARTATIVE ANALYSIS - P
For comparative purposes, the below scenarios provide an estimate of what it would cost a property owner if 1) a
franchise fee were imposed or 2) if a property tax levy increase were imposed, in order to generate $455,000 of revenue
for the City.
RESIDENTIAL HOMEOWNERS
A $469,000 median residential homeowner would see an increase of:
• $3.86 per month on their utility bill under an electric -only franchise fee scenario -or-
• $5 per month on their utility bill under both a gas & electric franchise fee scenario -or-
• $8.78 per month on their property tax bill under a bonding scenario, where property taxes are levied to pay back
the bond
Monthly Impact on Homeowners
Franchise Fee and/or Property Tax Increase
Home
Cost per Home
Market
Franchise Fee
C- Property Tax
Value
A - Electric Only B - Gas & Electric
Increaser
# of Homes
% of Homes
$
190,300
$
3.86 $ 5.00
$ 3.19
135
5.1%
$
285,500
$
3.86 $ 5.00
$ 5.13
336
12.7%
$
469,000
$
3.86 $ 5.00
$ 8.78
983
37.1%
$
528,700
$
3.86 $ 5.00
$ 10.03
343
12.9 %
$
608,000
$
3.86 $ 5.00
$ 11.88
313
11.8%
$
750,300
$
3.86 $ 5.00
$ 15.21
344
13.0 %
$
897,900
$
3.86 $ 5.00
$ 18.67
86
3.2%
$
1,002,100
$
3.86 $ 5.00
$ 21.10
24
0.9%
$
2,175,400
$
3.86 $ 5.00
$ 48.55
79
3.0%
$
3,358,500
$
3.86 $ 5.00
$ 76.23
6
0.2%
Each monthly scenario would generate $455,000 annually
2,649
100.0%
1: In a bonding scenario, the City would generate City revenues to pay back the bond. The payback would include both
principal and interest amounts. This bonding scenario assumes a $3.6M bond issued, at a 3% interest rate, paid back
over 10 years, with fixed annual payments of $455,000. Total cost to the City is $4,172,034, which includes $572,034 of
interest costs.
MANUFACTURED HOMEOWNERS
A $37,200 average manufactured homeowner would see an increase of:
• $3.86 per month on their utility bill under an electric -only franchise fee scenario -or-
• $5 per month on their utility bill under both a gas & electric franchise fee scenario -or-
• $1.52 per month on their property tax bill under a bonding scenario, where property taxes are levied to pay back
the bond
COMPARTATIVE ANALYSIS - PROPERTY TYPE
Monthly Impact on Manufactured Homeowners (MH)
Franchise Fee and/or Property Tax Increase
Home
Cost per Home
Market
Franchise Fee C - Property Tax
Value
A - Electric Only B - Gas & Electric Increase'
# of
Homes
Total
Cost
$ 5,300 $3.86 $5.00 $1.16
57 $
66.12
$
13,100
$3.86 $5.00 $1.25
54
$
67.50
$
27,000
$3.86 $5.00 $1.40
54
$
75.60
$
37,200
$3.86 $5.00 $1.52
54
$
82.08
$
55,200
$3.86 $5.00 $1.72
54
$
92.88
$
172,800
$3.86 $5.00 $3.93
1
$
3.93
Each monthly scenario would generate $455,000 annually
1: Includes an equal share of MH Park Land Property Taxes
274
$
388.11
APARTMENT RENTER
A $20,000,000 apartment complex would see an increase of:
• $465.55 per month on their property tax bill under a bonding scenario, where property taxes are levied to pay back
the bond. The property tax levy would impact each rental unit differently, based upon the number of units within
an apartment building.
The franchise fee would be dependent upon how the property is metered. For example, if an apartment building has a
single meter, it would be treated as a commercial property and would be assessed the commercial rate. If each unit has a
separate meter, then each resident would be assessed the residential rate.
Monthly Impact on Apartment Renters
Franchise Fee and/or Property Tax Increase
Cost per Complex
Cost per Unit
Franchise Fee C- Property Tax
C- Property Tax
Est. Per Unit
Est. # of
Market Value
A - Electric Only B - Gas & Electric Increase
Increase
Units
Property Name
$ 537,700
$ 10.24
$
2.56
4
Meatballs Properties (4-Plex)
$ 5,687,300
Single Meter= Commercial $ 130.71
$
3.53
37
Edgewater Estates
$ 8,820,700
Rate
$ 204.02
$
3.40
60
Cottage Villas of Arden Hills
$ 20,000,000
Separate Meter= Residential $ 465.55
$
3.19
146
New Perspective Senior Living
$ 24,456,800
Rate $ 569.82
$
5.87
97
Round Lake Senior Living
$ 39,309,300
$ 917.28
$
2.24
410
Presbyterian Homes AH Inc
Each monthly scenario would generate $455,000annually
$
3.47
Average Cost Per Unit
COMPARTATIVE ANALYSIS - PROPERTY TYPE
COMMERCIAL PROPERTY OWNERS
In order to generate $455,000 of revenue for the City, a $9,666,600 commercial property owner would see an increase
of:
• $240.37 per month on their property tax bill under a bonding scenario, where property taxes are levied to pay back
the bond
The franchise fee would be dependent upon the Public Utility Commissions' classification of the commercial property,
which is based on utility usage.
Monthly Impact on Commercial Properties
Franchise Fee and/or Property Tax Increase
Cost per Property
Market
Franchise Fee C - Property Tax
Value
A - Electric Only B - Gas & Electric Increase
Property Name
$ 345,000
$ 7.68
Arden Ridge Office Park
$ 1,869,000
$ 45.72
Chick-fil-A
$ 3,698,200
Based upon the Public Utility
$ 91.38
Scherer Bros. Lumberyard, Sales &Design Center
Commissions' (PUC) customer
$ 9,666,600
classification (utility usage) $ 240.37
Office Building 3+Stories (Health Partners, DaVita, etc.)
$ 21,500,000
$ 535.77
Land O' Lakes
$ 50,717,500
$ 1,265.12
Boston Scientific
Each monthly scenario would generate $455,000 annually
,-A1�EN HILLS
MEMORANDUM
DATE: May 13, 2024
TO: Honorable Mayor and City Councilmembers
Dave Perrault, City Administrator
FROM: Nancy Jacobson, PTRC member
Liz Johnson, PTRC member
SUBJECT: Arden Hills Rain Gardens
Budgeted Amount: Actual Amount:
N/A N/A
Council Should Consider
AGENDA ITEM — 3C
Funding Source:
N/A
Council should consider the presentation from PTRC members, Nancy Jacobson and Liz
Johnson, related to Rain Gardens in Arden Hills.
Back2round/Discussion
Attachment A is a memo provided by the PTRC members which outlines the intent of this
discussion and process of the Rain Garden project. Attachment B is their initial rain garden
evaluation focused within the Glenhill Neighborhood near Johnna Marsh.
Budget Impact
Attachments
Attachment A — PTRC Rain Garden memo
Attachment B — Rain Garden Evaluation
Page 1 of 1
Attachment A
May 13, 2024 City Council Work Session Rain Garden presentation
By Liz Johnson and Nancy Jacobson
Why rain gardens are important to Arden Hills?
Liz and I are here to share with the City Council why the city's rain gardens are
important. We believe the city was under the impression that homeowners would
maintain the rain gardens. That has proved to be unsustainable for a variety of reasons.
Some of these reasons include that there are varying levels of gardening skills, physical
limitations, and sometimes there is a change of home ownership.
It is the City's responsibility to manage storm water runoff in an effort to meet water
quality goals set by the Rice Creek Watershed. Rain gardens capture some of the storm
water which can slow down the volume of runoff during a rain event and they also filter
out toxins and pollutants present in storm water runoff. Both of these actions reduce
the storm water burden the city has to manage and contributes to water quality as the
water makes its way into our creeks and lakes. As a result, Arden Hills has installed many
rain gardens throughout the years.
Arden Hills needs to meet its water quality goals for the Minnesota Pollution Control
Agency (MPCA) via the Municipal Separate Storm Sewer System (MS4) Permit. There
could be a penalty if the city is found non -compliant during any audit process. David
Swearingen can provide more technical information.
Why has the PTRC become involved in this issue?
Under the 2024 PTRC Strategic Plan we identified a need to focus on land management,
habitat restoration and beautification within the city. Within that category one goal was
to create and maintain rain gardens throughout the community. Liz and I initially had
concerns about the rain gardens within our neighborhood. Many of our rain gardens
have not been maintained and have substantially changed in function and appearance
since their installation several years ago. We felt it was important to clarify who is
responsible for maintenance of the rain gardens and to come up with a sustainable plan
to move forward.
Emily Rousseau arranged for us to meet with David Swearingen to understand the city-
wide rain garden situation. After meeting with David, we understand that the rain
garden project is a much bigger project than just the maintenance of the few rain
gardens in our neighborhood. David Swearingen would like to have a city-wide rain
garden inventory completed for all the rain gardens. He has documented approximately
100 rain gardens in the city but suspects there are nearly 200 rain gardens all together.
It is our goal to develop a process to inventory and help clarify the maintenance of rain
gardens. We are in the beginning stages of this process.
Process
1. Inventory the location of all the rain gardens using the address of nearest house
or building.
2. Create a unique ID number for all the rain gardens in the city
3. Using that unique ID# create a file for each rain gardens
a. Inspection notes
i. Determine evaluation criteria which could be poor -good -excellent.
ii. Evaluate the rain gardens condition based on the above evaluation
criteria.
b. Existing planting design
c. Maintenance log sheets
d. Identify rain gardens owner or responsible party
e. Photos
4. Create a plan for how all of the rain gardens are to be maintained going forward.
5. If maintenance and repair is required for an individual rain garden, a list of
materials, quantities, and costs for the recommended work needs to be
determined.
To the City Council
0 We are here to ask for City Council support for the continuation of the rain
garden project.
Attachment B
These are our initial notes and photos from our first rain garden neighborhood
tour.
Liz Johnson and Nancy Jacobson
Findings from 4/7/24 Raingarden visual examination
Corner of Ridgewood and Glenhill
- The edging is coming out
- Hard to identify plants at this time of year but we saw some iris coming
6
r•
w
Ridgewood Avenue
Some plants coming up along with some volunteer grasses
No volunteer woody plants present
Ridgewood Rd across from Johanna Marsh Park
- This one needs a lot of help
- The Wild Geranium is taking over the whole thing
- There are several volunteer trees along the road that should not be there
- We can not identify anything except for the phlox and Compact American
Cranberry Bush
u
ry
1
Y y x
e M t
at -
x
iM
1 y �
Asbury Avenue along Northwestern fence
Northerly garden closer to the lake
- The purple cornflower and black eyed susans need sun and they do not get
any in this location and we think they are gone
- The compact American Cranberry Bush breaks under the weight of the snow
- not very practical for MN - There is a volunteer dogwood in this location
which may be a good replacement over time for the Cranberry Bush
- The Burdock weed is taking over and needs to be managed here
-
L: � n•
ry
2'
3h.r e � Y•I yr
Y �•
•
Southerly garden just to the west of the one described above
- This garden is filling up with sediment - the only thing we could identify was
the cranberry bushes at this point
�67
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AGENDA ITEM — 3D
EN HILLS
MEMORANDUM
DATE: May 13, 2024
TO: Honorable Mayor and City Councilmembers
FROM: Dave Perrault, City Administrator
SUBJECT: Strategic Planning Discussion Follow-up
Budgeted Amount: Actual Amount: Funding Source:
N/A N/A N/A
Council Should Consider
Council should provide further guidance on how to move its strategic planning discussion
forward.
Background
At the last worksession, the City Council discussed its strategic goals, Council directed Staff to
compile those goals based on categories for future discussion. The attached document is based
on the prior discussion. Council should direct Staff on how it wants to move further discussion
along on this topic.
Budget Impact
N/A
Attachment
Attachment A: Strategic Goals Based on Category
Attachment B: Council's Strategic Goals
Page 1 of 1
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Attachment B
Councilmember Name
Description of Goal
Priority
Brenda Holden
Completion of I&1
1
Brenda Holden
Neighborhood Support (monitor conditions, rental, preservation of housing stock)
2
Brenda Holden
Public Safety (proactive crime prevention, at riskyouth programs, traffic saftey
signals, police outreach)
3
Brenda Holden
EnvironemntaL Stewards
4
David Grant
TCAAP Agreement amongst all parties (including council agreement on civic zoning)
and get TCAAP started
1
Two new trails in AH (funding with some outside resources to enable
David Grant
completion)
2
Organized trash collection as a way to reduce air and noise pollution,
David Grant
maintain roads and hopefully lower costs.
3
David Grant
Implement a new Fire Station (includes funding)
4
Growth through RCC - Promote community —aligns with vision statement- strong
Emily Rousseau
residential neighborhoods and CV Strong neighborhoods and businesses- Encourage
business success and diversity -aligns with vision statement- vital business
community and aligns with CV Strong neighborhoods and businesses
1
Preserve and Protect our Natural resources— aligns with Vision - desirable city in
Emily Rousseau
which to live, work and play, unique environmental setting & CV- Environmental
awareness and stewardship - Land management program — to consider focusing on
canopy, raingardens, invasive species management and pollinator promotion
2
Public Safety- aligns with vision statement- a desirable city in which to live, work
and play& aligns with CV- Efficient and effective police and fire protection - Build key
Emily Rousseau
trails that increase public safety (Old HWY 10 and LJB)- Adequate facility for FD-
Adequate Human Resources available for emergency services (RCSO contract,
appropriate staffing for FD)
3
Develop city codes and policies relevant to modern technology, use current
information and values of current residents. — aligns with vision of strong residential
neighborhoods, vital business community and a desirable city in which to live, work
Emily Rousseau
and play & multiple core values - Update our city codes through work identified by
consultant in 2024- Implement a Pollinator Protector Policy as recommended in'22
by the PTRC- Consider review of landscaping ordinance— is this effective for
encouraging native plants, would a Do Not Exceed Turf Percentages clause be
valuable?
4
Emily Rousseau
Community development and integration of old and new -Incorporate standards for
RCC into existing city's standards
5
Tena Monson
Develop and construction TCAAP
1
Tena Monson
Align forward looking efforts to be morefamiLy friendly(parks and rec, programs,
spend, trails, etc) ensure foundation of what we do is supporting families
2
Tena Monson
Lay the foundation of sustainability for all of our efforts. Integrate the clean energy
and sustainability into all of our processes
3
Tena Monson
Maintaining and enhancing our natural resources in the city (canopy etc). This could
be folded into #3 if we do it right.
4
Tena Monson
Create a meaningful vision forthedevelopment ofour commercialzones
5
Improve the residential landscape of Arden Hills by removing provisions in the
Tom Fabel
Comprehensive Plan and the Zoning Code which prohibit or unduly restrict
population density.
1
Improve the residential landscape of Arden Hills by promoting an increased
Tom Fabel
availability of affordable housing and requiring a minimal percentage of
affordable housing in all residential development proposals.
2
Increase the frequency of communications with elected officials of
Tom Fabel
surrounding communities, including explorations of shared service
opportunities.
3
Modify any existing city policy, comprehensive plan requirement, or
Tom Fabel
zoning provision which stands in the way of or unduly impedes a
successful development of Rice Creek Commons.
q
Brenda Holden
Resident communication
5
AGENDA ITEM — 3E
EN HILLS
MEMORANDUM
DATE: May 13, 2024
TO: Honorable Mayor and City Councilmembers
FROM: Dave Perrault, City Administrator
SUBJECT: Twin Cities Gateway Funding Discussion
Budgeted Amount: Actual Amount: Funding Source:
N/A N/A N/A
Council Should Consider
Council should provide further guidance on how to spend 2024 Twin Cities Gateway Grant
monies.
Background
For 2024, the City Council has received $18,390 from the Twin Cities Gateway (TCG) Visitors
Bureau; this money comes from a portion of the lodging tax that the City charges its hotels and
remits to the visitors bureau. Last year, the City chose to spend the money on the first annual
Ribfest and activities put on by Bethel University, both entities received half of the City's overall
grant. Staff reached out to the organizers of Ribfest and they are planning to hold the event
again, likely in the fall. Members of the Council recently suggested ideas on how to spend this
money, ideas such as Ribfest, Bethel University and Mounds View High School were put
forward. The City Council should identify entities or activities it wants to potentially utilize this
money for and Staff can begin to work with the organizations to see if there is a viable path
forward. Below are the stipulations put forward by TCG regarding how the money can be spent;
in short, the money is intended to bring outside visitors into the City.
Page 1 of 2
The City agrees to expend the grant funding in compliance with MN Statute 469.10 which states
that "gross proceeds from any tax imposed shall be used for the purpose of marketing and
promoting the City as a tourist or convention center" and
Whereas the Bureau has specified that grant funds must be used for advertising, marketing, and
promotional efforts to increase participation, attendance, or visitation to an event, activity, or
facility located within the City, and / or to add new activities to enhance existing events, and
Whereas the Bureau specifies that advertising, marketing, and promotional efforts for which said
grant funding is used must extend beyond the borders, or boundaries of the City.
Budget Impact
N/A
Attachment
N/A
Page 2 of 2
'It
,-ARZEN HILLS
MEMORANDUM
DATE: May 13, 2024
TO: Honorable Mayor and City Councilmembers
FROM: Dave Perrault, City Administrator
SUBJECT: Rice Creek Commons/TCAAP Discussion
Budgeted Amount:
N/A
For Council Consideration
Actual Amount:
N/A
AGENDA ITEM — 3F
Funding Source:
N/A
Council will have the opportunity to comment on any TCAAP related items they so choose.
Background
N/A
Budget Impact
N/A
Attachment
N/A
Page 1 of 1
EN HILLS
MEMORANDUM
DATE: May 13, 2024
TO: Honorable Mayor and City Councilmembers
FROM: Dave Perrault, City Administrator
SUBJECT: Agenda Planning
Budgeted Amount: Actual Amount:
N/A N/A
Council Should Consider
Council should discuss its next worksession agenda.
Background
AGENDA ITEM — 3G
Funding Source:
N/A
Per Council's adopted policy on agenda setting, please find proposed agendas below for
upcoming meetings.
May 281h Worksession
• TH Highway 10 and Highway 96 Landscaping (time sensitive)
• Encroachment Discussion Update (not time sensitive)
• Council Code of Conduct (time sensitive)
• RCC/TCAAP Discussion (not time sensitive)
• Agenda Planning (time sensitive)
June 1 oth Worksession
• Old Highway 10 Trail Design (not time sensitive)
• Tobacco Moratorium (time sensitive)
• RCC/TCAAP Discussion (not time sensitive)
• Agenda Planning (time sensitive)
Attached is the list of topics that have yet to be discussed by Council. Council may want to
discuss if any items need to be added to this list for future discussion or assign a future meeting
for some of these items. This would need to be done by a majority consensus of Council.
Page 1 of 2
Budget Impact
►.
Attachment
Attachment A: Council Priorities
Attachment B: Agenda Setting Policy
Page 2 of 2
Attachment A
1
Topic,r Consideration
Committee/Commission Goal Setting
Likely Responsible Depart.
Admin
TBD
1
Short-term Rental Ordinance
CD/Admin
TBD
z
Rental Licensing Program
CD/Admin
TBD
3
Volunteer Recognition (to Personnel first)
Admin
TBD
3
hrfrll Development
CD
TBD
3
Speed Limit Old Snelling
PW
TBD
3
Trail Prioritization (Lake Jo versus Snelling Ave N)
PW/Fin
TBD
4
Council Salaries
Admin
TBD
4
Climate Action Plan
Admin
TBD
4
Committee/Commission Membership
Admin
TBD
4
Building Materials Update/Discussion
CD
TBD
4
EV Fleet Analysis
PW
TBD
5
Energy audit
Admin
TBD
5
Porta potties
PW
TBD
6
FDA Membership Discussion
CD/Admin
Future EDA meeting
7
Community Survey
Admin
TBD
7
Keeping of Ducks
CD/Admin
ITBD
Added items:
Proclamation Policy
Garbage Collection (MV Presentation?)
Committee/Commission Liaison Role Policy
Code of Conduct
Attachment B
lt
,-ADEN HILLS
CITY OF ARDEN HILLS
Agenda Setting Policy
The purpose of this policy is to establish a method for agenda setting that allows for Council to
review and have control over its agendas and decide as a Council how it wants items for
consideration to be brought forward.
For regular worksession agendas:
• Prior to concluding each regularly scheduled worksession, the City Council shall review
its next regularly scheduled worksession agenda and direct Staff on any changes.
• Should an individual Councilmember want to raise an item for discussion at the next
meeting or in the future, they would do so during this review period. The item would
need at least one other Councilmember to agree to having the item considered for future
discussion, and then Council, by majority, would direct to have it placed on a future
agenda or not.
• Staff will have flexibility to add or remove items to the worksession as needed to
maintain operational efficacy.
For regular City Council meeting agendas:
• Agendas will be largely Staff driven based on approvals needed for normal operations.
• Items coming from the City Council shall first be discussed at a worksession and can
direct Staff at said worksession to bring items forward for formal approval if needed.
• In rare instances, if a Councilmember brings forward an item that needs approval prior to
going to a worksession, they may request the City Administrator add the item to the
agenda. The City Administrator shall have the discretion to determine if the issue should
be added or not, but Councilmembers will make every effort to having the item first
discussed at a worksession.
Special meetings and emergency meetings:
• Special meetings and emergency meetings may still be called at the discretion of the
Mayor or any two Councilmembers, and the members calling the meeting shall set the
agenda.