Loading...
HomeMy WebLinkAbout09-23-24-WS HILLS Approved: October 14, 2024 CITY OF ARDEN HILLS, MINNESOTA CITY COUNCIL WORK SESSION SEPTEMBER 23, 2024 5:30 P.M. - ARDEN HILLS CITY COUNCIL CHAMBERS CALL TO ORDER/ROLL CALL Pursuant to due call and notice thereof, Mayor David Grant called to order the City Council Work Session at 5:30p.m. Present: Mayor David Grant, Councilmembers Tom Fabel, Brenda Holden, Tena Monson and Emily Rousseau Absent: None Also present: Interim City Administrator Jessica Jagoe; Finance Director Joua Yang; Public Works Director/City Engineer David Swearingen; and Assistant to the City Administrator/City Clerk Julie Hanson 1. PUBLIC INQUIRIES/INFORMATIONAL None. 2. RESPONSE TO PUBLIC INQUIRIES None. 3. AGENDA ITEMS A. 2025 General Obligation CIP Bond Schedule and Franchise Fees Discussion Finance Director Yang began the conversation regarding the Preliminary 2025 General Obligation Capital Improvement Plan(CIP) Bond Schedule and the Electric Franchise Fee rate structure scenarios. Finance Director Yang provided background of previous discussions. A capital funding update open house was held in April. At that meeting, Staff shared the City's anticipated funding gap which was $455,000 at that time. Today it is $465,000. A survey was released to help provide additional information on the topic. The results were shared with Council with over 54% of respondents supporting a franchise fee option, over a property tax levy or a combination of both, and dedicating the fee for a specific purpose. Based on survey results and additional discussions, ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION— SEPTEMBER 23, 2024 2 Council was in favor of implementing electric franchise fees to offset debt service for the new fire station in 2025. Finance Director Yang said at the August 19th budget work session, Council directed Staff to work with the City's Financial Advisor, Ehlers, to determine the timing and structure of a bond issuance to occur in the spring of 2025. This would align with the anticipated development of the new fire station. She pointed to Attachment A in the agenda packet, which is the preliminary series 2025 General Obligation Capital Improvement Plan bond schedules. This includes one scenario at bank qualified rates and another with a 75 basis points for cushion. The scenarios assume the bonds would settle on May 15, 2025, with maturity dates of 10, 15 or 20 years. Finance Director Yang asked for direction on what term or debt service schedule Council would like to adopt. This decision will inform the targeted revenue structure. Finance Director Yang pointed to Attachment B in the agenda packet, which contains three Electric Franchise Fee rate options. Those scenarios assume a$375,000 revenue target. This is the amount in the 2025 Preliminary Budget. Residential properties will be assessed a$3.00 monthly fee and the amount varies slightly for other property types. Finance Director Yang said with the first debt payment expected in February of 2026, Staff recommends adoption of ordinances and rate structure no later than November 1 for implementation by February 1 of next year. Staff confirmed with the City Attorney that a public hearing for adoption of the ordinance is not required. The City can choose to hold a public hearing, if they so choose. Finance Director Yang introduced Mike Wilhelmi from Xcel Energy who stood for questions regarding implementation of rate structure or the program specifics. Mayor Grant said Council should discuss the bonding first. Councilmember Holden wanted to verify that the franchise fees have been in the newsletter twice, there was an open house, as well. So it has been advertised. Finance Director Yang confirmed. Mayor Grant wanted to clarify something from the packet. There were 73 residential survey responses. The 54% was a combination of electric only, gas and electric. Finance Director Yang confirmed. Mayor Grant said there was an additional 17%who chose a hybrid of both. He said at a subsequent council meeting it was discussed that the franchise fees would be used for the fire station, only. He asked Council's opinion on the various debt maturity levels. Mayor Grant asked how much of a financial commitment Arden Hills has in the new fire station. He thought there was a potential $3 million bonding from the feds. Councilmember Monson said there is no update, because their budget needs to be passed. She said we have to assume we won't get it. Then if we do get it, it'll be the cherry on top. Mayor Grant asked if the amount was still $18 million. ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION— SEPTEMBER 23, 2024 3 Councilmember Monson said no, it is assumed to be between $20-$25 million. She said in the event the amount is not sufficient when bids are received in spring of 2025, the ordinance would need to be adjusted to cover the correct amount. Finance Director Yang confirmed. Councilmember Monson thought we should know before May 15t'. That is the date this would start. We are hoping to start construction in the spring. She said it's not ideal to have to go back and change the ordinance, but the timing works, if that is needed. If it's much higher, there would be more discussions. Councilmember Holden thought that earlier Councilmember Monson had said that if the bid exceeds initial the amount we would look at downsizing the fire station. She asked if Councilmember Monson is saying we'll have discussions and the City will have to pay more. Councilmember Monson said no. If it came back too high, there would be a lot more discussion surrounding how much it should be cut back or if there is appetite to meet the amount. She thinks everything is on the table but she doesn't think any of the three cities have an appetite to go much above the estimates. Councilmember Holden said there is a big gap between $20 million and $25 million. She said the City paid cash for the land. She asked if the $20-$25 million includes everything or if that's just the construction of the building. Councilmember Monson said any planning costs have already been built into the budget. So that amount is just the capital expenditure to build the building. Councilmember Holden asked if the most the City should anticipate paying is the $25 million. Councilmember Monson said the numbers are direction from the Lake Johanna Fire Department to assume for our bonding. Councilmember Holden asked if it is $20 million or$25 million. Finance Director Yang said she can't say specifically the amount that Ehlers used, but it's in that range. Mayor Grant asked what is the date that shovels will go in the ground. Councilmember Monson said it will be in the spring. There isn't an exact date yet. Mayor Grant asked for confirmation that there is a$5 million swing. Councilmember Monson confirmed. Councilmember Fabel asked what the City's share of the fire station is. Councilmember Monson said it was approximately ' of the amount. Councilmember Fabel asked if any portion of the annual payments made will cover capital expenditures. ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION— SEPTEMBER 23, 2024 4 Councilmember Monson said no. Councilmember Holden said the portion each city paid was supposed to be adjusted as the population changes. She wondered if it will be a flat 25%. Councilmember Monson said previous discussion was regarding one bond or three bonds. North Oaks and Shoreview both prefer a single bond. That would provide them with some administrative cost savings. Arden Hills looked at that and the savings wasn't substantial. They have a three-year rolling average to decide what proportion of the share the City pays. There is concern that today it's 25%but in 5 to 10 years Arden Hills may owe a higher percentage,but the bond would reflect just the 25%. The discussion is whether or not the cities need to come up with a separate agreement that outlines if one of the cities' share swings X% above or below, would we have a payment plan to true up our portion. It's more complicated by going to three bonds. Councilmember Holden said the building is going to cost $25 million. It will be done. She wants to understand how the rolling average works. Why would our cost go up, when it was already built. Councilmember Monson said these are preliminary discussions. There are not agreements yet and negotiations are forthcoming. The argument for having three separate bonds so there are no issues with hitting the qualifying cap. We want to have a positive relationship with the fire board and with the partnering cities. Mayor Grant agrees with Councilmember Holden that the cost is $20-$25 million and we finance it, however it makes sense. We build it. It doesn't take that long to build. The proportional share to build the building is whatever the cost is that particular year. What if Shoreview puts up a bunch of apartments, or if North Oaks built up or if TCAAP moves forward?You have the financing in the year the building is built. He would not want to be subject to how the partnering cities want to run their bond. The longer you run it, the more expensive it will be. Councilmember Monson said that's why they want to go to one bond. A single bond outlines who has what share, there are no questions about timelines. A single bond is simpler, and it retains a positive relationship with our partners at the fire board. That is not to say that having three separate bonds will not retain those partnerships. Mayor Grant said if we finance the $4.5 million, we have the bonding and the building gets built; he doesn't understand why we're looking forward 10 years where our percentage will be more. Councilmember Rousseau asked if it is considered a fixed asset. She asked if it is typical for the repayment to be fluid and subject to change. Finance Director Yang said she hasn't typically seen that in the past. Councilmember Rousseau said she would like to see the bond paid off as soon as possible. She thought if TCAAP is developed, there could be up to 1,900 new homes. She wondered if the franchise fee will make a difference for Council to go to the 20-year bond. Mayor Grant said his preference would be l0years. ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION— SEPTEMBER 23, 2024 5 Councilmember Rousseau said that would be her general preference, too, however, the percentages that go into the interest rate. We've got 24% of our market value is non-profits. She is trying to play devil's advocate. If we did the 20-year and then in 10 years TCAAP gets developed, that would be additional homes and businesses that will pay towards the franchise fee. Councilmember Holden was comparing the difference in interest rates. She thinks we'll pay $765,000 for 10 years and almost $2 million for 20 years. She doesn't think TCAAP being developed should be a factor. Extending the bond for 20 years is just pouring money into interest. That million dollars could pay for a lot of City improvements. She asked when the current bond is done. Mayor Grant replied 2028. Councilmember Holden thought that money could be used to pay down this bond. Mayor Grant said that was in the Enterprise Fund. Councilmember Monson asked if the bond can be paid off early to avoid some interest. Finance Director Yang confirmed. Councilmember Holden said that is why it would be better to bond alone. Mayor Grant thought some bonds can be refinanced. He thought we've done it before when interest rates went down and the City was able to refinance and save$150,000 a year. He would like to know, from Ehlers, if that is possible. Finance Director Yang will ask them that and follow up with Council. Councilmember Monson asked if the franchise fee is only for electric or electric and gas. She asked if the decision for only charging franchise fees is because everyone has electric, but not everyone has gas. Finance Director Yang confirmed. Councilmember Monson asked what the rate would be if the target $542,000 a year. She stated it's $3.00 for$375,000. Finance Director Yang said the City has the option to choose. When she ran the numbers at $455,000 it came to $3.86. We have the flexibility to choose that rate. Councilmember Monson said basically the City can weight fees however we want it. Mike Wilhelmi confirmed. He said you can set it how you want at $0.25 increments. Councilmember Monson said we have control of weighting which customer classification pays what. Mike Wilhelmi confirmed. He said all of the options laid out are just options that you can deviate from, as the City wishes. Discussion ensued regarding how the decision was made to charge franchise fees for electric but not gas. ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION— SEPTEMBER 23, 2024 6 Councilmember Monson would like to see what the individual resident impact would be if the franchise fee covered the $542,000 annual debt service for a 10-year bond. The current calculation of$3.00 per resident is based on the $375,000. That is just under$200,000 less than we were hoping for. Mayor Grant said he understands Xcel would prefer an even dollar amount. Mike Wilhelmi said they prefer$0.25 increments. Mayor Grant thought rounding up to $4.00 is possible. That would equate to just over$455,000 annually. Councilmember Monson confirmed but we'd still fall short of the total. Mike Wilhelmi said if Council provided a number to target,he could put together some options. He said the $3.00 is what most communities do. Some go as high as $4.00. Some a little higher. Councilmember Monson wondered if Staff should work with Xcel on what each customer class would look like. Mayor Grant thought they have already done that. Finance Director Yang said she had used previous break outs for that. In order to get updated figures, Staff would have to work with Xcel. Mayor Grant thought it would be worth our while to have Mike Wilhelmi work with Staff to get those cost options. The intent is to use the franchise fees to pay for the fire station and spread those costs over the entire city, including the non-profits. Councilmember Monson agrees Staff should work with Xcel. She wondered what the advantage of scenario #2 that has a higher interest rate. Finance Director Yang said that's just a cushion., in case rates were to increase from where they are today. Councilmember Monson summarized the difference between the scenarios. She would like to see the residential fee held to $3.00. Councilmember Holden agrees. She said keeping it below $3.50 is significant for residential while asking residents to pay the equivalent of a single cup of coffee. Mayor Grant said when this was done with the BQ AAA rates, that was before the rates were dropped by the fed. He thought focusing on the top half of the sheet and not the bottom would be appropriate. Councilmember Fabel asked how much Xcel Energy charges to be the middleman on the collection of taxes. Finance Director Yang said there is no charge. ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION— SEPTEMBER 23, 2024 7 Councilmember Rousseau would like to see options at$3.00, $3.50 and $4.00. She would also like to try to keep the small commercial and industrial at the lower rate. She prefers to put it on the large commercial and industrial to carry more of the weight. Mayor Grant asked Mike Wilhelmi when Xcel sets a franchise fee, do they have to level set residential to commercial? Can you weigh one heavier than the other? Mike Wilhelmi said the Council has a lot of options available. He said a resident will use a lot less energy than a business. It makes sense that the commercial and industrial properties will take more. Councilmember Holden thinks a small business can utilize a significant amount of electricity and a larger business, a lot of them, are very energy efficient and may be using less. She wondered how it breaks down. Mike Wilhelmi said it's not broken down by the size of the business. There are categories based on usage. Councilmember Holden said small businesses may use a little more energy. She would like to see businesses with less than 10 employees have a lower rate. Even if they use more electricity, they don't have stockholders. They need to make payroll. Mike Wilhelmi said non-profits and schools also pay franchise fees. Councilmember Rousseau said that is why Council dedicated this funding source to the fire department because all of those entities also use the services of the fire department. Councilmember Holden said Presbyterian Homes has a lot of locations and are already paying the franchise fees elsewhere. This will be nothing new for them. Councilmember Monson said she is supportive of the proportion of share where residents pay the lowest, with small commercial and industrial at the next level and it grows based on usage. She thinks that structure will help support the small businesses by charging a smaller fee. Mike Wilhelmi shared a preliminary run of what amount each category would pay to reach the $455,000 amount discussed earlier. If the share was $3.50 for residential, $4.50 for C/I non- demand, $24 for demand and $325 for large C/I. The councilmembers thought that was reasonable. Mayor Grant asked how much debt service that would fund. One option is to make up the difference in a different way. Councilmember Rousseau thought Council could select the 15-year plan and try to pay it off sooner. Councilmember Monson agreed if we can save on interest. ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION— SEPTEMBER 23, 2024 8 Mayor Grant said as long as there were no pre-payoff penalties, that would be an option. That would give the City the flexibility with $458,000 coming in against the debt service of$395,000. We can pay it off quicker,but also if funds are needed for a fire truck or some design condition that needs to be added, there would be some money there. Councilmember Holden said there is a $500,000 difference if it's not paid off early. She thought increasing the C/I non-demand at$5.00. Councilmember Monson thought Council has a good feel for what the options are and she thought Xcel should be invited back. Councilmember Holden said the new interest rates may give some savings. Mayor Grant asked Mike Wilhelmi to return with some concrete numbers to target the $455,000. He said Council all agrees that a shorter debt service is preferred over a longer time period. Councilmember Fabel said he opposes this method of refinancing. He thinks if we were being funded properly through the taxpayers knowing they are paying for it, it would be part of the annual budget. It would make sense to spread that out over number of years rather than levying the entire thing in the first ten years. Councilmember Monson said she would like to have a public hearing. Mayor Grant said it needs to be in place by February. Finance Director Yang said it needs to be in place by November, for implementation in February. Xcel energy needs a 90-day grace period. Councilmember Monson said we would need to have the public hearing and vote in October. Mayor Grant said the 90-day period is an Xcel requirement. Mike Wilhelmi said it is required by Xcel and the PUC for processing. Bill notices go out to customers, so they aren't surprised when they see the fee. Interim City Administrator Jagoe said the item could be brought back on the October 14 Work Session for final direction. That would allow time for the 10-day posting, get it on the agenda for October 28. If there is direction for a public hearing that could be noticed as part of the entire agenda item. That would reach that targeted November 1 deadline. Councilmember Rousseau asked what happens if there is a public hearing and the public dissuades Council from moving forward with franchise fees. What would need to be done with the tax levies? Mayor Grant said we would be beyond the point to change it. Councilmember Monson said it's not in the preliminary levy. She said Council would have to set the prelim levy to a point that assumes franchise fees won't be used. This is not a palatable ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION— SEPTEMBER 23, 2024 9 choice since they worked so hard to bring that preliminary levy amount down. She thought maybe it's a false public hearing if the prelim levy doesn't include it. Councilmember Holden disagrees. She said there has been an open house, it's been discussed, it was in the newsletter. The public hearing is the opportunity to explain that we are going to charge them the equivalent of a cup of coffee a month vs. $100 annually. Mayor Grant said it would be the opportunity to explain to residents what has transpired since the open house, share the information from Xcel and outline the plans,moving forward. He wants residents to know Council wants to hear from them. He said it's not a yes or no public hearing. Councilmember Monson said she is comfortable tailoring the public hearing that way. Councilmember Rousseau said it makes more sense to have a presentation that outlines why Council made the decision. Mayor Grant said any decision on a course of action should be included in Arden Hills Notes. Public engagement is important. He pointed out that residents will be getting a top-notch fire station in our community. Councilmember Holden said it can lower their ISO for home insurance because the response time will be significantly better. Councilmember Monson said Xcel Energy has to find ways to decarbonize their natural gas business. One of the ways they are doing that is pilot projects. One of the proposed projects is a district geo-thermal system estimated to be around $10 million. Rice Creek Commons is a fantastic opportunity. You have to win an RFP to get that investment into the community. She would like the Council to approve writing a letter of support to the Public Utilities Commission so they can get approval of that plan. That would allow the City to apply for that $10 million investment. Mayor Grant asked if that would decarbonize the natural gas. He asked if TCAAP has natural gas. Councilmember Monson said they are still focusing on all electric. This geo-thermal system would heat and cool a commercial or industrial building and around 100 residents. There is a score card for what that pilot project is looking for. Rice Creek Commons would be a great fit for that program. Discussion ensued regarding the geo-thermal system, if it would be allowed and whether it's a good fit for TCAAP or not. Councilmember Rousseau summarized that there is no commitment from the City. She said customers are already being charged to implement the pilot program. She stated Xcel is asking for a letter of support from different entities that they can take to the PUC to show support for the project. Mike Wilhelmi confirmed. Councilmember Rousseau said she supports it. Even if it doesn't end up in Arden Hills she thinks it's a good pilot program. ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION— SEPTEMBER 23, 2024 10 Councilmember Monson said the JDA has had conversations with multiple stakeholders at the Army level. She cautions discussing what the Army will and will not allow. We don't have any indication from the decision makers that the answer is no. Mayor Grant said his understanding is you wouldn't have to use the geo-thermal on site. He said basically Xcel wants cities to show support indicating interest in having Xcel move forward with this type of project. It doesn't commit to any one city. Mike Wilhelmi confirmed. Councilmember Monson said she has a draft letter of support for Council to review. Mike Wilhelmi said there are couple deadlines. The sooner, the better. He doesn't anticipate there being a hearing on it until February. The current comment period closes this week. Councilmember Monson said if the Council determines we are in support, who will sign? Discussion ensued regarding the best way to route the letter for Council signatures and what meeting date it should be discussed. B. Adult Use Cannabis Moratorium Update Assistant to the City Administrator/City Clerk Hanson pointed to the memo containing basic preliminary items to consider. Staff is seeking direction regarding zoning for adult use cannabis. The Office of Cannabis Management (OCM) will start accepting applications for licenses January 1st. When they receive those applications, they reach out to the City to have the City sign off on the zoning. The application will work through all the steps with the OCM and then they direct applicants back to the City to complete a registration. The OCM licenses these businesses, the City will register them. Assistant to the City Administrator/City Clerk Hanson said any proposed zoning code amendments will have to go to the Planning Commission and then back to the City Council for final approval. Staff is seeking direction at this time about moving forward with zoning. Mayor Grant said that the mayors met and discussed this topic. Some cities have chosen to create an overlay zone showing where cannabis businesses could be. Other cities limit a certain distance from a school or daycare. He understands the City must allow at least one registration. The City can restrict the number of businesses but does not have to. Councilmember Holden asked if the definition of"school"means a K-12. Interim City Administrator Jagoe confirmed. Councilmember Rousseau asked if this is viewed as a stand-alone business or are they part of other businesses. Assistant to the City Administrator/City Clerk Hanson said Council can determine what type of business would be allowed and the location through zoning. Councilmember Rousseau asked who ensures the potency is accurate. ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION— SEPTEMBER 23, 2024 11 Assistant to the City Administrator/City Clerk Hanson said the City is in charge of compliance. There are still a lot of questions that need to be answered. It is constantly changing. Councilmember Rousseau asked if the optional low potency hemp edibles is already established. Assistant to the City Administrator/City Clerk Hanson confirmed. The Cub Discount Liquor is the one low potency license holder. That is established but can be amended by Council. Councilmember Rousseau asked if the City is required to allow"temporary cannabis event". Assistant to the City Administrator/City Clerk Hanson said that she did not believe it is a requirement. Councilmember Rousseau said OCM is still struggling to put this together. She would like to omit cannabis events and not address that until more questions are answered. Assistant to the City Administrator/City Clerk Hanson agreed it is a work in progress. Council can decide on first steps related to zoning and changes can be made later, after the program is better developed. Councilmember Fabel asked Mayor Grant if he heard of any other cities who are considering a municipal cannabis store. He thinks it's an intriguing way to restrict the advertising and marketing and to keep it under control, while at the same time bringing money into the city. Mayor Grant said two cities in his last Mayors' meeting that were entertaining the idea of a municipal cannabis store. He thinks they are backing away from that. They brought in financial analysts and learned what type of products and usage there is. Another mayor brought it to Council and they gave the cold shoulder and the city backed away. If it was a city run store, it could be small and you could control it. He is not aware of any restrictions on size. There are restrictions on hours of operation. Councilmember Fabel said if the sentiment is the city is not enthusiastic about open distribution of cannabis, that could be accommodated by limiting the size of the facility and marketing. Interim City Administrator Jagoe said the municipal store would be in addition to the one, population-based license that is required. Councilmember Holden asked if someone is a daycare provider in their home, is that a daycare, for the zoning consideration. Interim City Administrator Jagoe said when the City was looking at the low potency hemp she used all licensed daycare facilities in the buffer. She found out the state licensed providers and entered the buffer zone around those addresses. Councilmember Holden said that will cut into the 500 feet. There are a lot of home daycare providers. She thinks we have to go to a business district. Councilmember Monson said the biggest takeaway for her was the types of uses to be considered. Conversations usually surround the sale of cannabis. There are cultivation, ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION— SEPTEMBER 23, 2024 12 manufacturer,hemp manufacturer, wholesale,retail, transportation, delivery. Some are easier to answer. She thinks there could be a good argument for an overlay that could cover all of the uses. She thinks the City should allow one registration. There are a lot of questions and compliance is going to be an issue. She thinks it will take a couple of years to figure out. Mayor Grant agrees it should be limited to one. Councilmember Holden asked for clarification if it's one registration allowed to sell out of a store or one self-contained business. Mayor Grant said other states have implemented cannabis regulations. The rules change. He thinks the state is moving in a very organized fashion by establishing the OCM. There will be a lot of changes. Councilmember Monson asked if Councilmember Holden had a preference if the registration is for a primary or secondary use. Councilmember Holden said it would be difficult to determine who gets the registration if it is secondary use. She doesn't know how you can make it fair. Mayor Grant said it should be a primary store because the product is so unique. It shouldn't be mixed with other retail business. Councilmember Rousseau said she went to the Leech Lake location. She was impressed. They carded her as soon as she walked in. She asked if the City can establish rules surrounding who's in the store. Assistant to the City Administrator/City Clerk Hanson said the business will want to make sure they comply. The City could have our own controls. Councilmember Holden said the tribal laws are totally different. They are trying to restrict the sale to their own communities. They are trying to make it as difficult as possible for people to just walk in and purchase. Assistant to the City Administrator/City Clerk Hanson said she will need to look further into the compliance aspect. Councilmember Monson said she is surprised the law allows the City to choose between a primary and a secondary use. She said the state has made it clear that cities can't block sales. She thinks allowing only an accessory use, that's not their sole business, could be viewed as blocking the sale. Interim City Administrator Jagoe said in terms of a conditional use it says the"mechanism for which the city approves it". It could be the primary operation of that business. We're requiring it to go through a similar process as the THC. Councilmember Monson asked if the City can make it an accessory use. Interim City Administrator Jagoe said she will verify that. ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION— SEPTEMBER 23, 2024 13 Councilmember Monson said she thinks there should be one stand-alone location. She will have to think more about where to allow it, but she thinks the business district makes sense. Mayor Grant asked what else Staff needs from Council. Assistant to the City Administrator/City Clerk Hanson said if this is to be in place in January, there needs to be some movement because it still has to go to the Planning Commission. Mayor Grant asked what the timing is. Interim City Administrator Jagoe said the moratorium ends January 1 so everything needs to be in place before that. Mayor Grant asked if the moratorium can be extended. Assistant to the City Administrator/City Clerk Hanson said the moratorium cannot be extended. This will need to be brought to the November Planning Commission meeting. Interim City Administrator Jagoe confirmed. She said Staff will bring a draft ordinance back to the next Council Work Session. She will confirm that it can specify primary not secondary business. Initially, she will draft the ordinance similar to the lower potency process. She will pull together some buffer scenarios related to schools but not daycares. Staff will be seeking further direction. Mayor Grant said Council has directed that it should be a cannabis only store. Councilmember Holden wonders if the registered business has more than one owner, do they all need to be included in the registration. What happens if they break the law? Her concern is there may be similar issues to tobacco sales. She thinks that is input that should be given to the OCM. Assistant to the City Administrator/City Clerk Hanson said all applications for licenses begin there. Once they issue the license, cities just register the business. Councilmember Holden said that could change. Councilmember Rousseau thought maybe the stand-alone has to do with insurance. This is so new. There are so many unknowns they don't know what the risks are. It could take a decade to know that. Assistant to the City Administrator/City Clerk Hanson agreed. When THC was passed, some companies just weren't offering coverage. C. T-Mobile Site Use Agreement Mayor Grant asked if Council wanted to discuss this tonight. He asked Staff if we have to do this. Public Works Director/City Engineer Swearingen said relatively soon. The lease expires in April. So, there is still some flexibility. ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION— SEPTEMBER 23, 2024 14 Mayor Grant said Staff provided information showing $3,000-$4,000 per month lease to place equipment on the water tower. Public Works Director/City Engineer Swearingen pointed to the attachment with the tables that was created based on the discussions with surrounding cities in regard to their lease agreements. Mayor Grant asked if most of them have 4% escalators. Public Works Director/City Engineer Swearingen confirmed. Typically, the annual escalator is 4-5%. Councilmember Monson asked if Staff is seeking direction on how to counter. She said $4,000/month with a 5% escalator. Councilmember Holden said if the monthly fee is $3,000, the escalator should be 5%. If it's $4,000, the escalator should be 4%. Public Works Director/City Engineer Swearingen said he's not looking for exact numbers. He is seeking flexibility to go back and negotiate. Councilmember Rousseau said she trusts Public Works Director/City Engineer Swearingen to negotiate. She's hoping for$4,000 at 5%. Councilmember Fabel asked if there was any leverage based on the location of the water tower. If they don't like our number, will they move somewhere else? Public Works Director/City Engineer Swearingen said he said it is a favorable spot. T-Mobile merged with Sprint and they are in the process of decommissioning the Sprint equipment. So T- Mobile would just have this one site on that tower. He thinks it's important to them. Councilmember Fabel wanted confirmation the City isn't running the risk of T-Mobile going somewhere else if our price it too high. Public Works Director/City Engineer Swearingen doesn't believe so. He doesn't think these numbers are unreasonable for T-Mobile. He will bring this back to Council if he needs further direction. D. Rice Creek Commons/TCAAP Discussion This item was not discussed. E. City Historian Councilmember Holden wanted to make people aware that we have a City Historian. This City Historian is writing a book regarding the full history of Arden Hills. She would like to have him give a presentation and make his book available, if residents are interested. Council was in favor of extending the invitation to the City Historian. ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION— SEPTEMBER 23, 2024 15 F. Agenda Planning Mayor Grant said Staff is bringing some personnel items forward that need to be done. Memos will be forthcoming. Councilmember Rousseau would like to address the door-to-door solicitations though the City may be past peak season for this activity. However, she is concerned that so many pest control companies are soliciting services that use heavily regulated substances but don't go through the proper channels at the city to be allowed to solicit. Councilmember Monson said they will discuss the cannabis moratorium and the franchise fees on October 14. So that is already two big discussions. Adding the upcoming personnel items, that meeting seems full. Interim City Administrator Jagoe confirmed. She added the October 28 work session is scheduled as a joint work session with the Planning Commission to go over ordinance review with the consultants. Councilmember Fabel said he wants the speed limit on Snelling between Highway 51 and County Road B added as a topic to discuss. He would like Council to consider bringing the speed limit up to match the surrounding roads. Councilmember Monson asked if it is 25 mph there. Councilmember Fabel confirmed. It's 40 on either side. He thinks the speed limit in that section should be raised. 4. COUNCIL COMMENTS AND STAFF UPDATES ADJOURN Mayor Grant adjourned the City Council Work Session at 6:54 p.m. /90/244&ermi Je suing David Grant Deputy Clerk Mayor