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HomeMy WebLinkAboutCC WS PACKET 06092026CITY OF SAINT ANTHONY VILLAGE WORK SESSION AGENDA Tuesday, June 9, 2026 at 5:30PM Members of the public who wish to attend the meeting may do so in person. Minutes Approval Of CC WS Meeting Minutes CC 05 -26 -2026 WS.PDF Work Session Topics Public Finance Policy Stacie Kvilvang, Ehlers Senior Municipal Advisor, presenting. COVER MEMO - PUBLIC FINANCE POLICY.PDF DRAFT PUBLIC FINANCING POLICY.PDF Franchise Fees Stacie Kvilvang, Ehlers Senior Municipal Advisor, presenting. COVER MEMO - FRANCHISE FEES.PDF Future Work Session Dates, Times And Agenda Items Future Agenda Items FUTURE AGENDA ITEMS.PDF Adjournment If you would like to request special accommodations or alternative formats, please contact the City Clerk at 612 -782 -3334 or email city@savmn.com . People who are deaf or hard of hearing can contact us by using 711 Relay. Our Mission is to promote a high quality of life to those we serve through outstanding city services. 1. A. Documents: 2. A. Documents: B. Documents: 3. A. Documents: 4. CITY OF SAINT ANTHONY VILLAGEWORK SESSION AGENDATuesday, June 9, 2026 at 5:30PMMembers of the public who wish to attend the meeting may do so in person.MinutesApproval Of CC WS Meeting MinutesCC 05 -26 -2026 WS.PDFWork Session TopicsPublic Finance PolicyStacie Kvilvang, Ehlers Senior Municipal Advisor, presenting.COVER MEMO - PUBLIC FINANCE POLICY.PDFDRAFT PUBLIC FINANCING POLICY.PDFFranchise FeesStacie Kvilvang, Ehlers Senior Municipal Advisor, presenting.COVER MEMO - FRANCHISE FEES.PDFFuture Work Session Dates, Times And Agenda ItemsFuture Agenda Items FUTURE AGENDA ITEMS.PDF Adjournment If you would like to request special accommodations or alternative formats, please contact the City Clerk at 612 -782 -3334 or email city@savmn.com . People who are deaf or hard of hearing can contact us by using 711 Relay. Our Mission is to promote a high quality of life to those we serve through outstanding city services. 1.A.Documents:2.A.Documents:B.Documents:3.A.Documents: 4. City of St. Anthony CITY COUNCIL WORK SESSION Minutes 05/26/2026 Present: Mayor & Council: Mayor Wendy Webster, Councilmembers Lona Doolan, Nadia Elnagdy, and Jan Jenson Absent: Thomas Randle Staff: City Manager Charlie Yunker, Assistant City Manager Ashley Morello, City Planner Steve Grittman Others: None Call to Order: Mayor Webster called the Work Session to order at 5:30 p.m. 1. Approval of CC WS Meeting Minutes A. May 12th, 2026, City Council Work Session Minutes Motion by Councilmember Elnagdy, seconded by Councilmember Jenson, to approve the City Council Work Session Minutes of May 12, as presented. Motion carried 4-0. 2. Work Session Topics A. ADU Ordinance Review City Planner Grittman emphasized that this is not a final ordinance, but simply a draft. The goal of this Work Session is to get the Council’s feedback on what has been written so far. He noted that the document was broken into three general categories. He provided an overview of the first category, definitions, which states that ADUs are subordinate dwellings designed to operate as a fully separate dwelling from a main unit. ADUs contain all the components of a dwelling unit, including bathrooms, bedrooms, kitchens, and sanitation areas. City Planner Grittman highlighted that there must be an exterior entrance to the ADU. The second category overviews operational aspects of the ordinance, such as purpose, how parcels can be reviewed, that ADUs should only be on single-family parcels in R1 or R1A districts, that ADUs or the principal dwelling on the property must be occupied by a property owner, that only one ADU will be allowed per lot, city license requirements, and that short-term rental will not be permitted in ADUs. Councilmember Jenson proposed reviewing the Ordinance and asking questions on each topic one at a time. Councilmember Jenson stated that he had a question regarding item 2B. He read the exact language of the text aloud. He asked whether this language permits the City to forcibly terminate an ADU tenant's lease if the property owner sells the home. City Planner Grittman stated that the City May 26th, 2026 St. Anthony Council Work Session - 2 should retain control over the ownership relationship between the tenant and the property owner. He noted that if the new owner of the home would like to continue renting to the current tenant, they are welcome to reapply for a rental license. Councilmember Elnagdy raised concerns about the renters’ rights. She noted that this language leaves the renter without any property rights if the homeowner decides to sell. Councilmember Elnagdy proposed adding an option, such as a non-disturbance agreement, to protect renters better and prevent them from being forced out of their homes without recourse. Councilmember Jenson noted that it is unlikely that a property owner would sell the home to another owner who has no say over the tenant living there. Councilmember Jenson noted that if there is a requirement that the property owner express intent to sell the home to the renter and inform them of the risks of renting the property if they choose to sell, there is no significant issue for the tenant. Councilmember Elnagdy agreed but asked whether there could be a simpler option for new homeowners than a full reapplication, if they are amenable to the current tenant staying in the ADU. Mayor Webster stated that she did not believe the City needed to fully mediate the tenant/landlord relationship and the transition between owners. Councilmember Elnagdy reminded the Council that the rental license follows the property owner, and the new owner would have to apply for a license if they wanted the tenant to stay, which could force the tenant to move out temporarily and then move back in. She expressed that this is complex and that there should be a simpler option for continuation if the new owner chooses. City Planner Grittman noted that this clause was written to prevent an unwanted tenant from living on the new owner's property. He suggested adding a line stating that the tenant may continue living in the ADU, provided the new owner wishes to do so, and the tenant is eligible for a rental license. Mayor Webster asked whether the individual purchasing the home could begin the rental license application before closing. Assistant City Manager Morello highlighted the complexities of facilitating a rental license handover, given the timelines for moving and questions about when an individual acquires property rights during the closing process. She noted that rental licenses must be updated annually and that terminating the previous owner’s license was a logical step. Councilmember Jenson questioned whether Assistant City Manager Morello was suggesting that the renter would have to move. She stated that this is a risk renters take on. Councilmember Jenson agreed that this is a reasonable risk but emphasized the need for clear communication of this risk when the lease is signed, and the homeowner is considering moving. Councilmember Doolan asked whether the sale of a traditional rental home could also result in termination of the rental agreement. Assistant City Manager Morello stated that she believed it could, and that the City requires rental licenses to be updated every year so that an inspection can be performed to ensure the rental dwelling is livable. Councilmember Jenson stated that if a rental company purchases the home and attempts to rent out both the ADU and the main dwelling, this could be done only if the area where the homes are located has fewer rental units than allowed. Councilmember Doolan noted that the ADU does not count as a second count toward the limit; the ADU and the main dwelling are considered one unit. May 26th, 2026 St. Anthony Council Work Session - 3 Councilmember Doolan asked whether a corporation that owns a rental home could convert it into a duplex to increase density, which would count as an ADU. Councilmember Jenson expressed that the residential community would likely not want this and would seek to preserve the true single-family homes in their neighborhoods. Councilmember Elnagdy stated that she believed that, as written, a scenario in which a corporation converts a home into a duplex would not count as an ADU. Councilmember Jenson expressed his appreciation for this clause. Councilmember Doolan asked whether someone who owned two lots on a single parcel and wanted to build a home for their child on the second lot could transfer ownership of that lot to their child. Councilmember Jenson noted that this is unrelated and they are not discussing subdivisions. City Planner Grittman confirmed that parcel subdivisions and title transfers are separate from the discussion of ADUs. Councilmember Doolan noted that few lots in St. Anthony offer opportunities to build an ADU. She asked for clarification on the requirements for the new structure being attached to the primary dwelling. City Planner Grittman stated that the ADU must be attached to the primary dwelling or attached to the garage. Assistant City Manager Morello reminded the Council that the current requirements reflected a first phase of exploring ADUs and that they had proposed expanding this in the Comprehensive Plan. Mayor Webster asked if there was Council consensus to leave the language in item 2B as is, requiring the new property owner to apply for a new rental license. Councilmember Doolan asked whether, if the homeowner were not collecting rent and were letting a family member live in the home, they would be required to apply for a new rental license. City Planner Grittman noted that the rental licenses have an exception for relatives. You are not required to have a rental license if the tenant is a relative. Councilmember Elnagdy asked how the City would know who lives in the home and if they are truly a relative. City Planner Grittman stated that the property owner must provide documentation showing that a relative occupies the dwelling. Councilmember Elnagdy reviewed the Council discussion of short-term rentals. She asked if someone renting a room in a home is a short-term rental. City Planner Grittman stated that an individual renting a room in a home was allowed. Assistant City Manager Morello clarified that she believed the code language prohibited short-term rentals entirely. City Planner Grittman agreed. Councilmember Elnagdy asked whether concerns about short-term rentals, such as changes in neighborhood character or excessive tenant turnover, still existed. Councilmember Doolan questioned how short-term rentals differ when the owner lives in the attached unit. May 26th, 2026 St. Anthony Council Work Session - 4 Mayor Webster stated that she believed this was an exception and that if the property owner moved, the exception would go away. Assistant City Manager Morello noted that this was an exception granted to owners who had been grandfathered in before restrictions on short-term rentals were implemented. City Manager Yunker highlighted the difference between a renter and a roommate. A renter is a documented agreement with someone, likely a stranger, whereas a roommate can be more of a handshake agreement. He expressed that the City is only concerned with managing renter relationships. Mayor Webster suggested that the Council move on to item three, operational requirements. Councilmember Jenson expressed that he is comfortable with the current language. He cited his prior support for building above a garage. Mayor Webster thanked Public Works and the Engineering staff for their input. City Planner Grittman identified a gap in the current language. The language was that an ADU can be attached to a single-family home or attached to a detached garage. He noted that they do not require that the 1000-square-foot building allowed to have an ADU be a garage; that is only assumed. He proposed a scenario in which someone attempts to add an ADU to a large shed. He asked the Council if this was something they would be comfortable with. Councilmember Jenson questioned discrepancies in ADU sizing requirements. City Planner Grittman asked the Council whether individuals would be allowed to build new structures to which to attach an ADU. Councilmember Doolan noted that a section states the ADU must be attached to another structure, so it would have to be attached to a shed or garage, regardless of when that structure was built. Mayor Webster asked whether the Council would be comfortable with a fully detached ADU on properties where it would meet the size requirements. Councilmember Doolan reminded the Council that a primary reason for not wanting a fully detached ADU was the complexity of connecting the new building to the sewer system. Assistant City Manager Morello proposed that this possibility be moved to the discussion surrounding the Comprehensive Plan, and that further discussion focus on possible scope creep from not clarifying language in the current document. Councilmember Doolan asked whether the language could be modified to refer to a detached structure rather than a detached garage if they are seeking to allow individuals to add an ADU above a shop, shed, or other detached building. Assistant City Manager Morello proposed treating this ordinance as an exploratory phase one and, in the future, considering the addition of new structures as allowable ADUs. May 26th, 2026 St. Anthony Council Work Session - 5 Councilmember Doolan asked whether an ADU should be required to provide an enclosed parking space for the renter. City Planner Grittman noted that the current code requires single-family homes to have at least one enclosed garage space. The language is intended to ensure that adding an ADU would preserve the requirement of at least one enclosed space on the property and would require that the renter have parking available somewhere on the property. Councilmember Jenson proposed rewriting the item to state that off-street parking must be provided to the tenant. City Planner Grittman noted a common complaint among many cities: outdoor parking is spread across single-family neighborhoods, where cars overwhelm the property, park on the grass, or cannot find parking in the winter. He noted that managing how many cars can park outdoors limits this. Mayor Webster expressed support for leaving the language in the ordinance. City Planner Grittman reiterated that the code language requires properties to have one enclosed space, one additional off-street space, and an additional space designated for the ADU. Councilmember Doolan stated that she supported the current language because it does not require the renter to be assigned a garage parking space. Councilmember Jenson asked whether the construction of the ADU must comply with the sustainable building code being drafted. City Planner Grittman stated that these rules currently apply only to residential structures with at least five units, so they would not apply to the structure in question. Councilmember Doolan noted that requiring individuals to adhere to a sustainable building code would go against their wishes, as it would not infringe on expansions and redevelopments. Councilmember Elnagdy asked why there is a maximum size for ADUs. City Planner Grittman stated that this is common in other cities’ codes, primarily to ensure that the ADU does not usurp the primary dwelling. He stated it also helps address concerns related to utility capacity. Councilmember Jenson expressed confusion about the 1000-square-foot maximum, given that the original structure being added to must be 400-600 square feet. City Planner Grittman stated that if someone wanted to build an ADU, they would be required to devote 400-600 square feet to living space and the other 400-600 square feet to a shop, garage, or other structure. He confirmed that only a limited amount could be designated for residential space. Councilmember Doolan asked whether someone built a new structure not for the purpose of being an ADU but later decided to add one, and whether that would be allowed. The other members of the Council stated that this would be acceptable, but that the sewer must be connected to it. Councilmember Elnagdy questioned whether the requirement to have ADU access stairs constructed in an aesthetically similar color and material to the existing structure was overstepping. Councilmember Doolan concurred with this point. May 26th, 2026 St. Anthony Council Work Session - 6 Mayor Webster asked if similar code language already exists surrounding aesthetics. City Planner Grittman stated that it does not apply to stairs, but accessory structures must be the same color and style as the primary structure. Assistant City Manager Morello noted that there are also restrictions on fence styles. Mayor Webster proposed retaining the language as it reflects current City code, and discussing all of these aesthetic codes separately at a later date. Councilmember Doolan asked whether separate metering must be provided for utility boxes serving ADUs and the principal dwelling. City Planner Grittman stated that applicants can decide independently if they would like to meter the tenant’s utility usage. Mayor Webster thanked the Staff present for their thoughtfulness and the detailed outline containing useful Staff information. 3. Future Work Session Dates, Times, and Agenda Items A. Future Agenda Items 4. Adjournment Mayor Webster adjourned the meeting. The meeting adjourned at 6:36 p.m. Respectfully submitted, Samina Crabtree TimeSaver Off Site Secretarial, Inc. MEMORANDUM TO: Charlie Yunker, City Manager FROM: Stacie Kvilvang, Ehlers DATE: June 9, 2026 SUBJECT: Public Finance Policy At the April 28,2026 City Council work session,Council expressed interest in the development of a public financing policy that would incorporate various objectives the City wanted to accomplish with future redevelopment projects,primarily related to inclusion of affordable units in any new multi-family developments. We have worked with staff to refine a standardized Public Financing Policy (the “Policy”)format that many cities use and tailored it to incorporate the City objectives mentioned above as follows: 1.Section 2 -City objectives for providing public assistance:Added A.2 which states that the City wants to assure that any new multi-family development contains units affordable at or below 60%of the area median income (AMI).This section is not meant to be prescriptive (i.e.dictate the number of units),but to set the tone as to your desire for inclusion of affordable units.We purposefully say at or below 60%AMI as project can contain units at 50%or 30%AMI,which would be agreed to with the city based upon the amount of assistance requested. 2.Section 3 –Public financing principles.Added 6.which states that any multi-family project requesting assistance will be required to file a Declaration of Restrictive Covenants outlining the affordability parameters,which will be filed with the property and in effect for 26 years,even if the term of assistance is shorter (term typically begins when the project receives a Certificate of Occupancy from the city). 3.Section 4.1 -Minimum qualifications /requirements:Added A.to state that any project that contains multi-family housing must meet the objective noted above of including units affordable at or below 60% AMI. 4.Section 4.2 -Desired qualifications:Added C.2.(i)which states that priority consideration will be given to projects that provide at least 20%of units affordable at 50%AMI,which correlates to the statutory requirements of a Housing TIF district.The Policy also states that if a different type of TIF district is requested (i.e.redevelopment or renewal and renovation),that in the city’s sole discretion it may consider a different level and percentage of affordability based upon the size and location of the project.This provides the city with flexibility to ladder affordability because it is not confined by statute (i.e.you could still have 20%of the units affordable but it could be at different levels -10%at 60%AMI,5%at 50%,5%30%AMI,or any combination thereof) Since this Policy would also cover any commercial,office or industrial development,you are required to have in your Policy a minimum number of jobs to be created and a wage floor for any development you provide $150,000 or more in assistance to.We have placed the standard requirements that most cities have which is one (1)full-time equivalent paid at 150%of the State minimum wage in effect at the time of approval.These are meant as minimums to provide the city maximum flexibility in case a commercial project it really wants is not about job creation.Also,if job creation is a goal,it does not mean that they only have to create 1 job at the stated wage level.You,as a funding partner,can dictate the number of jobs you want and if you want some of those jobs to be higher paying.The agreed upon requirements would be incorporated into a formal,approved agreement after a public hearing. Saint Anthony Public Financing Policy Page 1 City of Saint Anthony and Saint Anthony Housing and Redevelopment Authority Public Financing Policy 2026 INTRODUCTION: This Public Financing Policy (the “Policy”)is adopted for purposes of the business subsidies act,pursuant to Minnesota Statutes,Sections 116J.993 through 116J.995,as amended (the “Statutes”).Terms used in this Policy are intended to have the same meanings as those used in the Statutes.Subdivision 3 of the Statutes specifies forms of financial assistance that are not considered a business subsidy.This list contains exceptions for several activities,including redevelopment,pollution clean-up,and housing,among others.By providing a business subsidy,the city commits to holding a public hearing,as applicable,and annually reporting to the Department of Employment and Economic Development (“DEED”)on job and wage goal progress if and when required by the Statutes. 1.PURPOSE AND AUTHORITY: A.The purpose of this document is to establish criteria for the City of Saint Anthony (“City”)and the Saint Anthony Housing and Redevelopment Authority (“HRA”)for the granting of business assistance and public financial assistance for private development within the City.As used in this Policy,the term “City”shall be understood to include the HRA.The criteria outlined in this Policy shall be used as a guide in processing and reviewing applications requesting public financing assistance.As used in this Policy, the term business assistance includes,but is not limited,assistance constituting a “business subsidy” under the Statutes. B.The City's ability to grant business assistance is governed by the limitations established in the Statutes and other provisions of Minnesota law.The City may choose to apply the criteria contained herein to other development activities not covered under the Statutes.City public financial assistance may or may not be considered a business subsidy as defined by the Statutes. C.Public finance assistance include grants by state or local government agencies,contributions of personal property,real property,infrastructure, the principal amount of a loan at rates below those commercially available Saint Anthony Public Financing Policy Page 2 to the recipient of the assistance,any reduction or deferral of any tax or any fee,tax increment financing (TIF),abatement of property taxes,loans made from City funds,any guarantee of any payment under any loan,lease,or other obligation,or any preferential use of government facilities given to a business.Certain types of public finance assistance may not be considered business subsidies under the Statutes. D.The criteria contained herein shall be used in conjunction with other relevant policies of the City.Compliance with the Policy shall not automatically mean compliance with such separate policies. E.The City,at its sole discretion,may deviate from the job and wage goals criteria outlined in Section 5 D,E,and F below by documenting in writing the reason(s)for the deviation.The documentation shall be submitted to DEED with the next annual report. F.The City may amend this document at any time.Amendments to this Policy are subject to public hearing requirements contained in the Statutes. 2.CITY’S OBJECTIVE FOR THE USE OF PUBLIC FINANCING: A.As a matter of adopted policy,the City may consider using public financial assistance which may include tax increment financing (TIF),tax abatement, and other forms of public financing as appropriate,to assist private development projects.Such assistance must comply with all applicable statutory requirements and accomplish one or more of the following objectives: 1.Remove blight and/or encourage redevelopment in designated redevelopment/development area(s)per the goals and visions established by the City. 2.Assure any new multi-family development contains units affordable at or below 60% AMI. 3.Expanding housing options to meet the needs of people at all life stages and income levels. 4.Expand and diversify the local economy and tax base. 5.Encourage additional unsubsidized private development in the area, either directly or through secondary “spin-off” development. 6.Offset increased costs for redevelopment over and above the costs that a developer would incur in normal development (determined as part of the But-For analysis). 7.Facilitate the development process and promote development on sites that could not be developed without this assistance. Saint Anthony Public Financing Policy Page 3 8.Retain local jobs and/or increase the number and diversity of quality jobs 9.Provide opportunities for small businesses and/or entrepreneurs and promote resident economic stability. 10.Meet other uses of public policy,as adopted by the City from time to time. 3.PUBLIC FINANCING PRINCIPLES: A.The guidelines and principles set forth in this Policy pertain to all applications for City public financial assistance regardless of whether they are considered a Business Subsidy as defined by the Statutes.The following general assumptions of development/redevelopment shall serve as a guide for City public financial assistance: 1.All viable requests for City public financial assistance shall be reviewed by staff and a third-party municipal advisor who will inform the City of its findings and recommendations.This process,known as the “But For”analysis is intended to determine if the project would not be feasible but for the City assistance. 2.The City shall establish mechanisms within the development agreement to ensure that adequate checks and balances are incorporated in the distribution of financial assistance where feasible and appropriate. 3.TIF and abatement will be provided on a pay-as-you-go-basis.Any request for upfront assistance will be evaluated on its own merits and may require security to cover any risks assumed by the City. 4.The City may set up TIF districts in accordance with the maximum number of statutory years allowable;however,this does not mean that the applicant will be granted assistance for the full term of the district. 5.The City shall elect to have the fiscal disparities contribution come from inside applicable TIF district(s)to eliminate any impact to the existing tax payers of the community. 6.Any multi-family projects requesting assistance will be required to maintain the affordability levels for 26 years,even if the assistance term is shorter.Developers will be required to file a Declaration of Restrictive Covenants with the property to document the required affordability parameters agreed upon with the City. 7.Public financing will not be used in projects that would give a significant competitive financial advantage over similar projects in the area due to the use of public subsidies.Applicants should be Saint Anthony Public Financing Policy Page 4 able to provide information to support that City public financial assistance will not create such a competitive advantage.Priority consideration will be given to projects that fill an unmet market need. 8.Public financial assistance will not be used in a project that involves a land and/or property acquisition where the price is in excess of the fair market value. 9.The applicant shall pay all applicable application fees and pay for the City’s fiscal and legal advisor time as stated in the Public Assistance Application. 10.The applicant shall proactively attempt to minimize the amount of public assistance needed through the pursuit of grants,innovative solutions in structuring the deal, and other funding mechanisms. 4.PROJECTS WHICH MAY QUALIFY FOR PUBLIC FINANCING ASSISTANCE: A.All new applications for public financial assistance that are considered by the City must meet each of the following minimum qualifications.However, it should not be presumed that a project meeting these qualifications will automatically be approved for assistance.Meeting the qualifications does not imply or create contractual rights on the part of any potential applicant to have its project approved for assistance. 4.1 MINIMUM QUALIFICATIONS/REQUIREMENTS: A.In addition to meeting the applicable requirements of State law,the project shall meet one or more of the public financing objectives outlined in Sec.2. Any project that contains construction of new multi-family rental must meet the objective outlined in Section 2A (2). B.The applicant must demonstrate to the satisfaction of the City that the project is not financially feasible “but for”the use of public financial assistance. C.The project is,or will be through the City approval processes,consistent with the Comprehensive Plan,Zoning Ordinances,Design Guidelines or any other applicable land use documents of the City. D.Prior to approval of a financing plan,the applicant shall provide any requested market and financial feasibility studies,appraisals,soil borings, private lender commitment,and/or other information the City or its financial advisors may require in order to proceed with an independent evaluation of the proposal. E.The applicant must provide adequate financial guarantees to ensure the repayment of any public financing and completion of the project.These may include,but are not limited to,letters of credit,personal deficiency guarantees, guaranteed maximum cost contract, etc. Saint Anthony Public Financing Policy Page 5 F.Any applicant requesting public financial assistance must be able to demonstrate a previous capability for successful development,as well as specific capability regarding the type and size of the development proposed, unless for a use specified in 4.2C (6-7).Public financing shall not be used when the applicant’s credentials,in the sole judgment of the City,are inadequate due to previous history relating to completion of projects, general reputation,and/or bankruptcy,or other problems or issues considered relevant to the City. G.The applicant,or its contractual assigns,shall retain ownership of any portion of the project long enough to complete it,stabilize its occupancy, establish project management and/or needed mechanisms to ensure successful operation. 4.2 DESIRED QUALIFICATIONS: A.Projects providing a high ratio of private investment compared to City public investment shall receive priority consideration.Private investment includes developer cash,government and bank loans,conduit bonds,tax credit equity, and land if already owned by the applicant. B.Proposals that significantly increase the amount of property taxes paid after redevelopment will receive priority consideration. C.Proposals that encourage the following will receive priority consideration: 1.Implements the City’s vision and values for a City-identified development or redevelopment area. 2.Promotes housing investment that meets the following City goals: i.Provides at least 20%of the units affordable at or below 50%of area median income (AMI),in accordance with housing TIF requirements.If the project is eligible to be included in another type of TIF district or if the developer is requesting other forms of public financing,the City may consider in its sole discretion a different level and percentage of affordability based upon the size and location of the proposed project. ii.Increase housing choice within the community;diversify existing housing stock;and provide options that do not currently exist iii.Provide clean, safe, and affordable housing units 3.Provides significant improvement to surrounding land uses, neighborhoods, and/or the City 4.Attracts or retains an employer within the City 5.Provides increased quality and higher paying jobs Saint Anthony Public Financing Policy Page 6 6.Provides opportunities for small businesses and/or entrepreneurs 7.Projects that promote resident economic stability 8.Redevelops a blighted, contaminated and/or challenged area 9.Preserves and/or stabilizes commercial or industrial nodes 10.Adds needed public infrastructure such as roads and utilities 5.BUSINESS SUBSIDY PUBLIC PURPOSE,JOBS AND WAGE REQUIREMENT: A.All business assistance must meet a public purpose with measurable benefit to the City as a whole. B.Job retention may only be used as a public purpose in cases where job loss is specific and demonstrable.The City shall document the information used to determine the nature of the job loss. C.The creation of tax base shall not be the sole public purpose of a subsidy. D.Unless the creation of jobs is removed from a particular project pursuant to the requirements of the Statutes,the creation of jobs is a public purpose for granting assistance.Creation of at least 1 Full Time,or Full Time Equivalent (FTE)jobs is a minimum requirement for consideration of assistance.For purposes of this Policy,FTE jobs must be permanent positions with set hours, and be eligible for benefits. E.Part-Time Equivalent jobs may receive a partial credit and be counted toward the job goals. F.The wage floor for wages to be paid for the jobs created shall be not less than 150%of the State of MN Minimum Wage.The City will seek to create jobs with higher wages as appropriate for the overall public purpose of the assistance.Wage goals may also be set to enhance existing jobs through increased wages,which increase must result in wages higher than the minimum under this Section. G.After a public hearing,if the creation or retention of jobs is determined not to be a goal, the wage and job goals may be set at zero. 6.SUBSIDY AGREEMENT: A.In granting a public financing assistance,if required by the Statutes,the City shall enter into a subsidy agreement with the recipient that provides the following information: 1.Wage and job goals (if applicable) 2.Commitment to provide necessary information for reporting purposes 3.Five-year operation commitment after the benefit date Saint Anthony Public Financing Policy Page 7 4.Recourse for failure to meet goals required by the Statutes B.The subsidy agreement may be incorporated into a broader development agreement for a project. C.The assistance agreement will commit the recipient to provide the reporting information required by the Statutes, if any. D.For assistance that does not constitute a business subsidy under the Statutes,the grantee and the City or the HRA will enter into an agreement setting forth the terms of the assistance. 7.PUBLIC FINANCING PROJECT EVALUATION PROCESS: A.The following methods of analysis for all public financing proposals will be used: 1.Project is deemed consistent with City’s Goals and Objectives 2.Consideration of project meeting minimum qualifications 3.Consideration of project meeting desired qualifications 4.Project meets “but-for” analysis and/or statutory qualifications Please note that the evaluation methodology is intended to provide a balanced review.Each area will be evaluated individually and collectively and in no case should one area outweigh another in terms of importance to determining the level of assistance. MEMORANDUM TO: Charlie Yunker, City Manager Deborah Maloney, Finance Director FROM: Stacie Kvilvang, Ehlers DATE: June 9, 2026 SUBJECT: Franchise Fees for Electric and Gas Utilities At the April 28, 2026, work session, the City Council expressed an interest in further exploring a Franchise Fee (the “Fee”) to lessen the tax levy burden to support capital projects and other needs for the city. Since that meeting, we have received the number of accounts in the various categories from Xcel as noted in the table below. If the city wants to pursue a Fee, we will obtain similar information from Centerpointe Energy, which typically has fewer accounts since not all users have natural gas. As noted, the city has more residential accounts than commercial accounts, which is not atypical for any community. Based upon this information, we worked with staff to develop three scenarios of proposed Fees that provide approximately $627,000 to $1 million in potential funding for the city. For Option 1 we sized the Fee by account type based upon the 2026 metro city median Fee. Since commercial accounts receive economic benefit from use of the utilities in the right-of-way, they typically pay a higher Fee than residential users. As noted, with these assumptions, 65% of the total revenue comes from residential, with 35% coming from commercial users: Electrict (Excel Energy)Average Monthly Count Residential 4,258 Small C&I – Non-Demand 209 Small C&I – Demand 145 Large C&I 28 Monthly Flat Fee X 2 Utilities (Electric/Gas)Annual Payment Annual Revenue % of Revenue Residential 4.00$ 8.00$ 96.00$ 408,768.00$ 65% Small C&I – Non-Demand 6.00$ 12.00$ 144.00$ 30,096.00$ Small C&I – Demand 28.00$ 56.00$ 672.00$ 97,440.00$ Large C&I 135.00$ 270.00$ 3,240.00$ 90,720.00$ TOTAL 627,024.00$ 100% User Type 35% Option 1 - Fees at Median of Metro Fees To provide options to the city on how to generate more in Fees or how to spread the percent of revenue more evenly or more weighted to commercial, we kept residential at the median metro Fee but changed commercial rates as follows: 1. Option 2 - All commercial accounts are double the median Fee; and 2. Option 3 - Small commercial are at the high end of the metro Fee and Large commercial is $10 more than double the metro median Fee in option 2 As shown in the table, Option 2 results in approximately $218,000 more in annual revenue (total of $845,000) and shifts the burden to be approximately a 50/50 split between residential and commercial (can be modified to show actual 50/50). Option 3 results in approximately $389,000 more in annual revenue (total of $1.015M) and shifts the burden to be approximately a 40/60 split between residential and commercial. We understand the city may be making improvements to facilities for both police and fire to accommodate current needs of those departments. The estimated cost is approximately $21 million and will be refined as the City Council and staff move further along in the process of determining options and scope for the project. To pay for the proposed project, the city will need to issue bonds due to the cost. We prepared a preliminary bond run and assumed that payments would be made over a 20-year period, which is a typical term for city facilities. Based upon today’s borrowing rates, it is estimated that 100% of annual debt service would be approximately $1.5 million. The city could implement the Fee to offset a tax levy requirement to pay for the improvements. There is no guidebook and thus no right or wrong way to determine a Fee, it is up to each city based upon their needs. Overall, the Fees shown in the three (3) scenarios fall within the median or within the max range of Fees charged by other cities in the metro area. The City can choose whatever percent of revenue (more or less than shown in the tables) it deems appropriate for the Fee based upon user type and we can update our analysis accordingly. Monthly Flat Fee X 2 Utilities (Xcel / Center Pt.)Annual Payment Annual Revenue Difference From Option 1 % of Revenue Residential 4.00$ 8.00$ 96.00$ 408,768.00$ -$ 40% Small C&I – Non-Demand 28.00$ 56.00$ 672.00$ 140,448.00$ 110,352.00$ Small C&I – Demand 80.00$ 160.00$ 1,920.00$ 278,400.00$ 180,960.00$ Large C&I 280.00$ 560.00$ 6,720.00$ 188,160.00$ 97,440.00$ TOTAL 1,015,776.00$ 388,752.00$ 100% User Type 60% Option 3 - Residential at $4 Small C/I at Metro High and Large C/I at double Metro Median + $10 to get to 60% FUTURE COUNCIL AGENDA ITEMS Date Type Staff Present / Contributing Packet Due Date 2026 June 23 Work Session Comprehensive Plan Overview City Council City Manager June 17 June 23 Regular Public Finance Policy Special Event Permit - The Village Muni City Council City Manager June 17 June 30 Joint Work Session Comprehensive Plan Preliminary Planning City Council City Manager June 24 July 14 Work Session Sustainable Building Ordinance ADU Ordinance City Council City Manager City Planner July 8 July 14 Regular Planning Commission items from June Quarterly Donations & Grants Audit Report Quarterly Goals Update Active Transportation Demonstration City Council City Manager Finance Director City Engineer July 8 July 28 Work Session 2027 Initial Property Tax Levy Scenarios City Council City Manager Finance Director July 22 July 28 Regular Liquor Operations Mid Year Report VillageFest Presentation Night to Unite Presentation Night to Unite Proclamation Public Safety Engagement Presentation City Council City Manager Liquor Op Mgr Police Chief Fire Chief July 22 August 10 Work Session Discuss Updated Levy Scenarios/Detailed General Fund Budget City Council City Manager Finance Director August 4 August 10 Regular Planning Commission items from July City Council City Manager August 4 August 25 Work Session City Council City Manager City Planner August 19 August 25 Regular 2027 Proposed Budget & Levy Presentation City Council City Manager Finance Director August 19 September 8 Work Session City Council City Manager City Planner September 2 September 8 Regular Planning Commission items from August 2027 Preliminary Operating Budget and Debt Levy-PUBLIC HEARING Students in Leadership-Consent City Council City Manager Finance Director Engineer September 2 September 22 Work Session Existing and Future Community Center Needs Discussion City Council City Manager September 16 FUTURE COUNCIL AGENDA ITEMS Date Type Staff Present / Contributing Packet Due Date September 22 Regular Spirit of St. Anthony Award Fire Prevention Presentation Planning Commission items from August Climate Plan Update Energy Action Plan Update City Council City Manager Fire Dept Sustain. Coord. September 16 October 13 Work Session 2027 Long Term Capital Budget Plalns City Council City Manager October 7 October 13 Regular City Council City Manager October 7 October 27 Work Session 2027 Utility Rates and Budgets City Council City Manager October 21 October 27 Regular Quarterly Donations & Grants Quarterly Goals Update City Council City Manager October 21 November 10 Work Session Commission Interviews City Council City Manager November 4 November 10 Regular Score Grant Funding Application Approval Canvass Election Results City Council City Manager November 4 November 24 Work Session City Council City Manager November 18 November 24 Regular Fire Poster Contest Winners Approval Plans & Specifications & Order Advertisement for Bids for the upcoming Street Project Fee Schedule Review City Council City Manager Fire Chief City Engineer November 18 December 8 Work Session Goal Setting Preparation City Council City Manager December 2 December 8 Regular Planning Commission items from November Appoint Parks and Planning Commissioners and Chair/Vice Chairs Setting Salary of City Manager Authorizing Transfers & Closing of Specified Funds Setting the 2027 City & HRA Budgets and Final Property Tax Levy - PUBLIC HEARING 2027 Fee Schedule MS4 Quarterly Goals update Final reading and adoption of water, sewer, & stormwater City Council City Manager Finance Director December 2 December 22 Regular (Typically Cancelled) 2027 January 12 Work Session City Council City Manager January 6 FUTURE COUNCIL AGENDA ITEMS Date Type Staff Present / Contributing Packet Due Date January 12 Regular Planning Commission items from December Housekeeping Resolutions Quarterly Donations & Grants NYFS Agreement Outside Orgs-Council City Council City Manager NYFS January 6 January 26 Work Session 2027 Goals Draft City Council City Manager January 20 January 26 Regular Public Works Snow Plowing Operations presentation City Council City Manager PW Director January 20 February 9 Work Session City Council City Manager February 3 February 9 Regular Planning Commission items from January Public Hearing-2028 Budget Calendar and Process 2027 Planning Commission Work Plan- (motion only) 2027 Parks and Environmental Commission Work Plan- (motion only) Adoption of Strategic Plan City Council City Manager Finance Director February 3 February 23 Work Session Miscellaneous Ordinance Revisions City Council City Manager February 17 February 23 Regular City Council City Manager February 17 March 9 Work Session City Council City Manager March 3 March 9 Regular Planning Commission Items from February Finance Annual Report Public Works Annual Report NineNorth Presentation City Council City Manager Finance Director PW Director March 3 March 23 Work Session City Council City Manager March 17 March 23 Regular Fire Annual Report Police Annual Report City Council City Manager Police Dept Fire Dept March 17 April 13 Work Session City Council City Manager April 7 April 13 Regular Planning Commission Items from March Quarterly Donations & Grants Arbor Day Proclamation Earth Day Proclamation Quarterly Goals Update City Council City Manager April 7 April 27 Work Session City Council City Manager April 21 April 27 Regular Insurance Renewal & Tort Limits- Consent Villager of the Year and Business of the Year City Council City Manager Finance Director April 21 May 11 Work Session City Council City Manager May 5 FUTURE COUNCIL AGENDA ITEMS Date Type Staff Present / Contributing Packet Due Date May 11 Regular Planning Commission items from April Salo Park Concert Series Presentation City Council City Manager May 5 May 25 Work Session City Council City Manager May 19 May 25 Regular City Insurance Renewal City Council City Manager Finance Director May 19 June 8 Work Session City Council City Manager June 2 June 8 Regular Planning Commission Items from May City Council City Manager June 2 June 22 Work Session City Council City Manager June 16 June 22 Regular City Council City Manager June 16 July 13 Work Session 2028 Initial Property Tax Levy Scenarios City Council City Manager Finance Director July 7 July 13 Regular Planning Commission items from June Quarterly Donations & Grants Audit Report Quarterly Goals Update City Council City Manager Finance Director July 7 July 27 Work Session City Council City Manager July 21 July 27 Regular Liquor Operations Mid Year Report VillageFest Presentation Night to Unite Presentation Night to Unite Proclamation Public Safety Engagement Presentation City Council City Manager Liquor Op Mgr Police Chief Fire Chief July 21 August 10 Work Session Discuss Updated Levy Scenarios/Detailed General Fund Budget City Council City Manager Finance Director August 4 August 10 Regular Planning Commission items from July City Council City Manager August 4 August 24 Work Session City Council City Manager City Planner August 18 August 24 Regular 2028 Proposed Budget & Levy Presentation City Council City Manager Finance Director August 18 September 14 Work Session City Council City Manager City Planner September 8