Licensing Hearing - Regular Meeting

Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. ¶¶ ¦ ¦ ¦ Thank you. Thank you. Thank you. Thank you. . . Let's call the City Council Policy Committee to order. Roll call, please. Council Member Bui. Here.

Council President Nacre? Here. Council Member Jost? Here. Council Member Coleman? Here. Council Member Kim? Here. Council Member Yang? Here. Council Member Johnson? Seeing six present, one absent.

All right, good morning, everyone. Thank you all so much for attending our policy committee today. Sorry, again, for the late start due to some building issues, but we seem to be back on track. Our first topic on the agenda is a discussion of our downtown noise ordinance and possible changes that we might want to make to it. And we have three different presenters to sort of round out all aspects of this issue. First, really pleased to present Welcome, Director Zhang and Deputy Director Nijelic from the Department of Safety and Inspections to give us an overview of the ordinances in its current form. We'll then hear from St. Paul Police about how that's enforced. And then we'll hear from the Capitol River Council about community engagement they've been doing about how we might want to change it. So with that, I will turn things over to DSI. And we have 30 minutes total for this conversation. So we'll just ask our presenters to keep themselves to the right amount of that, knowing that we want to have at least a good 10 minutes at the end for conversation and questions. Welcome.

Good morning. Still trying to catch my breath running over here. It's my first time here, so I just wanted to introduce myself formally. I'm Council President, Council Members. I'm E.S. Xiong, Director of Safety Inspections, and Deputy Director will be presenting, and I'm here to help answer questions. So thank you. Welcome. Welcome.

Thank you, Director. Good morning, Council President, Council Members. Sorry for being late. We were trucking. Unfortunately, the traffic was slow. All right, it was good, not slow. Anyway, so thank you for the opportunity to present this morning in regards to sound. Or is it noise? Or is it a disturbance? It all depends on who is hearing it and what they're hearing. But clearly, as a society, we are creating more opportunities and sources for noise. And we want it louder. And of course, then there's the opposite side thing. People are receiving that noise. We're going to briefly go through, but know that this is a conversation that we all are looking forward to as we look to update our ordinances. So real quick from the top, when we look at noise ordinance in the city of St. Paul, there's pretty much two guiding sort of noise ordinances. There's the one on noise regulations, in particular noise as a public nuisance, of which St. Paul PD will speak to. which is basically unlawful for any person to make, you know, that would cause significant discomfort or annoyance to a reasonable person of ordinary sensibilities in the area. Reasonable person, ordinary sensibilities. So that's sort of that overarching thing about our noise ordinance. It's a very important one to remember because it sort of guides a lot of things we do. Characteristics and conditions considered in determining noise as a nuisance, time of day, duration, proximity to sleeping facility or residential, number of people that are affected, noise sound level in comparison to ambient, and then land use from which the noise emanates, as well as where it is received. So that's where St. Paul PD can speak to how they get to enforce that challenge, as you can imagine, but also it sort of sets the tone for our city. So beyond that, then we get into more specifics. So drilling down saying, okay, yeah, there's a lot of generally with this, but what does that mean for specifics? So within ordinance section 293.06, domestic power tools. No person shall operate any domestic power tool between the hours of 10 p.m. and 7 a.m. So once again, these are all citywide ordinances. I'm starting with citywide ordinances, and then I'll start going and showing the ones that are more unique to downtown so we start seeing the differences. But for domestic power tools, once again, 10 p.m. to 7 a.m., not allowed to use. Noise source limitations. Now this is the other side of things. So we had the ordinary person sensibility. We now also have noise source limits set at the state level and we apply it at the city level. And basically it's based on the receiving use and what's the volume they can receive and it's in the context of what the use of that particular area is. So going to the table. I think some of you have seen this before, but basically it lays out the different classes, and then the classes are set by the zoning district. So within the class, each of those zoning districts would fall within it. As you can see, the lower class, class one, which is more our residential, non-downtown, is gonna be 65 during the day and 55 at night. If you get to class three, which is our downtown, you're gonna see that it's 80 decibels all times of the day. So that's one, now we're starting to see the distinction between downtown and outside of downtown. One thing to note, the sound level limit is based on the one hour L10. L10 means that the noise disturbance was greater than six minutes or 10% of an hour above that volume. So you have to, it's not just a single bump, it's gotta be at least 10% or six minutes of an hour above that level. And this is quick sound. If you ever want more, we can bring in calibrated sound measures, show you all the wonderful things, talk about DBAs and all that, but we'll keep it high level. We may have you back. Thank you. Amplified sound restrictions. And this is one that comes before yourself quite a bit. Amplified sound, which exceeds the sound level restrictions receiving land use classifications in the previous table. We use pre-calibrated measurements when we go out. The only way you can violate that, or not violate, exceed that, is an amplified sound permit, which is a administrative permit that we issue. Then of course, sound level variances, which is something that you oversee and approve. So those are the two mechanisms to go above those noise source limits on that table. With amplified sound, we see it a lot with concerts. And we've been seeing more and more higher requests for volume and longer concerts. So clearly, one of the disturbances out there. Amplified sound permit, this is once again administratively issued by DSI for residential up to 80 decibels measured at 50 feet from the source. And non-residential, once again we're starting to see the difference between outside downtown and downtown. But the non-residential would also apply outside downtown in the commercial areas. And that would be up to 90 decibels measured at 50 feet. So I see the difference between the receiving areas. Solid waste regulations. This is another one that's sort of a distinction between downtown and outside downtown. For residential areas, solid waste collector license under this section may only collect mixed municipal solid waste for separate waste streams between the hours of 6 a.m. and 10 p.m. in residential areas of the city. So compliance penalties and enforcement.

Does that mean downtown waste can be picked up any time of day?

Yeah.

Thank you, Council President, for clarification.

And then, of course, we come to compliance, penalties, and enforcement. And we cannot get to administrative citations fast enough, so thank you for your work on that. We are very excited to have that as a tool. Right now, a violation would be a misdemeanor sentence of not more than 90 days in jail and or a fine of not more than $1,000 or both. But as we know, it's probably not going to be because it's a low-level offense. And so a lot of that doesn't. And is it really the appropriate consequence of misdemeanor? Well, that's another conversation for another day. The other way we deal with compliance is business licensing chapters. So if you are a business owner and you are creating conditions, once again, unreasonably annoying, we can look at adding a condition on somebody's license. For example, bars or restaurants, 1 a.m., Take the bucket of glass and dump it in the dumpster at 1 a.m. That's something that we can say to them condition-wise. Let's do that at 7 a.m. and not at 1 a.m. So we can look at conditions so we can look at what's reasonable for the business but also for the neighbors. Considerations, these are things I'm sure you've thought of, but something we want to make sure. What is the source of the disturbing noise nuisance? What is the issue that we're trying to solve? Just to make sure we have a good idea, because if we know what we're looking at, we can really look at solving that issue, because this is a multi-dimensional issue. What are the other competing interests, goals, and priorities? For example, clear sidewalks. If you can't clear your sidewalks because of noise, you have to wait to a certain time. Do we have sidewalks that are impassable downtown as early? Trash collection, same thing. Trash hauling during rush hour. And then the other thing is appropriate legal and enforcement tools. What are the laws and consequences we can have to make sure that we're enforcing the noise limits? Because some of the issues we have is just not having good enforcement tools. And so therefore, we're not able to enforce the laws that we already have. So really looking at those three coming together and not forgetting about if we don't have good tools, We can have the best laws, but we're not going to have good outcomes. So with that, those from DSI staying within our seven minutes. And if there's any questions, we will be around for those. Thank you so much for your time.

Thanks so much, Mr. Angelic. Any questions on the DSI side? Ms. Kim.

One question came up a while ago when we had a really bad storm that ran through Como and the use of generators overnight. And if there's any consideration that DSI might have given sort of like an emergency, like, you know, there was a storm very recently I think that went through Highland and families that have loss of power, would there be any considerations for, you know, generators or what are the things that cut trees? Chainsaws? Chainsaws. Chainsaws to help. Thank you. Is there any consideration under sort of like, not an emergency order, but an emergency situation for generators to run overnight and have, like, because it's a motorized...

Councilmember Kim, Council President, there is a, and I can, when I come back up later with answer more questions, I'll come up with the actual language, but there is for public safety reasons, there can be emergency situations. So, you know, you think about sirens, you think about that. So there is that provision for us to do that. In immediate situation, if it's going to be longer term, we'd come back to yourselves for a song level variance. But in the short term, if there is emergency situation, there is provision within code to allow that.

And that's not just for city staff, but also for residents?

It would be more city staff directed at this point in time. It's one of those things where we would use the reasonableness. I think that's where St. Paul PD is. Somebody's got a tree on their car at 1 a.m. in the morning. I think everybody in the neighborhood would consider that reasonable to take it down and deal with that issue. But that's sort of that case-by-case. But clearly from a city standpoint, that provision. And after that, it's going to be coming down to a case-by-case.

That sounds good. Just a follow-up if I may, Council President. I think I'm curious then around, like, what are some of the maybe emergency provisions we could allow for residents? Like, I think about folks that have medications inside of their refrigerators and power is necessary. And if, you know, heaven forbid, the electrical, the energy company doesn't do it, not in a timely manner, but to the best of their ability, not in a timely manner. I just would be interested in sort of what flexibility residents may have under this.

So just a curiosity. Council Member Kim, Council President, and that's a really good point. And it really points out the need for updating the ordinance language because a lot of that stuff wasn't really much of a consideration. Now it's a reality that we can use on a regular basis. And so how do we think about that in terms of livability of our communities and supporting people in that? So very good questions.

Thank you. It's a great segue to enforcement. So thank you, Ms. Kim. I will welcome up Downtown Commander Eric Kammerer to let us know how this ordinance is currently enforced. Welcome up. Would you mind pulling the right microphone down to be level with the left one? Thank you so much. Absolutely. You bother me all morning.

Fair enough. Good morning, council president, council members. I'm here to just quickly talk about how enforcement is currently done regarding the noise ordinances here in the city. When noise complaints come into the city, there's generally two mechanisms that the city receives these complaints. The first one would be through the DSI complaint line. That's a phone number that individuals can call or fill on an online complaint. regarding complaints that are typically more ongoing or deal with more of a commercial type And then there's the 911 system or the non-emergency system through which we get our dispatch calls. Typically, those are the ones that we deal with. DSI sometimes informs us of other issues with our liaison that we have with DSI. They'll talk to us, and if there's a specific building or retail establishment or commercial establishment that they're seeing a lot of problems with, they might engage us to help find corrective behavior there. Regarding the calls that come into our dispatch center, when calls come into the dispatch, they're given a priority number. So priority two, three, four, and five are typically the ones we deal with. Number two are your in-progress crimes, your high priority. Someone's being assaulted, there's something emergent going on. Priority threes are kind of a little bit of the lesser crimes, not currently in progress. burglaries that have already happened that you just need to come and take the report, things like that. Priority four is where you're going to find your noise complaints and other issues that are kind of more of your quality of life type crimes. So when we get a noise complaint, it's going to be 99.999% of the time it's going to be given a priority four response. so that means as officers are going to these calls they take those calls in that priority twos are coming first threes are coming forth so we get to the fours being that there are four sometimes when people call they don't get a response right away because officers are busy dealing with the other calls and sometimes that can cause some concern with uh with residents and business owners because it takes so long to deal with an issue but to give you some awareness that those types of calls would come last as we triage our calls When it comes to the call, we'll go to the call. We'll assess the situation. Again, what is reasonable to a reasonable person? Is it loud? Is it too loud? Is it okay? But we'll look to do what the chief says. It's talking about engaging with the people, whether it's a business owner, whether it's a resident in an apartment building downtown. some other type of retail or commercial establishment. We'll engage with them, educate them on what the city ordinance is and what's allowed and what's not allowed, and then we'll move to encourage them to comply with that. A lot of times just those simple three steps gets the job done, and sometimes if it doesn't get the job done, we move to that fourth, which is the enforcement piece of it. When it comes to the commercial and retail type stuff, often it's just an informational report that we'll take and we'll send it off to DSI for them to follow up with. The Deputy Director talked about how they'll look at potentially administrative sanctions or licensing sanctions if it's a continued issue there. Otherwise, we deal with it then and there if we can. When it comes to the actual slide where the deputy director had the 80 decibel level, we do have a sound reader, sound meter, and we only have one in the district. It's not something that the officers typically go out there with. So there's some, it's not as easy for us to enforce some of that stuff because we don't have a sound meter readily available to officers in the immediacy of that particular type of call. If it's something like a planned event that we know, we can have that at the available and at the ready. so that we can take sound readings if need be to make sure that the event is in compliance. That about sums it up. I'm going to save you some time for other presenters unless there's questions.

Thank you, Commander. One of the questions that we get often, I think you touched on it, but just to make sure, is the DSI information and complaint line 266-8989, or our version of 311 is our joke. That's only during... operating hours. So is it the case that outside of business hours, if someone calls 911 or the non-emergency number, their police can respond even when DSI inspectors are not available to something like a sound level variance?

Yes, so long as that they do call the non-emergency number or 911 and we get a call dispatch. There's some anecdotal stories out there that when someone calls, they say, well, sorry, we don't have an officer available. And the resident or whosoever calling takes that to believe, well, no one's going to come to this then. Is that what you're talking? That's not the case. Dispatch will always create the call. It's just there's nobody available at that time to take that call, and it may take some time for officers to respond to that particular noise complaint.

And I appreciate your point about the triage of priority when 911 calls come in, because I do think people are very reticent to call 911 for something like a sound issue. Worrying that it might take attention away from something more important and knowing that that won't be the case, I think, is reassuring to people. So thank you. Other questions on enforcement before we hear from our last speakers who have some ideas on community engagement they've done about possible changes. Ms. Bowie.

Thank you, Council President. Thank you so much. I just have a question particularly around just like the scope. I know this is the focus particularly for downtown. Is there anything unique particularly around our sound level variance that is relative to downtown? Is there like like once you're outside of the downtown district, is there like a change of response or a change in terms of what level we're actually checking for?

Are you speaking from a, thank you for the question, are you speaking from an enforcement perspective or just from like the sound level that's allowed?

Yeah, enforcement and if there's anything in our, I don't believe there's anything in our ordinance that pertains to just downtown.

No, the only difference would be the decibel level, the amount that's allowed in a particular area and that's zoned accordingly throughout the city. But regarding police response, they're all handled the same, whether it's in the downtown area or whether it's outside in a more residential area. And what plays into that is just the amount of officers that are assigned to a particular area.

All right. Doesn't look like we have other questions. Stick around. Don't go far. Thank you so much. Thank you. And with that, our last speakers on this topic, I'll welcome up the leadership of the Capitol River Council. I'll let you introduce yourselves. And thank you so much for being here and for the work you've done to this point.

Yeah, thanks for the opportunity, Council President Naker and members. My name is John Fury. Sorry. And I'm here with Amy Lee. We're co-executive directors for the Capital River Council, CRC. I've been working here since January of 2017. And for most of the time, I was the only full-time employee. Amy started attending our Skyway Governance Advisory Committee and then became a board member in 2017. And she served several non-consecutive terms as a board member. And she's always continued to be an ambassador. And so... You know, I requested some unpaid time off, and so we hired her on a part-time basis. And then we asked the board to make us co-executive directors just to reflect the work that she had already been doing and so that we can continue to benefit from the value that she offers. She's a great resource for information and as an advocate for downtown residents and businesses. So we both have a passion for community engagement because people should be able to influence government decisions that affect them. So I'm going to turn it over to Amy.

Thank you. When we were asked to coordinate community engagement on this topic of noise complaints, we started having conversations with people at committee meetings and a meeting in other settings in community. We often engage people by meeting them where they are at and asking what they think about specific topics like this one or asking about livability in general. We have about 460 people who subscribe to our emails, and we've sent requests like this one to the audience. Between the two of us, we have had conversations with over 150 people on different topics such as this one since we've been asked to speak with community members starting in February. There are other groups that have been having discussions about this and related topics also, like the Fitzgerald Neighborhood Alliance, the group that first started advocating for more enforcement on noise-level violations and to establish quiet hours that are more like the ones in the residential neighborhoods. The Downtown Alliance of St. St. Paul and Friends of Iskari are also actively engaging downtown residents in discussions and livability also. Our initial engagement strategy was to focus on one-on-one relationship building. Throughout our organization's history, we have formed committees to serve as a primary way for community to engage and help us with strategies. But we are changing that because we have found that many people don't feel welcome to participate in small groups or in meetings that are often in inconvenient times. As a contracted vendor for the city, our contract states that we should lead with equity, and it is important that we do this to make sure that we are engaging people who reflect the diversity of our downtown, and not just the people who are regularly attending meetings and in our communities. In conversations and in surveys that we have sent to people in our database, we wanted to find out if there was a strong support for more strict enforcement of noise-related complaints, or if the city ordinance should be changed to have quiet hours for downtown. We didn't find that there is a consensus on that. Of the people who we spoke to and surveyed, 32% said that they thought it was not a concern at all. 16% categorized this as low priority. 13% said it was high, and 37% said it was medium. As I've mentioned, we share the value of leading with equity, so we wouldn't make a recommendation strictly based on what we heard or learned based off the majority of votes or feedback. But in the feedback that we received, most people are conflicted. We've heard and we have always heard from people who say that they like living downtown partly because of all the activities, including some that are late night. We also hear from people who say they need to be able to sleep. So obviously we understand this is kind of polarized. We also asked about events and received amplified sound permanence or sound level variance, and we did find that some residents were confused about the difference, so thank you for sharing about the difference today, and we'll definitely disseminate that information to the community. And we've also followed up with how can we help them understand the process once a complaint has been filed. Specific complaints include garbage trucks, especially going in reverse, loud vehicles, maybe because the mufflers need to be replaced or because some vehicles are modified to be louder. People talking loudly after leaving a bar or restaurant. Sometimes people have an altercation where there is yelling and sometimes it escalates to violence. And some complaints about outdoor concerts where the noise level doesn't always seem to follow the guidelines via the permit. One example of comments that we're building is that people like the idea of having more strict enforcement of sound levels, late at night, but the thought snow removal should also be an exception. And back to John.

So another thing we found is that a lot of people did express concerns about enforcement being done in ways that could be racially biased. So almost half of the people we talked to said that they were concerned about that. And I feel like we heard a lot about that when the charter commission was getting public input on the proposal to give the city more authority to issue administrative citations. That concern was raised pretty frequently, too. A lot of people who are engaged in our work are concerned about that, that people with low household incomes or people of color or other groups could be targeted with more strict enforcement of sound level violations. A concern was also raised by someone who works a non-traditional schedule and wouldn't want to face punishment, for example, for grinding coffee beans or vacuuming late at night. We do think that there are some ways that we could work with the city and other organizations to address the specific issues that were raised. I'm glad we've been talking about the garbage trucks and things like that, and maybe there is some more coordination that could be done. I do think that probably is above the sound level limit for downtown, so I think we could have some more conversations about that. And I think... Yeah, I know it would be difficult to really coordinate trash removal, but there could be some tremendous benefits for that. As far as noise from bars and restaurants or late night events, The current ordinance, again, does seem to have the potential to enforce those kind of complaints, so it's possible that there could be more of a public information campaign that could help downtown residents understand the current regulations and what to do if they want to make a complaint and how to find out what enforcement actions were taken, if any. So I understand we don't have a real clear recommendation for something to change, but like I said, the engagement that we've found has been that people are really conflicted about this. But yeah, I thank you for the opportunity to talk a little about our work.

Thank you both so much, and thank you for your leadership on this and your hard work to do this engagement. I think if people are conflicted about something, that probably means you did the engagement right, because there are very few issues. We're about to talk about one that people are not conflicted about. So I think I'm hearing, and I want to open it up to colleagues, I think this question about, first of all, concern about equitable enforcement is heard loud and clear, and I think it was really important to have information about enforcement here today, but also have someone in charge of enforcement here today to listen, so that's important. And I'm also hearing this tension of vibrancy and residential life. We want to attract 20,000 people to live downtown, and people living downtown want a certain level of vibrancy, and they also want to be able to sleep. So I'm wondering if you, I know you don't have any formal recommendations today, but as you were talking to people about that, did you hear any consensus around possible ways to square that circle? For example, I was hearing you talk about the difference between garbage pickup and maybe construction noise, which is a kind of noise that maybe isn't necessarily vibrancy, versus bars, restaurants, events. Are there pieces that are maybe there's more consensus there versus others? And maybe you could say more about

any any agreement that you heard or any thoughts on that great question um unfortunately it's still very polarized i mean i think it depends too on folks who have an expectation living downtown for a long time versus kind of like the new group of people who've been more i would say the last 10 years and so i think there's a huge difference if you just look at the folks who've been living here for a long time it's very clear that they're like we want stricter rules and for people who are more recent it's a little bit more polarized because they haven't experienced the dynamic of living downtown, and so they haven't really formed a consensus as new residents.

I guess one, I did talk to somebody who lives near Pedro Park, and of course that's a newly established park, and the concerts are relatively new there. And so I do wonder if there could be some maybe testing to see if maybe the speakers can be pointed in a different direction or something like that, or if there is some more clarity that's needed for people in that venue specifically to address some of those concerns. And like I said, it's not the... I mean, I do think probably the majority do say, yeah, let's have more events and things like that. But I don't think that we, it's not leading with equity to sort of dismiss concerns, even if they are in the minority. So I do think that that would be warranted as some more testing. In particular, I think some of the concerts in Rice Park and Mears Park have been going on for longer, and I think they have kind of figured some of those things out, but and you know the the garbage trucks do I mean I think in my neighborhood they always They don't have to back back up. They just drive straight through the alley and so I you know on a personal note I you know I live on the east side But I do sympathize with downtown residents where it just could be every every day of the week. They could have Garbage trucks and so like I said, I think a little more coordination It's it would be difficult, but I think that's something that should be explored.

Thank you Other questions from my colleagues? Or thoughts on what you've heard? I'd love to hear. Are there any initial reactions or responses? I see Ms. Coleman and then Ms. Bowie.

Thank you, and thanks so much for this overview of the community outreach. I think this is a really informative presentation. I'm thinking about this both from what we've heard today and also as a former downtown resident and thinking about sort of what draws folks to live downtown and also what are the annoyances of living downtown, specifically having a really intense flashback to a car alarm going off for like six hours one night, which I will never, ever forget. But I think what I'm hearing from this and from the broad array of opinions that have been expressed and thinking about who lives downtown and the equity concerns that have been raised, it just seems to me that this is a place where thinking more with a scalpel is beneficial to us rather than thinking about firm, quiet hours or, you know, downtown is a very unique place. We really want to be encouraging barbancy downtown. But, yeah, having garbage trucks backing up at 2 a.m. is a distinct annoyance that feels like something that we should deal with uniquely and thinking about places where, you know, there are newly concerts happening and new levels of noise happening and what are the best practices there and how do we make sure that we get that balance right. It just seems to me that this is a place where, unfortunately, because it's harder for policymaking, but... we would benefit from being very intentional and looking at individual issues rather than broad policy that might require significant carve-outs. And that just seems like, at the end of the day, the specific challenges are real, and we should address them but not create new challenges for ourselves, especially when we're thinking about how do we revitalize our downtown. Thanks, Ms. Coleman. I appreciate that. Ms. Bowie.

Thank you, Council President. Thank you so much for giving this really great presentation. Sometimes when we do engagement or surveys, we don't really hear it, so I'm really fortunate to be able to see kind of the results and just talk about the nuance. I have just thoughts. I don't really have questions, but I just kind of have thoughts that I wanted to share particularly. I'm just curious around... just how this is in alignment with the Downtown Alliance and their goals to activate our downtown. And I'm sure that falls within the realm of making downtown lively, and events, and vibrancy, and bringing people downtown, and the excitement that comes with it as well. I'm also just thinking, too, as well, as we're exploring this policy, know what is the volume of new development and new residents that's going to be coming and like what are like the type of like clear uh whether it's like soft policy or like signage or like rules or property management um that is just in um coordinated you know with our city laws And also, too, similar to Councilmember Coleman's points, I think about if someone's choosing to be downtown, there's a reason, right? But then in terms of the questions around equity, sometimes there isn't a choice to live downtown. I think about we have... several shelters downtown. We have several deeply, deeply, deeply affordable housing. So sometimes it's not always a choice. And also making sure that we're marrying those things and taking those things into consideration. I would also like to, as we're just approaching this conversation, learn more about just like what the coordination is. And I think that's one of the highlights that came out of the recommendation and how, thank you so much, and how our downtown improvement district is integrated into, our downtown ambassadors is integrated into our police force, just because, you know, I guess like the lack of... terms. I don't know if it's a good use of city resources to have sound police. As we're exploring what is the best use of our law enforcement and going to certain sites where there is a noise complaint. I just think that would just probably be a better use of resources somewhere else in terms of, I don't know if a sworn officer has to handle those things. And I think that should just be on the table as we're considering what does enforcement look like, and then what type of tools do we use, what type of levers do we use to ensure that the sound that we are trying to mitigate has the proper person there. But yeah, no questions at all. But I just want to say thank you for your engagement. As a council member that borders with downtown, I would love to have policies and investments that allow for more vibrancy. Of course, making sure that we're prioritizing safety. top recommendation. But I just would love to see our community ambassadors more in this space.

Thanks, Ms. Bowie.

I really appreciate these thoughts.

They helped me think about how to maybe take this conversation forward and follow up with all of you. So appreciate it. Let's do one last question from Ms. Johnson, and then I want to make sure we have plenty of time for our second topic.

Or comment.

Sorry.

I don't necessarily have a question per se. I was able to watch this as well live, which I encourage folks to continue to do as a way to continue to be caught up to the conversation. But a quick comment that I'll just share is I often am a voice of thinking about who we're building our downtown for over the next, people have heard me say, I think that if people were having this discussion when they had some of the design of downtown and the implementation of downtown and what was being built downtown and who owned downtown conversations, and they thought about it 40 years, 50 years, 60 years in the future, that question changes tremendously. And so I just would encourage us here as well regarding like, ordinances and ways to help and I think also just increase the vitality of downtown, this would not be on the top of my list. And so I'll just share just from the conversations, even from the mixed reviews of community members, to me that shares not necessarily a lack of urgency, but definitely a need for additional communication before a direct definitive step is taken. And I think that's kind of what I heard from your presentation today and even just some of the feedback from the response from folks often when there's that level of, right, if we bring a topic and it has multiple levels of discussion and multiple differences of opinion, making it a definitive choice at the time may not necessarily be the high priority because it clearly needs more discussion. You know, I would just also add, you know, Council Member Bowie, I completely agree with a lot of her sentiments around the choice to live downtown, inclusive of the large amount of housing choice vouchers and project-based vouchers, residents that are holding those have that they genuinely, it's what's available that they are kind of become residents of downtown St. Paul. But also when we think about what downtown St. Paul needs to look like, I don't necessarily know if that, if the noise or quiet hours piece aligns with what I'm thinking, but I definitely just would add the need to continue to think about what we are what we need to have downtown, what the types of, I'm going to say vibes, for lack of a better word. But truly, who are we building downtown for? And also thinking and keeping in mind what we want downtown to look like 20 years, 30 years, 40 years from now. I would not share that. I'm hoping that that's not necessarily a dead zone. I'd really love to see some of that vitality come to fruition. in different ways, obviously ways that are appropriate. But this one, this conversation kind of changes some of the conversations I think about, like the breakaway festival conversations and how at that time we were talking about the sound level variants in this body was very supportive of a pretty high level of sound at different times in one community. And so thinking about like how that's appropriate necessarily on Snelling and University, but not necessarily here, seems a little bit out of conflict with my values. So I just would share like that piece as an example as somebody who voted against the sound level variants for the Breakaway Festival in its second year because of noise. So just thinking about how we consider noise and where it's appropriate and where it's not, the aspect of prioritizing that to me just seems a little bit out of conflict, in conflict with where I'd love to see this conversation regarding downtown's vitality go.

Thank you so much, Ms. Johnson. Really appreciate everyone's comments. Again, sounds like there are a lot of different considerations we need to balance. Downtown is clearly an outlier in lots of ways, both in terms of the sound ordinance and in terms of what people expect from it, which are lots of different things. So this is helpful, and we'll continue the conversation later. Thank you so much for being here and for your work. With that, we will softly pivot to our next topic. In introducing this topic and in welcoming up our speakers from CURE to get started and get their PowerPoint set up, I will just say this is an issue that we have been hearing a lot about I really am proud of our St. Paul City Council for learning about issues first and making policy on issues second. And the goal of today is to do just that, to have hopefully a very nuanced and balanced conversation and hear from two different parties formally. And then we have lots of other parties who have submitted testimony or who are also here and who can be asked questions of to just inform us about this very new and important topic. And with that, I want to really thank Councilmember Kim, who has taken the lead on coordinating today's policy session, to formally introduce the topic and our speakers.

Thank you. Yeah. Well, we welcome Sarah and Sarah to give us a presentation around data centers. And I do just want to, I think, echo and reiterate what our council president said. Originally, this policy committee was going to have three topics, which made it very packed. And we have now rescheduled one of them. And so actually, we have a little bit more time, but we still would like to stick to schedule as much as possible to give my colleagues a break. But it's just to name that one of the greatest limitations of this topic is the timing that we had to bring it forward to council. So I see stakeholders that my office has met with. stakeholders that we will be meeting with in the future. There's labor in the room. There's energy folks in the room. And so this is a great but incomplete start to a broader conversation that the council is going to embark on around data centers. So I just want to thank everyone for attending and joining the topic and just recognizing that Time was the limitation more than anything, and it doesn't mean that this is the only information that is provided to my colleagues. There's additional packets of information that were added as the attachment to this presentation, and my office will continue to help facilitate ensuring that my colleagues have all the information and a full picture. to help make policy decisions moving forward. So I really appreciate the time. Thank you so much for coming. Please, I introduced you as Sarah, and Sarah, please introduce yourselves more accordingly, and thanks for coming today.

Absolutely.

You should be able to stand in between them and not lean over and not adjust them, and they should pick you up just fine.

There you go. Thank you so much. Wonderful to see you all, council members of council. My name is Sarah Moradian. I'm the Government Relations and Policy Director for CURE, and this is my colleague Sarah Wolf. I don't know if you... Okay, great. So we'll try and be quick. Yes, really appreciate you having us here today, but we really encourage all of you to continue learning. We're certainly not the only voices on this. So we will get started. So just a quick overview of who CURE is. You probably may not have heard of us. So we're a really based nonprofit dedicated to protecting and restoring resilient communities. communities and places by harnessing the power of the people who care about those places. And just a fun disclaimer, obviously this information is not intended as legal advice. So data centers touch pretty much every aspect of our lives. I don't need to tell anybody in this room that, I don't think. But I wanted to just quickly lay some groundwork, be really clear up front, data centers aren't new. We have had them for decades. The types of data centers that we're seeing coming up right now is what's new. So we have just kind of general, very broad categories of the types and functions of data centers. So what's kind of been here historically are more of enterprise data centers. They're usually on premises, but not always. So you've got some here in St. Paul, often owned and operated by the entity that's using the data or storing the data. So Securian Financial, the state of Minnesota, those are great examples. Generally lower megawatt usage, electricity usage, but not always. And then we've got managed data centers or co-locations. So that's usually multiple tenants in one building or one area, kind of. And so those, again, those exist here. Got some examples there. again, tend to be a little bit smaller in terms of how much energy they're using. What we're seeing now, what's new, and what CURE has been focused on in the past two years is really hyperscale data centers. And so we're defining that, lots of folks generally define that, and state statute in the energy provisions defines that as being over 100 megawatts of power. And so the one that's kind of a classic example is the metadata center down in Rosemont. Under construction right now, gonna be done soon I believe, over 100 megawatts of power. And then another kind of element is cryptocurrency. CURE's not necessarily focusing on that, but just noting that that is another type of kind of data center facility that can use more power than say kind of our traditional data centers that we've seen here historically. So again, they've existed for a while. We have at least 60 enterprise and co-location types already in the state. We gave you some examples. But there are at least 12, kind of depends on the news outlets that I've heard, what the number actually is of hyperscale data centers that are proposed. And we've just listed a couple of them with end users, if known, there. And then there's a rendering of the meta-facility down in Rosemont. And then here's just a map to kind of help folks visualize where they are. A lot of them are kind of in the southeast metro area, but of course there are other ones popping up. Kind of depends on where transmission lines are, where land might be available, where cities are particularly open to encouraging of this kind of development. So why does it matter? They can consume vital shared resources, energy, water, land. And most, maybe not concerningly, but what we're really seeing at CURE and statewide is that these proposals and developments are happening at really fast speeds. And we don't have necessarily things in place at the state level and maybe not at the local level to fully understand what's coming at us. Data centers are expected to be a significant chunk of U.S. energy consumption based on historically what they've used in the future. And then U.S. is already a significant leader worldwide in data centers, particularly in Virginia. So wanting to kind of talk through some of the elements that we're considering in terms of where maybe potential issue areas. So communities, we're hearing a lot from folks on the ground, grassroots organizations, about what they're concerned about is siting. So this is a very small image, apologies. But you've kind of got here on the right in this checkered is a proposed development from Tract down in Farmington. And then over here, just a little bit to the left, is where folks already live. So the folks here are not super thrilled generally about the kind of distance here. So there's a question about sighting. There's a question about noise. And I should have prefaced all of this, sorry, by saying again, CURE has been focused on hyperscale data centers. A lot of this information is more focused on that. But I do think that these things are kind of general concerns, general questions to be asked about any type of data center. But really that's what we've been focusing on. Light might be a concern. How often is it being lit up? Is it 24-7? Is it only at night? For how long? What kind of lighting is there? Obviously, transparency has been a huge concern for folks locally. Are nondisclosure agreements being signed by elected officials or staff? Are folks getting the opportunity or feeling like they're getting the opportunity to weigh in early enough, often enough, in an authentic way? And then obviously, of course, electricity and water, which we'll talk about in a minute. So the big questions here are kind of who decides who's benefiting? Are there opportunities for engagement? Is the permitting or any type of decision making happening at the community level or is it happening elsewhere? And then community benefit agreements. And I just want to be clear that when we're saying that, we don't mean like a soccer field. We're talking about like real legally enforceable discussions, commitments between a developer or an end user and then the community that is created with the community, not just kind of delivered to the community in a press release. And I will turn it over to Sarah now.

Welcome. Thank you so much for this invitation to talk about this issue that we've been thinking about so much for the past couple of years. My name is Sarah Wolf, and I work with CURE. And I've particularly been looking at some of the energy pieces that come along with the data center use. So we know that they have a massive, hyperscale data centers need a lot of electricity. And so when we're talking about, just for perspective, 100 megawatts, what does that mean? 100 megawatts might generally serve about the electricity needs of about 75,000 homes. And we're seeing some of the data centers are many multiples of 100 megawatts. So it needs a lot of electricity. Unless the facilities are using new, clean, energy for both their regular power needs and any backup power needs they have, it's likely that those loads will increase emissions. And that is what we are seeing from data centers in other states. Last week there was some reporting coming out from sustainability reports by various tech industries about emissions going up and that being driven by data centers. And so it's just important to note that these companies can be well-intentioned and have plans for completely clean portfolios coming up in the future, whether that's 2030 or 2040. But in the meantime, the vast majority of data centers around the country are using natural gas, building new natural gas, and that is having an increase in emissions. This slide just offers three broad categories of questions to be looking at as communities and policy makers are looking at data centers. And I'm gonna truncate this a little bit, but the first category is climate and air pollution. The second might be around grid strain and reliability. And the third is costs to rate payers and local government. In relation to these three energy consideration categories, we want to outline what we feel, what CURE feels we need to have to be responsible on climate and good neighbors to communities. And I want to emphasize that these things in isolation don't make a project qualify as good or bad, but they are things that we feel should be a baseline for data centers in order to prevent harm. And that first thing is that hyperscale data centers should be required to use 100% new clean energy from the start. Promises to comply with future goals or state mandates are not sufficient to prevent climate harm if they are adding emissions now. And so I worry about talking points that suggest to build in Minnesota is an environmentally friendly move because we have a state statute, the carbon-free statute, that in 14 years requires 100% carbon-free electricity. Because, of course, the goal, meeting a goal is not the point, but it is preventing the climate harm that is the point. And that means new loads should be served with new renewable energy. renewables, solar, wind, plus battery resources, not diverted from what was in development for the clean energy transition we need across every category of use, but for that purpose of the data center. A second category, because it's not just about electricity production, but it's also about resilience of our grid. And if we're adding new load from a data center, yes, We can add new transmission lines. New transmission lines can be built to increase grid capacity. But another option is that we can make localized improvements that benefit families and taxpayers while also shoring up resilience of the grid. So a quick example is replacing an inefficient electric resistance heating unit or an air conditioner with a high efficiency heat pump. save significant electricity and done at a scale that can have meaningful impacts for the resilience of the grid. Home batteries are another example. This final slide, I'm just going to whiz through, but it's suggesting there are some questions for considering the prevention of stranded assets for a community. So I'm going to move back over to Sarah for discussion of water issues.

We have a little over six minutes left for the presentation.

Yes, perfect. I love the timer over here. Appreciate that. We'll keep it moving. Thank you. So water is another concern. There is limited reporting on data center water use, both at the individual level and then kind of nationally or even regionally. So that's kind of, it complicates how we're thinking about how we're asking questions about water use about data centers generally. But in general, very broad generalization, the amount of water that a data center is using is gonna depend a lot on the cooling system that is used. So this is a very busy graphic on the right, but it's just trying to show you kind of within each of those shapes are dots about what kind of energy is being used and what kind of water is being used for those different cooling types. And so even within a type of cooling system, so air side economizer, there can be a wide range of how much water is being used, what the water use efficiency is, what the power use efficiency is. And so it's important to know that and to think about that. Not every single system is going to be the same in terms of water use. And then it also depends on the system boundary. And what I mean by that is, are you considering only the direct use, on-site water use? Or are you also including off-site use, indirect use from power? Because water can be, of course, used up in the production of electricity. So and then particularly of importance at the local level is understanding, getting clarity about where the water is coming from. Is it coming from a municipal source? Is it coming from a private well? Is it being recycled? Is there a beneficial reuse of wastewater somewhere happening? So it just is really critical to get pricing, use or resource questions answered, and then communicating about whether there's infrastructure needs, who's paying for those upfront, who's paying for them after a data center might leave. All of those are questions that need to be considered at the local level. And then finally, wastewater. I would actually really encourage you guys, everybody, to talk to the Met Council about this. They have some interesting, they've been thinking about that for sure, I know, about wastewater and data centers. And they've kind of mentioned in other public settings potential concerns about the amount of water that might be being discharged and whether a system might need upgrades to meet kind of that new inflow of water. And then again, just the questions, do we have adequate resources? Who's getting priority when water is scarce? How much should extra large users be paying? Who's paying for the upgraded assets? Again, upfront and after a data center leaves. And then what reporting metrics are required or what might be appropriate? These are pretty much just reiterating what I just said. Important to understand what the needs are, what the impacts are, who's paying for what. And making sure that the best use of the water is being considered and required.

There are, of course, a number of economic considerations that communities consider when looking at data center proposals. And so we'll just note quickly some things that I'm sure you've heard. But the jobs consideration, and there are a lot of construction jobs, and not as many by a lot of operational jobs. There's a discussion about property taxes and value from these projects there. There's also a discussion about the sales tax exemptions that have been in place since 2011 that Minnesota put, when data centers put in place the sales tax for the hardware, software operation of data centers, And that was extended in the 25 Minnesota legislative session. There was also in that session a fee that was placed on data centers of a certain size that will be up to $5 million annual fee into a weatherization fund. We're finding those numbers are meaningful for weatherization, but they're not in any way kind of an adjustment for the sales tax exemptions that are being experienced. And we're finding states having a real reckoning with the amount of those sales tax charges was over $2 billion in sales tax exemptions this past year. So it depends on a lot of things, of course. Those are some economic considerations. We love that you're engaging in this discussion because it really is a community-level discussion where a lot of good protections and measures that communities need to think about can be discussed. Federal support is unlikely to result in protection soon. New state protections are being proposed, but prospects are uncertain. And so local areas are having the best success in determining outcomes for their own cities. And in Minnesota, we've had a number of cities, Minneapolis, Carver, Eagan, Rosemont, are using moratoriums for a chance to study these data centers and what kinds of ordinances, zoning, utility agreements they might be interested in. Other cities have taken other measures And I think potential actions, you might know these best, but using ordinances, zoning utility agreements for siting and zoning, noise light, conditional use permits, financial assurances, clean energy requirements, water use requirements, process requirements, those things. And these slides have other questions to consider. So I think we'll leave it there with not very much time for questions, but certainly happy to answer anything and see if we can find other information for you if we need to.

Thank you both so much. I think what we'll do is have our next presenter come up. have their presentation, and then have sort of a bulk question so that we can take into account what you've said, what they say. I also want to acknowledge, echo Councilmember Kim's acknowledgment as our next speakers come up, that we have folks here from Xcel Energy, from the Carpenters Union, from Ames Construction, from District Evergreen Energy, from Sustain St. Paul, among others. So again, thank you for being here. I want to let my colleagues know that, because again, if you have questions for any of the folks in the audience, I think they're all welcome to be put on the spot. at any moment to answer questions. So welcome up. And let's set the timer jacket for 10 so that we have time for questions.

Hi, good morning. Michael LaHerne with Evergreen Energy. I'm senior vice president of our engineering and development side of our business. Just for those of you who may not know, or just to remind you, District Energy St. Paul is our parent company. District of St. Paul is a local thermal utility that heats and cools the bulk of downtown St. Paul. We serve roughly 500 buildings in downtown, providing both heating and cooling services to the majority of those buildings. Evergreen is a wholly owned subsidiary of District Energy St. Paul. We are a mission-based organization focused on the advancement of sustainable energy systems across the country. We operate and manage 14 different energy and utility businesses around the country. We also help communities and campuses and cities and states develop new systems or take existing systems and advance them with advancement often meaning decarbonization, efficiency improvement, growth to serve other buildings. I can tell you that the data center discussion and much of what Sarah and Sarah talked through in the previous conversation is definitely at the heart of what we're talking about in our industry. Just last week, or two weeks ago, we were up in Ottawa at our International District Energy Association conference. spearheaded data center workshop to talk about a lot of the challenges that Sarah and Sarah mentioned, but also how district energy can bring solutions to the table. I think we all can acknowledge the utilization of technology is not slowing down. The need for data centers is not slowing down. And we can be a solution. We can help do data centers better than they might otherwise be done. So as Sarah and Sarah touched on, not all data centers are the same. Today, our system serves not only in St. Paul here, but around the country. We serve multiple data centers down in that smaller scale, 70 kilowatt, 100 kilowatt, 1 megawatt types of data centers. But a lot of what's in the general public right now is being discussed around the large 100 megawatt plus hyperscale centers, as well as that urban infill data center. And I think for purposes of the conversation here today, our focus would really, we would highly suggest a focus in that urban infill data center realm and that one to 50 megawatt data center that can fit within existing building stock that's within this community and can be really a tremendous value for the city of St. Paul. What we are a strong advocate of is data centers are going to be done. District Energy can help data centers be done better. For every megawatt of electricity that is supplied to the center, we can pull 100% of that heat off of that center to serve our district energy system. At District Energy St. Paul, we have a tremendous network of underground pipes that interconnect the bulk of the buildings in St. Paul. all of that heat that we can capture from an existing data or from a new data center can be put into our hot water system and displace natural gas combustion. So as you see broadly, and John with Xcel Energy is here, as you see broadly, there's this push toward electrification, toward the elimination of gas combustion for purposes of heating buildings. That's a push toward electrification in general. If we're gonna take that megawatt to generate heat, let's first use it to power a data center, and then we'll take the waste off of that to heat our hot water systems that are gonna be able to heat these buildings. we're doing it anyway you're utilizing that electricity anyway let's be smarter about how we utilize it and we already have the backbone of infrastructure in st paul to be able to do that intelligently In St. Paul specifically, we will need to use the heat pumps. Sarah and Sarah referred to heat pump utilization. We will need to use heat pumps to be able to get to the temperatures that we need to operate in St. Paul. There are other examples of systems we're developing around the country where we're able to take that heat and actually utilize it in its existing form when it comes off the center. Unfortunately in St. Paul, we do need to leverage heat pump technology that continues to advance to be able to supply the temperatures that are needed in the buildings here in St. Paul. Again, we have a very unique advantage here. We already have a very sustainable, one of the most sustainable district energy systems in North America here in St. Paul with combined heat and power, biomass as a primary fuel source, thermal storage. We have over 7 million gallons of thermal storage in town. We're building another 2 million gallons of thermal storage on the north side of town right now. We have the largest solar thermal array connected to a district energy system. Integrating waste heat capture from a 20 megawatt or a 30 megawatt data center would be just that next step of advancement. Continue to shine the light on St. Paul as being an industry leader for district energy and the co-location of boutique level data centers with district energy infrastructure. And the benefits of that are tremendous. From a grid reliability perspective, from a rate stability, continuing to take, bringing that waste heat in, displacing natural gas combustion is just going to make our heating rate more cost effective. continues to lower emissions of the District Energy St. Paul system, which has a goal of becoming carbon-free by 2040, and spurring economic development, leveraging utilization of existing building stock that right now is underutilized. These centers can be sized for the power that's available at the buildings that are in downtown. They can be sized to, when you're talking about a two to 50 megawatt data center, they definitely can fit within the existing building stock. And the great thing about the benefit that District Energy St. Paul brings to the table is our network is all around the downtown area. So we can be agnostic to the developers. We can be agnostic to the exact location. we can offer the flexibility to multiple developers, multiple entities looking at potentially bringing a data center into downtown and to help identify what might be the best based on a number of variables, not just whether or not our pipe comes to that individual building. The other comment I would just mention based on what Sarah and Sarah had mentioned from CURE, Capturing that waste energy with the advancements that are being made within the data center industry, most of the cooling coming off of those facilities is non-water consumptive at this point. They're consuming more water in their toilets and their restrooms than they're actually consuming through the cooling process. Bringing in the waste heat capture as the means of pulling that heat off of those centers just takes that additional step to make it a non-consumptive facility. process from a water perspective. So a lot of good reasons for looking to co-locate data centers next to district energy systems. There's, I believe it's nine states now around the country who have established some level of policy around at least investigating the co-location of data centers with district energy systems. I think it would be a fantastic set for the city to start to consider how you could be incentivizing that evaluation in the downtown area as well. Thank you.

Great. Well, thank you so much. This is great because now we have a good 17 minutes for questions and discussion. I'm going to start us off with one question that I'm really excited to hear what my colleagues have to ask about as well. First of all, just really appreciate both presentations and especially the distinction that you both made between types of data centers. I think that hyperscale versus urban infill categorization is really sticking with me. And I have to imagine in St. Paul, I don't know if you have a ton of 100 to 500 plus acre parcels available, so I'm imagining most of what we're going to be talking about or hearing about is urban infill. I am curious, I hear you saying that district energy is well set up to take that excess heat and that it would actually move district energy off of biomass, fossil fuels, wood burning. I'm curious when you say co-locating, how far can a data center be from you to be able to take advantage of existing infrastructure without having to build more?

So unfortunately, the answer is it depends.

We're used to that. Pardon me?

We're used to that. Yeah. It really, it's depending upon how large the data center is, how much heat we'll be able to pull off of it. The more heat that's available, the further we can go from our existing network. the more we can justify the capital investment to go from our existing network to wherever that building is because we have to put an investment into the underground pipes that are going to be able to pull that heat from that building and get it into our main network. The beneficial portion of District Energy St. Paul is we're essentially, our grid is essentially covering the bulk of downtown and even to some of the adjacent areas where for the majority of the buildings that are being discussed by various developers right now, those are already within our network. And so it would be a relatively low cost connection.

Thank you. I see Ms. Jost.

Thank you, Council President. Thank you, everyone, for the presentation today. I had a similar question. And then I guess it sounds like when we're talking about co-locating with district energy, it sounds like we are focused on the urban infill data center size. And my question is, is there a limitation to how much heat you can capture based on the megawattage of the data center?

It's dependent on a couple of factors. Number one, the grade of the energy. So what's the energy intensity? How significant? What's the temperature of the heat coming off of the facility? And that's a little bit dependent upon the data center's technology. But more importantly, it's really dependent upon the energy load of the buildings that you're talking about connecting. So in St. Paul, we have the largest hot water district energy system in North America here in downtown St. Paul. So of all of the district systems in North America, we have the greatest opportunity to capture the most heat coming off of that data center out of any city in all of North America. You can get into other cities where they have very small district energy systems. We're developing a very small one at the Heights right now on the east side of town. If for some reason there was a data center developed there, the amount of heat you capture is going to be limited by the amount of heat that's needed by those buildings, which are much lower scale than you see here in downtown. That's primarily the driver. And so when you think about the massive facility that's being built down in Rosemount, that facility, we'd love to be able to capture the heat off of that and serve Dakota County Technical College, which is right next door, but beyond DCTC, It's hard to look elsewhere at the moment and find a location for that heat. That's what makes it such a great opportunity here in downtown.

OK.

Thank you. Thanks. I actually am, as my colleagues don't see any, oh, Ms. Yang, and then I have a question for Excel. I'm going to put them on the spot.

Thank you, Council President. I have a question. Maybe we might have to swap between you and then Kir. In Kir's presentation about communities, I was wondering if one of you would be able to speak a bit more about the community benefit agreements. What's an example of a city or maybe even a data center that has been, like your example of a stellar scenario that's been done in real life? It'd be helpful to hear.

Yeah, thank you for that question, Councilmember Yang. So it's my understanding that I think there's one, I can email you all because I cannot remember the exact location off the top of my head, only one example nationwide of a clearly defined community benefit agreement about a data center. So this is a concept that's been generally taken from more of the energy sector of the community benefit agreements. So what I've seen, what I've been heard talked about with a community benefit agreement, is just kind of adapting it and what we know from the energy side to fit a data center. It's not a perfect fit, but there's really no good examples that I know of yet.

Thank you. I did have another question, too. I was wondering if any of you would be able to speak a bit more about what sort of fees are passed on to residents. It came up in, I believe, the presentation from Kier. And also in terms of just the conversation around property taxes for any data centers that maybe don't get any sort of, I think you said here, tax evasion. Yeah, the tax abatement. What does the return look like to residents? Is there a benefit to them there?

Again, great question. Thank you very much. I think it depends on who you ask. But I think it depends on what kind of the parameters of the agreement for tax abatement are. I think they can probably be negotiated in whatever way makes sense for the community. But I think it's really kind of our understanding our hope that those discussions are what are actually happening. And it's not a developer or an end user coming in and saying, we're only able to do this, or we want this. That it's really more of a holistic discussion with the community to say, does a tax abatement make sense for us? And to what extent are we willing to do that? will be the first to admit, I'm not an economist, so I can't tell you how it might pencil out. But it's, again, the discussions that need to be happening within the communities with the people who have the decision-making power.

Yeah. How about fees that get passed on what's been typical so far?

I think it depends. Again, it depends. It's true. But it depends on a couple of things. So a lot of times the upfront costs might be taken care of by the data center and user developer. But there are discussions now that I've kind of been hearing about what happens 15, 20, 25 years down the line. when you've built up all this infrastructure in a local community that was being paid for by the data center and then they leave. We've seen similar things happen with large fossil fuel energy projects. When that kind of tax benefit is gone, who ends up paying then for the system and the upkeep of the system is something to consider too. I don't know if we mentioned this, but like the decommissioning costs or the kind of long-term costs of upkeep are something too. But I don't know if either of you have other ideas about these. Thank you.

Thanks, Ms. Yang. So much of this does focus on energy, so I'm glad we've been talking about heat, but electricity is the other side of that. So I was wondering if Mr. Marshall or Ms. Rasmussen would be willing from Xcel Energy to come up and just speak to, really appreciate Cura's caution about this, and I think so much of this does depend on your local energy supplier. So you're our local energy supplier.

Absolutely. Thank you, President Naker, council members. John Marshall with Xcel Energy and the regional vice president for Minnesota, North and South Dakota. Xcel Energy, just by way of background, if you don't know, headquartered here in Minnesota. I've been serving the city of St. Paul going back to 1909. Clean energy leader across the nation, I think very much lauded for its clean energy transition leadership. We've been aggressively reducing carbon emissions in our generation fleet for many years. Today, Minnesota is being served by us by about 69% carbon-free electricity. We have aggressive plans in place. By 2030, we'll be nearing 90% carbon-free and very much tracking state law and have full plans to be at that 100% carbon-free goal by 2040. We think that does make us a very attractive energy provider, certainly for data centers, frankly, for all of our customers, our residential customers, our business customers, as we're all sharing in those benefits of achieving carbon-free electricity. We have been working with data centers for a number of years. I will say just more kind of editorially, for about 10 years, those conversations were really rooted around, we're a large user, are there any rate breaks that can be given to us? Xcel Energy didn't really go into any of those agreements. I would say roughly three years ago, the posture changed significantly as there's been speed to growth significantly with technology changes for hyperscale data centers. So very much trying to leverage that strong interest and I would say work on very, very good deals with hyperscale data centers. A very recent case in point, a project we're working on now is down in Pine Island, just north of Rochester. Again, not pertinent or material, really, to the city of St. Paul. This is a hyperscale data center. That's a data center with Google, an arrangement that's extremely favorable for, we think, the local community and certainly the balance of our customers. That's a large data center. The agreement does provide funding for the city of Pine Island, who is excited for the data center, roughly $20 million towards their schools and their local needs. billions of dollars of investment down there. Google is also paying Xcel Energy to have Xcel Energy's system build out 1,900 megawatts of clean energy. That includes 1,400 megawatts of new wind projects, 200 megawatts of solar, 300 megawatts of long-duration storage that will be a system benefit for everybody that Google is paying entirely for that. So that's a really good example and recently praised, I think, as the best case example for a large utility and a data center. A lot of publicity around that one and worth looking up on a hyperscale standpoint. In the urban core infills that we've been talking about, we have seen quite a bit more interest in activity, both in downtown Minneapolis and in downtown St. Paul. An active case study that exists in downtown Minneapolis would be the Sleep Number Headquarters building. That's been covered in the news a bit lately. That example, interesting one. The building was sold for about $20 million after significant investment, a few hundred million dollars, if you will, of jobs and activity and quite a few hundred million dollars of infrastructure investment. That building resold 18 months later for $235 million. Great property tax benefit for the city, the county, the school district in Hennepin, and city of Minneapolis. Increased electric sales for that building as well also constitute impacts for the city's franchise fees that Minneapolis collects, roughly 5% of gross revenue on that. So they will see significant franchise fee benefits as well to their bottom line. There is, again, continued interest in the downtown urban core. As Mike notes, St. Paul has a really great strategic advantage with the longtime district energy system here to work to integrate those opportunities well. So from an energy provider standpoint, we have capacity. We have available electricity to serve really any incoming customer. We have processes in place, whether it's a new target or a new residential complex, mixed-use complex, or a data center, large or small, to make sure that we're responsibly studying and intaking those projects to assure that costs are covered by the data centers, by those customers impacting the system, and that we have ample reliability to continue providing what we're proud of, 99.9% reliability for our customers. So broad overview, I hope that helps at least.

Thank you, Mr. Marshall. That is really helpful. I hear you saying there's enough capacity in the system. Yes. I hear you saying that the cost does not get passed on to other rate payers, but is that true and is that true in the long term in terms of if additional capacity needed to be built would that be a cost that would be passed on to residential customers, for example? Or is it the case that these data centers are paying for themselves?

From a hyperscale standpoint, they're very much paying for themselves. And we do have access. We have excess capacity right now on our generation fleet and our transmission grid and our distribution system that serves the downtown St. Paul area. When you increase consumption, when you have more use of that otherwise idle power, those costs are spread across more units, more sales, And that helps bring down fixed costs that everybody else is paying for today. So the more people use that power, those costs are spread across. That's a positive benefit for everybody. So there is good value in using that idle power and spreading those fixed asset costs across the system that all customers otherwise would be paying for.

Got it. Thank you. Very amazing to be put on the spot and be able to deliver a presentation like that. Absolutely. Other questions for anybody?

If I could just offer one more note, ponying off of what John just mentioned. Within the boutique level, that 2 to 50 megawatt, the infill type of data center projects, most often those developers are actually partnering with the local electric utility to size their center appropriately to be able to achieve what John just spoke through around transmission availability, generation capacity. So it isn't necessarily part of their mission is to come in and leverage existing infrastructure that's being underutilized versus coming in and stressing the system. So in as much as we have building availability within the downtown area and we have the infrastructure to capture that waste energy, their partnership with the local electric utility creates a phenomenal opportunity both to benefit all of the users, but also to leverage that infrastructure that's otherwise not being utilized.

I also heard the point about franchise fees are related to usage, and obviously that is something we've been talking a lot about in terms of our climate goals in the city and the amount of coming in through those dollars. I see Ms. Johnson. We have about three and a half minutes left.

Two quick questions. For the Pine Island example, how long would you say that that discussion took or that that overall work has taken just to get to where it is now? You kind of mentioned that it seemed like the best case scenario, but how much is the estimated time? How long is something like that?

It's tough to guess. I would say over the last couple of years, discussion, developer involved, Google involved, the utility provider, local city very much involved. So all of those parties kind of coming together on that project.

And I think just one of the things that I've seen just with some of the moratoriums have been that they were often created with this aspect of doing a study, or doing some follow up, or basically creating time periods for some of the municipalities that have not had a chance to really dive into those discussions and often has come from or stemmed from quite a bit of community, I wouldn't say backlash, but definitely folks that maybe are tuning into some of the local issues maybe for the first time, some people coming in as a return. What is that current conversation? And I guess I would ask that for everybody who presented today. That ecosystem of community education and community engagement happening right now, what does that look like? Because when we think about these projects, and I don't know if we'll get to the specific. It's not a presentation. So just thinking about some of the projects that are specifically as it relates to the city of St. Paul. Appreciate things that are happening across the state. What does that look like, I guess, from Excel's vantage point and then from District Energy as well as CURE? Like, a lot of the community involvement seems to stem from folks who are like, wait, what?

Yeah.

And what exactly does that look like now?

I think I appreciate that, Council President Naker, Council Member Johnson. I would say somebody mentioned just the speed in which this technology has come on. They've been around, but they're coming on faster now. I think there is backlash, and I think there's fear and concern to understand and learn. There are concerns about energy availability, energy costs, reliability, water usage, all of those discussions, and wanting everyone to get their hands around those and assure that they're being fully covered and concerned. I think the Google project is a great example of all of those bases fully covered and then some. From an energy standpoint, what Xcel is doing is trying to meet with and engage local governments, community members, answer questions, just to assure that from an energy standpoint, When we're working with these incoming customers, we have all bases covered to protect our customers on costs and on reliability, and that we've been responsibly bringing on large growth loads for many, many years, and we'll continue to do that. If others have comments.

Yeah, I just echo what John said. It requires more of a level of transparency than perhaps the industry had been used to because of the greater backlash that's been within the general public. Many of the concerns are not necessarily real for the types of centers that are getting developed today and the benefits that can be brought to the local community. but that doesn't mean that they aren't invalid concerns that have to be addressed and talked about. And so there's much more of a community outreach and engagement aspect of the development of these systems than they perhaps were used to several years back.

We'll let Sarah go, and then I saw Ms. Bowie, and then Ms. Kim will have a final word.

Yes, perfect. So I think it depends on, again, I think I said this earlier, it depends on who you ask. I don't believe that the folks that at least we talk to that we work with, the grassroots organizing folks down in Pine Island, believe that they were included in discussions that occurred about what those benefits might have been that the end user is promising. And so I think That needs to be addressed. What would they have wanted in terms of transparency and at what point? As I mentioned, NDAs, non-disclosure agreements, are prevalent. We've seen that across the state. That's not hyperbole. That's not something that we're kind of just making up on the spot here. That has happened. And people feel understandably like they haven't been heard, that they haven't had an opportunity to weigh in. at points where it matters. If discussions have been happening for years, at what point do folks in the community get to weigh in? And that's what I'm hearing. That's what folks are really wanting to know.

Thank you. Ms. Kim actually has a hard stop, so I'm going to let her ask her question, and then we'll go to Ms. Bui for the final word, if you don't mind.

Yeah, I really appreciate that. I guess I'm just interested in what data validates or invalidates these concerns. And I think because it's such a nascent and budding industry, yes, we're talking about concerns of larger hyperscale. But I'm interested in proving the negative. If it's focused on hyperscales, what data do we have that indicates and proves that the environmental impacts, the energy impacts, the cost burden impacts are factual or can be demystified but by facts and data. And so I'm very interested in kind of digging into the concerns that residents have and then offering data that is validated through studies and through sort of independent reports. And I'll just say the spiel again really quickly, but I think the council members here have heard a diversity of perspectives, and it's even just the starting point. I mean, there's three folks that got to come up to speak very briefly around sort of their investment and interest in this topic, and so it's to say this is, again, the starting point of a very large, broad conversation that needs to include All perspectives including residents that are have been impacted by data centers currently that have our belts have been built to bring them to the table including all the industries that are Going to be impacted in the jobs that we could put online for this. So those are thoughts Miss Bowie, you know, I'll close it out here.

Thank you so much councilmember to him. Like honestly, this is a really fruitful information I really appreciate the thorough complexity and like the full breadth of just the presentation this has been a hot-button topic from you know for municipalities across the country you know I think we are really unique in a sense that we have so many different no data centers or not did it excuse me district energies and data providers and energy providers here to actually inform us of some of these oversight questions. But I want to just pivot a little bit. I have a question particularly around the community benefits, particularly in the labor force. And what does that look like in terms of what are the partnerships, the investments that goes directly into the workforce to prepare our residents? into this industry. Because I think about, especially when developers come in, the community benefits are x amount of jobs, x amount of jobs for construction. But that doesn't often translate to the jobs that people in our neighborhood actually can benefit from. and be prepared to have the skills to actually enter to that industry. I know this is what you were sharing earlier, that the industry is kind of new to these like nuance and community benefits, but I'm just curious to know what the investment, particularly in the workforce.

If anyone can speak to that super quickly, otherwise it might need to be a follow up, because I recognize we're already past time.

Yeah, unfortunately, I think you'd want to have a data center developer at the table to talk about it from an ongoing center operation. Of course, the folks from Morton Center are experts to talk about it from a construction workforce availability perspective. But on the center operation, I think you'd want to have a developer here for that. Sorry.

And I also really appreciate the question. This might also be another opportunity where we would want to engage the county and workforce solutions in particular with a burgeoning industry that we want to be preparing people for, not just during construction, which is immense, but then, to your point, with operations into the future. So I appreciate the thinking about that. I do want to wrap this up. I want to thank people for being gracious and staying over time and speaking out of the cuff. And thank you again to everyone who joined us. As Ms. Kim said, this is the beginning of the conversation. It was very informative. I learned a ton. And I appreciate all my colleagues' questions and perspectives as well. And for now, we'll leave it there. We're adjourned.