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ARDEN HILLS CITY COUNCIL WORK SESSION – AUGUST 17, 2015 7 City Administrator Klaers reported that this was the case if you included the transfer to the PIR Fund. Mayor Grant commented that the public safety increases equated to a 2% levy increase. He requested further information on the staff wage increases. Director of Finance and Administrative Services Iverson discussed how providing a 2% cost of living adjustment in addition to step increases would impact the tax levy. She encouraged the Council to consider if the compensation scale should be adjusted by 2% as the recent study used 2014 wages and the consultant reported that the market moved 2% for 2015. Further discussion ensued regarding the tax levy. Councilmember McClung discussed the tax rate and appreciated staff providing the proper numbers in order for this to remain flat. Councilmember Holmes was concerned about the City’s PIR fund. She did not want to see this fund diminished. Director of Finance and Administrative Services Iverson requested that the Council provide her with a starting point. She understood that the Council could always work their way down. Mayor Grant offered 3% as a starting point. He questioned how under budget the City was at the end of 2014. Director of Finance and Administrative Services Iverson reported that the City had an excess of revenue over expenditures of $142,000 at the end of 2014 in the General Fund. She explained that the funds remained in the General Fund as the City was right at the 50% Fund Balance level according to policy so no funds were transferred to the PIR Fund. Councilmember McClung stated that he would support 3%. Councilmember Holmes did not support 3%. She believed it should be higher. Councilmember McClung feared that the City should not raise its taxes too much given the fact that the County always has such large increases. Councilmember Woodburn commented that he would go along with the 3%. Director of Finance and Administrative Services Iverson asked if the Council wanted to review a budget prior to approving the preliminary tax levy. The Council was in favor of reviewing a budget when it set the preliminary tax levy at the September meeting.