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ARDEN HILLS CITY COUNCIL – SEPTEMBER 28, 2015 8 City Administrator Klaers explained that the Council last discussed the budget at a work session on August 17th. He discussed how the City’s tax base would increase this year due to the Round Lake taxing district coming back onto the tax rolls. As discussed by the Council in August, a 3% increase in the tax levy was being proposed by staff. The balance of the PIR fund balance was noted and staff provided comment on the larger expenditures planned for 2016. Mayor Grant believed there was general agreement among the Council in August to direct staff to look at the budget and bring back a 3% levy. However, staff has brought to the Council a document with a 6.5% levy. Director of Finance and Administrative Services Iverson reported that staff did prepare a 3% levy as a starting point which includes the use of $280,000 in reserves. Councilmember Holmes asked if the City staffing situation with retirements would provide savings or would recruiting costs offset this. Director of Finance and Administrative Services Iverson believed that the savings would be minimal in 2015. However, the City might achieve some savings in 2016 depending upon the rate at which the new employees are hired. Councilmember Holmes did not understand why the City had a deficit of $200,000 within the budget. Director of Finance and Administrative Services Iverson reviewed the budget document with the Council in further detail noting expenditures outweighed revenues by $200,000 at this time. It was noted that the expenditures for 2016, included a $100,000 contribution to the PIR fund. Mayor Grant reminded the Council that single line items could be addressed in the future and that the Council was only being asked to approve the preliminary levy this evening. Councilmember Holden explained that she was unable to attend the August work session where the budget was discussed. She believed that a 3% tax levy was low. She supported increasing the tax levy until the budget can be reviewed further. She noted that when the budget is discussed in December there should be a better understanding regarding the impact new staff will have on the City. Councilmember McClung supported the tax levy remaining at 3%. Councilmember Holmes indicated that she supported the 6.5% suggestion in staff’s memo. She believed that the proposed budget was well-reasoned. She indicated that the City will have increased costs for TCAAP and new staffing that would differ from 2015. She understood that Arden Hills’ residents took advantage and enjoyed the City’s parks and for this reason, she did not want to see cuts made in this area. Mayor Grant inquired if staff had looked into PIR spending reductions.