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ARDEN HILLS CITY COUNCIL— SEPTEMBER 26, 2016 5 Interim City Administrator and Director of Finance and Administrative Services Iverson stated this was the case. She explained it was unusual for a City the size of Arden Hills to have their own City Engineer and Public Works Director. Councilmember Holmes indicated if the Council were to approve the 4.7% tax levy, the City would have a budget deficit in the amount of$238,324. It was noted this amount would have to be covered by reserves. Interim City Administrator and Director of Finance and Administrative Services Iverson stated that a 7.6% levy increase would be needed to cover the ongoing operating costs. Councilmember McClung asked how much budget savings the City realized in 2015. Interim City Administrator and Director of Finance and Administrative Services Iverson reported after the 2015 audit was completed it was determined the City had a 629% fund balance which meant there was an excess of$565,121 in the General Fund that could be transferred over to the PIR Fund. Councilmember Holmes questioned why excess funds should be transferred to the PIR Fund. Interim City Administrator and Director of Finance and Administrative Services Iverson explained the purpose for this transfer would be to assist with building up the City's capital funds. Councilmember McClung commented a portion of the transfer could also be used to buy down the 2017 tax levy in order to reduce the impact on Arden Hills' residents. Councilmember Wicklund supported a 4.7% preliminary tax levy increase knowing this number could be reduced by December. Mayor Grant explained that some of the extra expenses budgeted for 2017 were related to the Comprehensive Plan and should be covered by the PIR Fund. Councilmember Holden supported the 4.7% preliminary tax levy and hoped the Council would be able to reduce this percentage before final approval is granted in December. Councilmember McClung stated he could support 4.7% this evening and looked forward to further discussions on how to reduce this percentage in the coming months. MOTION: Councilmember McClung moved and Councilmember Wicklund seconded a motion to Adopt Resolution #2016-031 — Settiniz the Preliminary Lew for Taxes Pavable in 2017. Mayor Grant believed the 4.7% tax levy was too high and stated he would not be supporting a 4.7%tax levy in December.