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ARDEN HILLS CITY COUNCIL – DECEMBER 10, 2018 7 <br /> <br />MOTION: Councilmember Holmes moved and Councilmember McClung seconded a <br />motion to adopt Resolution 2018-066 Setting the Final Tax Levy for Taxes <br />Payable in 2019 in the amount of $3,938.420. <br /> <br />Councilmember Holden indicated the proposed budget had a deficit predicted for 2019 and <br />requested comment on this from staff. <br /> <br />Finance Director Bauman explained initial projections show the City just over $200,000 in the <br />black for 2018 and these funds would be carried over to 2019. <br /> <br />Councilmember Holden questioned what the difference would be between a 3.5% and 4% tax <br />levy increase. <br /> <br />Mayor Grant commented this would only be a $20,000 difference. <br /> <br />Councilmember Holden stated she understood the majority of the increases in the levy were due <br />public safety increases. She questioned how the Council would manage a surplus in the coming <br />year. <br /> <br />Councilmember Holmes supported the Council placing all surpluses into the City’s Capital <br />Funds. <br /> <br />Mayor Grant discussed the City’s fund balance and financial policy for surpluses. <br /> <br />Finance Director Bauman commented further on the City’s fund balance policy noting this <br />policy was in place because the City only received property taxes twice a year. <br /> <br />Mayor Grant requested that all future surplus transfers be completed shortly after the audit and <br />not at year end. <br /> <br />Councilmember Holmes stated she would have supported a tax levy at 5% given the fact the City <br />was operating at a deficit. She understood this would be made up through a surplus but did not <br />believe this was the best practice. She explained she supported the City having a balanced budget. <br />She reported the City had achieved a AAA bond rating which was related to the City’s fund <br />balance. For this reason, she encouraged the City to not have an operating deficit and should <br />consider a 5% tax levy. <br /> <br />Councilmember McClung commented over the past three years, the City has used it surplus to <br />balance the budget. He commended the City for getting fairly close each year and for not <br />overtaxing its residents. <br /> <br />The motion carried 4-1 (Councilmember Holmes opposed). <br /> <br />MOTION: Councilmember Holden moved and Councilmember Holmes seconded a <br />motion to adopt Resolution 2018-067 Adopting the proposed 2019 Budget in <br />the amount of $13,972,990. <br />