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ARDEN HILLS CITY COUNCIL WORK SESSION—AUGUST 17, 2020 7 D. Preliminary General Fund Budget Finance Director Bauman said the City is required to adopt a maximum tax levy by the end of September, which generally supports the General Fund. For the purpose of this discussion, there is a 3% tax levy increase reflected in the budget. As presented, the General Fund Budget is underfunded by $81,210. The 2020 budget was $121,590 underfunded so they are on the right path but eventually the City needs to adopt a balanced budget. A tax increase levy of 5% would be needed to balance the General Fund budget. Finance Director Bauman stated that she has included in building permit revenue $245,000 for two significant projects expected to move forward next year. One is a senior housing project and the other is a commercial office/warehouse. The proposed 2021 budget is $5,193,530, an increase of$175,220 or 3.5%. The increase is due to public safety costs which are going up over $95,000, and personnel costs. Finance Director Bauman said the projected 2021 property information is not yet available from Ramsey County. Because of this, staff is unable to calculate tax rates or levy impacts. There is no change proposed for the EDA Fund. The Public Safety Capital Fund has a proposed $50,000 tax levy increase. In regard to the EquipmentBuilidng Replacement Fund, the plan is to develop a replacement schedule for all City equipment and the tax levy will be adjusted accordingly. More revenues are required to support City infrastructure projects in the PIR Fund. Finance Director Bauman reported that a survey was recently routed to various cities in the metro asking about proposed levy amounts being considered. Arden Hills would be on the lower spectrum of that survey. Also, this preliminary budget does not include any increases for business license or liquor license fees. Staff had initially anticipated they would look at fee increases for 2021, but now with the Coronavirus pandemic the thought is to push any increases out at least a year. Councilmember Holden noted a significant shift in Recreation in 2020 and 2021 and Park Maintenance in 2020 and 2021. Finance Director Bauman replied that the majority of the shift came from the Recreation Program discussion with FPAC. The majority of it had to do with personnel time being moved from the Recreation Program to Park Maintenance. Councilmember Holden asked about the Elections cost. Finance Director Bauman said there was a $7,500 price increase in the contract price from Ramsey County. City Administrator Perrault said the County re-evaluated their overhead costs, they are looking at increasing wages for election judges, and updating their supplies such as signage. Councilmember Holden said she could support a 2% COLA for staff, but not 3%. Mayor Grant said if inflation is only 1.2%, a 3% increase wouldn't work for him either. He would be more inclined to go with 2%for staff and negotiating with the union for their contract.