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ARDEN HILLS CITY COUNCIL—DECEMBER 12, 2022 5 9. PUBLIC HEARINGS A. Truth In Taxation Hearing Finance Director Bauman stated this was a required annual hearing related to the City's budget and tax levy. She discussed the numerous reasons why tax bills change each year, noting this had to do with property values, budgets, special assessments and voter approved referendums. She explained the City set the preliminary tax levy on September 26 and proposed property tax notices were mailed by the County to Arden Hills residents. She commented on the projected changes to property values for 2023 and described how the median value homeowner would be impacted by the proposed tax levy. She provided a summary on the General Fund budget, along with the CIP and requested the Council hold a Truth in Taxation Hearing. Councilmember Holden asked how the rate increases were calculated. Finance Director Bauman explained the improvements planned for the St. Paul Regional Water System were going to impact the water fund. She reported she scheduled out the water fund with increases projecting the higher costs and an increase was not required for 2023, but may be required for 2024. Mayor Grant reported the budget for 2022 was under funded by $140,000 and noted the City has a 50% fund balance policy. He asked how close the City was to coming in on budget. Finance Director Bauman stated staff is estimating $350,000 to $400,000 to the positive for 2022. She indicated these funds could be put toward capital projects. Mayor Grant explained the preliminary levy was set at 7% based on the information the Council and staff had at the time. He reported the final levy can be decreased but not increased. Mayor Grant opened the Truth in Taxation public hearing at 7:46 p.m. With no one coming forward to speak, Mayor Grant closed the Truth in Taxation public hearing at 7:47 p.m. 10. NEW BUSINESS A. Adoption of the 2023 Budget and Tax Levy • Resolution 2022-056 Setting the Final Tax Levy for Taxes Payable in 2023 • Resolution 2022-057 Adopting the Proposed 2023 Budget Finance Director Bauman stated a budget work session was held with the Council on August 15, 2022. Staff was directed to provide proposed maximum levy increase options from 4%to 7%, and Council adopted a maximum tax levy increase of 7.0% on September 26, 2022. Another budget work session was held with the Council on November 21, 2022. Staff commented further on the final budget and tax levy and recommended approval.