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Equipment & Building Replacement Fund • The current plan includes replacing the City Hall roof in 2025 and replacing the City Hall air handlers in 2028. • PW staff has been working on the long-term asset replacement plan for equipment. Because of this, $683,500 of new or replacement equipment was added to the plan through 2027 and $174,000 was added for 2028. • The current $50,000 tax levy does not support the needs of this fund. Utility Funds • Public Works staff continues to evaluate the condition of City utilities throughout the community. The majority of street projects currently include a minimum amount for isolated utility repairs but these amounts could increase as locations are identified where broader water, sanitary sewer and drainage replacement is needed. • For the Sewer Fund, no I&I grant funds have been included in the plan as the amounts are unpredictable. Rate increase assumptions are as follows: ■ Water — 2024-2033 (0%) — possibly look at rate reduction in a future year ■ Sewer — 2024-2026 (2%); 2027-2033 (0%) ■ Storm— 2024-2033 (1 %) Council Direction Staff is seeking direction from the City Council regarding the following items: 2024 projects As we review the 2024 projects, does the Council have any questions, comments or concerns about including them during budget preparation? 2024 property tax levy The levies for the EDA ($100,000), Equipment/Building Replacement ($50,000), Public Safety Capital ($220,000) and PIR ($250,000) are currently proposed to remain at the same amount as was levied in 2023 in this plan. Levy increases are needed for the Equipment/Building Replacement and Public Safety Capital funds. What increases, if any, should staff assume? 2023 General Fund transfer There is $253,640 available to transfer from the General Fund to capital funds in 2023. This total represents the amount at 12/31/2022 that was in excess of the 50% fund balance reserve goal stated in the City's financial policies less the amount needed to be reserved due to additional costs being incurred for the Communications Coordinator position and the NYFS contract. There are some one time operational expenditures included in the 2024 Budget ($40,000 for ordinance updates and $17,500 for a comp study). A portion of these funds could be used to cover those costs so they are not included when calculating the needed levy increase. The 2023 Street Maintenance budget will also need additional funds due to overages in the salt/sand and overtime line items due to winter plowing. Does the Council have a preference on where the funds should go? 2024 Local Government Aid (LGA) The omnibus tax bill includes an $80 million annual increase in local government aid. Arden Hills is not currently a recipient of LGA Funds. This increase would mean Arden Hills will Page 3 of 4