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ARDEN HILLS CITY COUNCIL — SEPTEMBER 25, 2023 8 City Administrator Perrault noted the previous Finance Director estimated this to be somewhere between $100,000 and $200,000. Councilmember Holden commented on the budget to actual for 2023 and noted the City has had a budget surplus every year since 2013. She did not believe the City should be pursuing a 14.7% tax levy but rather should reduce this amount taking into consideration the budget surplus from 2023. She stated she would like to see the tax levy somewhere around 10%. Councilmember Fabel indicated the proposed tax levy was to provide adequate revenues to finance the 2024 budget. He stated in order to fully fund the budget staff recommends a levy of 12.55%. He questioned what portions of the budget does staff not fully fund. City Administrator Perrault reported staff was recommending the levy be at least 12.55% and that the budget be fully funded. He explained he was not anticipating permits would be as high in 2024 as 2023. He noted to Councilmember Holden's point, the City would have budget excess that would assist with balancing the budget. Councilmember Fabel stated he believed it was common sense to set the preliminary levy at an amount that meets the preliminary budget. Mayor Grant explained he went through over the past 10 years of budgets and noted the City was $750,000 under budget during this time period. He indicated the City never spends all of the budget. He reiterated that all of the expenditures within the budget were estimates, along with the fact all revenues were estimates. He commented further on how he believed a 10% levy increase would be sufficient for 2024. Councilmember Monson asked what the outstanding items were within the budget. City Administrator Perrault stated this included union negotiations, final insurance rates, final rates from the LMC, and City Hall staff wage/benefits. Councilmember Monson questioned if the $200,000 surplus for 2023 was due to the loss of the Finance Director. City Administrator Perrault reported this estimate was done prior to Finance Director Bauman leaving. He indicated this number could be higher than earlier estimated. Councilmember Monson indicated she rewatched the City Council budget meetings from last year. She commented on how the tax levy was not just for 2024, but rather had impacts on the health of funds in future years. She believed it would be prudent to set a higher levy for the preliminary levy. She stated she did not want the Council to kick the can down the road but rather supported the preliminary levy being set at 14.7% with the understanding this number could come down by December. Councilmember Rousseau questioned if the City was considering how the budget surplus would be used in 2024.