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ARDEN HILLS CITY COUNCIL — DECEMBER 11, 2023 9 Mayor Grant commented on how North Oaks was run differently than Arden Hills, in that they received revenues from homeowner association fees. He explained he tended to agree with Councilmember Holden that at 12.55% the budget was underfunded by $130,000. He reported these funds could be carried over from 2023 and not transferred to the PIR Fund. He supported moving the levy down to 10% or II% as well. He indicated staffs presentation did not discuss how the City has underfunded the budget in previous years. He stated the City does not overspend its budget, but rather there are savings across the budget each year. Councilmember Rousseau stated it was her understanding $1 million that was not anticipated for Old Highway 10 was not in the budget. City Administrator Perrault explained this additional expense was not included in the budget. Councilmember Rousseau questioned how much the City would owe in fire department expenditures in the coming years. City Administrator Perrault stated the most recent estimates put this at $19 to $20 million. He explained the City received $6.6 million in State funding, which meant the remaining share of $13.3 million and the City's portion would be 25% of this or $3.3 million. He indicated the City would bond for this expenditure, which was proposed to occur in 2026. Councilmember Monson indicated the fire department would be hiring six new captains, noting the costs were covered for the next three years. She indicated the City was putting funds aside to cover these costs in the future. She reported she has not had clarity on how much money the City will have at the end of the year. She commented on the pattern in the past, noting surpluses typically came from a project that came in that was larger than unanticipated or from staffing vacancies. She believed the City has been reliant on additional revenues that were foreseen or lucky. She stated if the levy were reduced to 11 %, this would mean the City was operating at a $200,000 deficit. She reported staff does not anticipate any large projects coming up in 2024 and noted she did not want to bank on any staffing vacancies. For this reason, she recommended the levy remain at 12.55%. Councilmember Holden stated there were a lot of projects that the City had done in the past that came in under budget. She indicated this was another way budget surpluses were created. She reiterated that $130,000 in surplus was seen just from tonight's meeting. She commented further on how the City typically had additional projects that they were able to fund from surplus dollars in the budget. City Administrator Perrault explained the City did not have any anticipated projects in 2024, but noted there were development projects in the hopper. He reported there were no additional development projects in 2023 and so the City would be short on the revenue side by $120,000. Because of this, the potential for transfers would be limited at the end of the year. Mayor Grant clarified for the record, there would be development projects occurring in Arden Hills in 2024. However, these would be smaller scale projects.