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ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION — AUGUST 19, 2024 17 Finance Director Yang said the public safety fund assumes the franchise fee revenue source to offset the new fire station bonding at $375,000 annually. There is a levy proposal of $260,000. This is an increase of $90,000, to include $40,000 to offset captains' salaries and $50,000 to balance the fund balance. Councilmember Holden stated if we do the bonds and we get a really great rate, will we bond less than we need or are we going with the lower rate. Would it be ideal to keep it at $375,000 and pay it off early? Mayor Grant asked if $375,000 covers it. Councilmember Monson said it wouldn't impact the levy either way if we do franchise fees. Mayor Grant said we raise franchise fees or we could leave it at $375,000 and if it's short, you could use the cash fund for the rest. Councilmember Holden said she is trying to figure out how we'll pay for Lake Johanna. We have to wait to see if the county is going to do that. Public Works Director/City Engineer Swearingen said he received additional information regarding Lake Joahnna Trail. The county is going to do an RFP for design and public engagement in late 2025. They are budgeting to do that work late next year. Councilmember Monson asked about the $375,000 annually. This assumes the station will be $20-$25 million. We will pay roughly a quarter of that. Is the $375,000 for a $5 million bond? Finance Director Yang thought it was $4.1 million. She asked if Council is okay with the $90,000 increase annually to balance this fund. Councilmember Monson asked what percentage it is increasing by now. She understands that we need to pay more every year. She said she is fine with the $90,000. Mayor Grant asked for explanation on the levy proposal of $260,000 plus $90,000 from previous. Finance Director Yang said the levy was set at $170,000 in 2022. It was increased to $220,000 in 2023. Last year that amount was transferred to the equipment replacement fund. That left $40,000. We'd get it back to the base amount of $170,000, plus the $40,000 for the captains to get it back up to $220,000, and $50,000 more to get to the $260,000. Councilmember Monson doesn't see any other option. We have to pay our fire and police. She would like to see that fund healthy. Councilmember Holden asked what the transfer to the cable fund was. Finance Director Yang said that is similar to a transfer that was done in 2024. There are cable franchise fees coming in, but those fees are not enough to offset the operational expenditures.