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ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION — AUGUST 19, 2024 20 Finance Director Yang said licenses and permits are set to the 2024 budget, however, an adjustment for 2025 may be appropriate. Charges for services is set to the 2024 budget. Franchise fee is expected to come in at about $57,000. That's under budget by $70,000. An adjustment may be appropriate here, too. Councilmember Holden asked when will the North Heights project start. Interim City Administrator Jagoe anticipates that in 2025, given the timing of the land use reviews. Project review won't be until early 2025. Councilmember Holden thought that could make up some of the deficit in permitting. Mayor Grant didn't want to predicate anything on that project moving forward. Councilmember Monson said a takeaway is that the revenues for 2024 are unlikely to be as high as we thought. Finance Director Yang shared a chart showing the general fund revenues for the previous three years, current year budget and the 2025 proposed budget. The prior three years general fund revenues average $5.3 million. There was a dip in 2022-2023 due to fewer building projects . The primary change in 2025 is due to a tax levy increase of $580,000. Finance Director Yang shared expenditures by department. They are expected to be approximately $6.6 million. This is a 9.6% increase over the 2024 budget or $580,349. This does not include a $50,000 transfer to the cable fund. Finance Director Yang shared expenditures by type. There was a comparable increase in both personnel services and other services and charges, which are the police and fire contracts. Finance Director Yang shared a bar graph showing the general fund expenditures for the prior three years, current year and the proposed 2025 budget. The general fund expenditures have averaged $5.2 million. The 2025 expenditure is proposed to be a little over $6.6 million. Finance Director Yang discussed personnel services. For 2025, it is set at $2.2 million. This is a 9% increase or $181,000 over the 2024 budget. This includes a 4% market adjustment, equivalent to implementation into the grid for the comp study. That is about $50,000. Also included are step increases and allocation changes, which are about $54,000. A 3% COLA impact of about $50,000, along with insurance and benefits and work comp insurance. She reminded this does not include any public works staffing updates. Finance Director Yang said supplies and materials are in line with 2024 budget. Finance Director Yang said other services and charges are expected to go up by almost $400,000 or 10.2%. There is an $86,000 increase for general government, primarily for permit software conversions. The elections contract is going up by $21,000. That is due to increased participation in absentee voting, training, changes to the MN election law and extend hours. Councilmember Holden asked about a figure of 67%. She didn't think the calculation is correct.