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ARDEN HILLS CITY COUNCIL—SEPTEMBER 23, 2024 6 <br /> Finance Director Yang explained the general fund balance was currently at $3 million on an <br /> annual basis. <br /> Councilmember Fabel discussed how an 11.87% tax levy includes more deficit spending in <br /> 2025. <br /> Finance Director Yang indicated the proposed budget projects a budget deficit in 2025. <br /> Councilmember Fabel questioned if the Finance Director recommended the City continue with <br /> deficit spending into the new year. <br /> Finance Director Yang stated ideally, the City would want to adopt a balanced budget, but she <br /> has seen the Council has adopted a budget deficit in the past, noting some of the budgets have <br /> outperformed the projected deficit. She indicated there was some risk in adopting a budget that <br /> was not balanced. <br /> Councilmember Fabel commented in order to approve a balanced budget cuts would have to <br /> occur or the tax levy would have to be increased to 15.5%. <br /> Councilmember Holden stated the City only receives property taxes twice a year, so the <br /> numbers from July 26, 2024 were deceiving. <br /> Finance Director Yang reported this was correct. <br /> Mayor Grant commented on the July 26 year to date versus actual numbers. He discussed the <br /> amount of funding that was transferred out in 2020, noting these additional funds were due to <br /> CARES dollars. He indicated the City maintains a 50% fund balance. He reviewed the transfers <br /> that were made in 2021 and 2022, noting the Council has tried to budget well, while funding extra <br /> projects that may not have been included in the budget. He did not believe it was realistic to <br /> believe staff would spend 100% of every single cost within the budget. He indicated Arden Hills <br /> was not unique when realizing it will not spend 100% of every dollar within the budget. He <br /> explained the budget was a plan and not a determination that every dime within the budget would <br /> be spent. <br /> Councilmember Monson indicated in 2022 there were concerns with the fact the Council was <br /> relying on revenues to balance costs knowing the City was going into a high inflationary period. <br /> She explained there was some under spending but there was also more revenue that came in that <br /> was not anticipated. She commented this year and last year, staff made it clear no additional <br /> revenue was anticipated other than what was budgeted. In fact, the revenues projected for 2024 <br /> may not come in as planned. She stated last year she supported under funding the levy. She <br /> explained she was hesitant to approve another budget with deficit spending given the fact there <br /> were no large developments on the horizon for 2025. She commented on the great investments the <br /> City would be making in its staff in the coming year, noting this investment would assist with <br /> retention and recruitment. She also reported one of the main comments she hears from residents <br /> was that they want the trails and parks maintained, which led her to believe the City should be <br /> investing in its parks for the betterment of the community. <br /> Councilmember Rousseau explained the majority of the Council supported franchise fees to <br /> assist with the construction expenses for the fire department. She discussed how the Council <br />