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ARDEN HILLS CITY COUNCIL – DECEMBER 9, 2024 8 Mayor Grant reported the Council had offered their support for the CIP, but noted the police and fire contracts were provided by staff and a vote was not taken. Councilmember Fabel commented on the lengthy discussions the Council had regarding the police and fire contracts, along with the discussions held regarding employee compensation. He stated at the end of the day, the entire Council voted to support the proposed changes. He indicated his second observation was that even with an increase of 15.5%, Arden Hills would have the second lowest tax rate (28.07%) in Ramsey County. He explained in 2017, the City was less than 1% of this tax rate (27.2%) and in 2022 the City’s tax rate was 26.5%. He discussed how the proposed increase would be similar to the tax rate that the City has had for years. Councilmember Rousseau stated it was disappointing that half of the cities in Ramsey County were considering a levy increase of 10% or higher. She indicated she did not know what the root cause of this was, but explained Arden Hills was looking at a 13% to 15.5% levy increase. Councilmember Holden commented the City overspent $100,000 on Ehler’s and legal expenses in 2024. She stated without this overage, the City’s budget would have come in with a net positive in revenues. She asked if the fire department pay increases were in the budget. Finance Director Yang reported these were included in the budget for 2025 and going forward. Councilmember Holden inquired if the Great River Greening increases were included in the budget. Finance Director Yang stated the CIP projects were included. Councilmember Holden inquired if the Public Works salary increases were included in the 2025 budget. Finance Director Yang reported this was the case, noting negotiations were still underway but a 3% COLA had been included. She explained she does not have the final salary numbers at this time but noted the insurance numbers were included. Interim City Administrator Jagoe reported the union contract has not been finalized, but estimated the pay increases for public works would be $25,000 to $30,000. Councilmember Monson commented on the general fund balances over the past eight years. She explained the general fund was the operating fund for most services the City offers. She indicated these activities were funded by tax dollars and permit fees. She stated this fund needs to be a healthy fund and should be keeping up with inflation. She discussed how the decreases in the general fund have led to a larger tax levy increase given how inflation and employee salaries were increasing. She described how over the years the City had not levied enough to meet expenditures. She noted incremental tax increases were necessary in order to avoid large tax increases. She believed when funding was transferred out, there needed to be better consideration of what levy expenditures truly were. She discussed how growing the tax base could assist with reducing taxes, which would occur once Rice Creek Commons began. She commented further on how the proposed increase was due to the fact only incremental increases were made to the levy over time and now as expenditures were rising the general fund did not have a balance to support these proposed increases. She reported this was not a new problem but rather staff has been