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ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION — AUGUST 25, 2025 18 Councilmember Weber said our projects would stay on track, as well. Finance Director Yang confirmed. She discussed scenarios C and D. These assume a shift in the PMP projects after Public Works Director Swearingen's analysis. Both have the same assumptions including: the shift in the PMP projects, increasing the levy by $50,000 in 2027 with no impact on the 2026 levy. The key difference is in scenario D we increase the levy by $50,000 annually thereafter. It will build up a Fund Balance reserve and get us to 2033 vs. 2031, as in scenario C. If we keep adding to the Fund Balance reserve we will allow ourselves more time. Finance Director Yang said scenario E assumes the same shift in PMP project expenditures but instead of increasing the levy, we would bond in 2026. This scenario will get the City through 2033. With bonding, we have structured debt service payments, a tax levy, and a larger fund balance capacity. Scenario E would see a $2 million fund balance vs. $1.3 for scenario D. If Council doesn't want to bond, Staff s recommendation is scenario D. That would be the PMP project shift and increasing the levy by $50,000 annually. Councilmember Weber said he isn't seeing it outlined that with scenario B that there is going to be a levy increase to pay that. It was a little over $300,000 combined for payment. Those would be down the road vs. a straight $350,000 next year to still fall short. We are looking at a potential increase of $1.2 million, splitting our project costs over the next six years. He said $1.2 over 20- years is a big interest rate so is $1.2 million over six years. We're losing that money either way. He would rather not risk degradation of our roads even further to the point where we have to go to a reconstruct. That would double the price. He likes the idea of scenario D as a measured approach, he thinks bonding now is justified. It will add to the PIR Fund annual levy immediately. It will get our PIR back up, giving us a head start on paying back the bond. The interest is money we would have lost anyway through increases to project costs. Councilmember Holden asked where Councilmember Weber sees the project cost increased to $1.2 or $1.7 million. Councilmember Weber said there was an earlier slide that showed the before and after. Comparing the prices it's a difference of $1.2 million. Each project split in half added an additional $400,000 between the two. The last project getting pushed out two years was a half a million dollars higher. That got kicked off the page so it isn't counted in the total amount. With this plan, over the next 8 years, we're paying an additional $1.2 million for the same projects and just splitting them up. That justifies bonding. Councilmember Holden said the bonding cost is $1.7 million. That's $500,000. Councilmember Weber said it also rescues our fund. Councilmember Holden asked how many roads are close to requiring total reconstruction. We've been doing the worst first. Public Works Director/City Engineer Swearingen said today, without the new adjustment, once we got to 2030 we were going to address the ones that are in the worst shape. We did a large area of patching in Chatham neighborhood. That seems to be holding up well. He thinks we can