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ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION — AUGUST 25, 2025 20 Mayor Grant favors Staffs recommendation. He doesn't think bonding is right of us. The interest payments will get us. He asked Public Works Director/City Engineer Swearingen about our PCI rating after 2026. He thought it was 72. Public Works Director/City Engineer Swearingen he said it is around 72-74. We need to maintain it or it can dip drastically year to year. Mayor Grant said it can spike back up if we do a needed project. Public Works Director/City Engineer Swearingen confirmed. Mayor Grant said we are at 72 or 74 and we are trying to maintain 70. As long as the projects in 2028, 2030 and 2032 are not catastrophic projects with low PCIs, scenario D makes even more sense. Public Works Director/City Engineer Swearingen confirmed. He said we want to avoid upsetting residents over the condition of their roads. Overall the condition is 72 or 73 but Amble Drive is in the teens. It's terrible. Mayor Grant said that one is coming up. That should raise our PCI even higher. Public Works Director/City Engineer Swearingen confirmed but the rest of the system is degrading at the same time. Mayor Grant understands it's a net effect. He doesn't want Council digging itself into a hole over future years with interest payments. Councilmember Weber said the hole is already there as indicated by the red on the pages. We need to start to fix that. Right now, scenario D, without the Lake Johanna Trail, is projecting a $1.5 million deficit. That is pushing the projects that pushes them into a territory where full reconstruct may be needed. Bonding now would reduce the need to immediately spike our levy and not push the projects out that need to be done. It also gives us the opportunity to address probable issues with our General Fund being well below the minimum preference of 50% of our budget. He thinks we are at 20% now. Finance Director Yang said it is currently 45%. Councilmember Weber said it is expected to drop significantly. Finance Director Yang confirmed it could. Councilmember Weber thinks we need to address the issue now. We are already looking at the potential for lost funds in spreading out the projects. If we spend that money on interest it will save us from having to spike the levy. Councilmember Monson wondered what the pros for scenario D are other than us choosing not to bond. If we do decide to bond, what is the recommendation? Finance Director Yang said scenario E is the best option, if we choose to bond.