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ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION — AUGUST 25, 2025 26 Staff will bring that back. Mayor Grant asked if the software is able to project where we will be at an overall PCI rating in each year? Public Works Director/City Engineer Swearingen confirmed. That is one of the slides he created for State of the City. He will share that. Council recessed the work session at 6:55 pm. Council reconvened the work session at 7:18 pm. Finance Director Yang said she will discuss the Public Safety Capital Fund. Changes were made to the Public Safety Capital Equipment Fund, based on the latest preliminary estimates from the Lake Johanna Fire Department. The changes include the addition of a command vehicle replacement in 2031 and 2033, an engine ladder replacement in 2032. The levy reserve bank and corresponding transfers to the general fund is based on nine new FTEs vs. the six that were in the July 28 preliminary budget. Finance Director Yang said council is aware that the Safer Grant will discontinue starting in 2027. Contract Cities will need to fund the new positions. In 2024, the City decided to raise the levy in the Public Safety Capital Fund to build up a reserve for this. At that time we knew there were only six FTEs. The reserve build up was agreed upon by Council in order to lower the impact of the annual levy increases. She outlined, in the packet, where it shows what the annual levy increases are based on, with the six and nine FTEs. An additional $12,000 will be needed in 2026 and varying amounts thereafter, should the reserve build up method be agreed upon to fund it. Finance Director Yang programmed the incremental $12,000 at the levy increase in the proposed budget. The City can consider other options. We could utilize excess franchise fees to cover, increase electric franchise fees, implement a gas franchise fee rate, or a combination of a levy increase and utilizing those excess franchise fees. Councilmember Holden said we haven't agreed to the nine FTEs. Councilmember Monson asked if this would be a placeholder for nine FTEs. In the event it stays at six it may decrease. Finance Director Yang said six is the agreed upon number but the proposed amount includes the nine. Councilmember Monson asked if Staff needs direction on if we want to do the $12,000 vs. franchise fees. Finance Director Yang said these are options the City Council can consider. The PIR Fund has a proposed levy of $250,000. That is unchanged from 2025. Staff is recommending scenario D which would shift PMP projects and increase the levy by $50,000 in 2027, with that increase