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ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION — AUGUST 25, 2025 27 being applied annually, thereafter. She asked which changes, if any, Staff should assume based on the scenarios presented. She will run the requested scenarios. Finance Director Yang said the Public Safety Capital Equipment Fund assumes a $52,000 levy increase in 2026 and additional increases in subsequent years, thereafter to cover the City's share of nine FTEs. She asked what changes, if any, Staff should assume. Councilmember Rousseau thinks it needs to go into the levy. She knows we discussed the franchise fees going strictly toward the Fire Department but she feels there should be a separation that is clear that when we have a double digit levy, half of it comes from Public Safety. That may be a communication thing in the future. Councilmember Holden asked how much the franchise fees would have to be increased by? Finance Director Yang doesn't have that number today. She has asked Xcel Energy and she will follow up. Councilmember Holden asked how much we are raising with the franchise fees now, annually? Finance Director Yang said $435,000. Councilmember Holden said that wouldn't really be that much. Councilmember Monson said it isn't clear that we would have to raise the fees. Wouldn't we just use the excess. She asked where the excess between the bond and the $435,000 is allocated in the budget. Finance Director Yang said it is in the Public Safety Capital Equipment Fund. Councilmember Monson asked how it's being applied. Finance Director Yang said it isn't being applied anywhere. It is just sitting there until debt service comes in 2027. It will be used to pay that debt service. Councilmember Monson said we could use that for the extra $12,000. Finance Director Yang confirmed the excess money could be used. Councilmember Monson said that is limited in terms of impact, and we will still have the money in 2027 for the debt service. Finance Director Yang confirmed. She said the difference between using excess franchise fees and increasing the levy incrementally, is that you are increasing that base. That grows the cumulative levy balance where the franchise fee is a fixed amount annually. Councilmember Weber asked if the beginning year balance is the Public Safety Fund. It refers to a Fund Balance. That can't be the Public Safety Fund because it would include an additional $435,000 in contributions.