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ARDEN HILLS SPECIAL CITY COUNCIL WORK SESSION — JULY 28, 2025 7 we can use to bond for other projects. She said based on the proposed Fund Balance, the bonding would be most beneficial in 2030 when we have the need. Councilmember Monson asked if we can bond to reduce the levy. Finance Director Yang confirmed. Bonding is there to provide a standard debt service schedule vs. levying for an entire project. We are leveling the tax impact vs. levying the whole thing. Councilmember Monson said that is what she is trying to understand. We need to dig deeper into the CIP and the General Fund requests to see where costs can be reduced. She would like to know if there are things that will help this year and in the next years to support us down the line. Mayor Grant said we are going to run a surplus of about $165,000 for the fire station annually. He expects the first change order to be sizable. According to Staff, the change order is going to be $775,000. Councilmember Monson thought there was a contingency built in so that won't be on top of the amount due, it will just eat into the contingency. Councilmember Holden said the contingency is $1.2 million. City Administrator Jagoe confirmed. She said with the change orders, to date, they are probably close to $1 million. Mayor Grant said we need to assume those are going to be coming and the contingency is there. We got hit by one big change order. The other items that happen during construction will still happen. We need to be prepared for $350,000 as our share above the contingency based on the fact that the first one was so sizable. The $165,000 is for the fire department. He wants to use that to cover any change orders above the contingency. He asked if the bonding requests covered the contingency. Finance Director Yang confirmed. Mayor Grant said we will need to bond for TCAAP. It will be big, like the fire station. One of the things we learned with the fire station is that a 15-year bonding cycle, $3 million costs about $4 million. If the answer is to bond, we want to look at the levy and ask how much we want to tax. As City Council we can decide which items are wants that can be pushed to another year. We don't want to just bond everything because that will be more expensive. Councilmember Holden wants to know how much the levy increase would be vs. the savings if we pay off the bonds. We need that comparison before we decide not to pay off the bond early. Finance Director Yang will do that analysis and bring it back. Mayor Grant said she did the analysis at one point. It wasn't as much as he thought it would be. Finance Director Yang doesn't think she looked at the levy impact with that analysis.