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Page 4 of 12 2019 2.50% 2.50% 2018 2.10% 2.25% In 2025, the City hired David Drown and Associates (DDA) to conduct a comprehensive study of its compensation and classification structure. As a result of their work, changes were made to the City’s wage schedule, and several non-union employees received job reclassifications. These changes maintain the City’s competitiveness in the marketplace, putting the City at a 108% market value or 8% above market value. Additionally, union employees negotiated a new three-year contract. There is a 15.0% increase assumed for health, a 4.0% increase for dental, a 0.0% increase for life insurance premiums, and a $15,000 placeholder for the City’s share to implement the MN Paid Family Leave required per State legislation for every employer. The number of positions included in the budget increased by 1.0 full-time equivalent (FTE) relative to 2025 based upon Phase 2 of the proposed Public Works organizational structure and staffing changes. Public Safety 2026 budget information was received from Ramsey County and the Lake Johanna Fire Department for public safety. POLICE The police contract is expected to increase by 13.2% or $231,220 for 2026. Information provided by Ramsey County on this increase is as follows: The major cost drivers include:  Competitive wages as a result of labor contracts and increased costs related to employee health insurance (i.e. increased paid parental leave, new state law for paid medical leave). The RCSO has stated that 2026 should be viewed as an adjustment year as employee compensation was brought in line with neighboring local governments after a significant lag.  Increased costs related to county fees for insurance and administrative overhead/indirect costs. DISPATCH Dispatch costs will increase by 17.4% or $12,780 for 2026. FIRE The fire operating costs are expected to rise by 17.6% or $159,231 for 2026. This is mainly due to the addition of 9 full-time staff (6 fire captains and 3 firefighters), which is an increase of 3 FTEs in 2026; step, COLA, and market adjustments; and an increase in repairs and maintenance, all of which Arden Hills’ cost share portion is 24.4%. Please note, the SAFER grant will discontinue starting in 2027 and contract cities will need to fund the new positions. In 2024, the City decided to raise the levy in the Public Safety Capital Equipment Fund each year to build up a reserve for this (see chart below), in order to lower the impact of the annual levy increases. The annual levy increase for the first 4 years would be set at $40,000 and increase to $58,284 in 2030, then taper down starting in 2031.