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ARDEN HILLS CITY COUNCIL WORK SESSION — NOVEMBER 10, 2025 6 Discussion ensued regarding earlier comments that removing the $180,000 for gateway signs would lower the levy. Staff said we are not allowed to move EDA Funds and put them in the PIR Fund. The sign funding will not resolve the shortfall in the PIR Fund. Councilmember Holden summarized all of the ways that residents will see rising costs. To levy residents at the 18% isn't proper. Councilmember Weber said budgeting money for the PIR Fund is an attempt to fix the projected shortfall that we are expecting. Five years down the road we are looking at a $7 million shortfall. We must start planning for that now. Councilmember Monson is open to discussing if the gateway funds should be held in 2026 but it wouldn't have a levy impact. She is open to a lesser amount to the PIR Fund. She said there is $750,000. That will drop very quickly if we do the signs. There is no plan for the EDA yet. One levy point is $60,000. She would be open to put $40,000 into the PIR. That would drop one levy point but still add to the PIR. She would like to wait to see what the EDC says before eliminating the funds for the signs. Councilmember Holden asked if there will be a surplus at the end of Fiscal Year 2025. Finance Director Yang said preliminarily she is anticipating about a $500,000 surplus. Mayor Grant said this may not be the year for the $100,000 in the EDA Fund, given all the other levy amounts. He can see reducing or eliminating the PIR excess. He said there was $122,009 of unfunded levy costs from the previous year. He asked if Staff had looked at the projected 2025 General Fund spending. Finance Director Yang has not done a deep dive on that. She is hesitant to share what she has looked at, as there are some key pieces missing from that data. She said to level set everyone in 2023 our Fund Balance Policy of 50%, we were at 47.4%. In 2024 we were at 45.4%. We need to make up for those. Mayor Grant said if you project 2025, are we running a surplus or a deficit in the General Fund? Finance Director Yang said the $500,000 surplus is her estimate. Mayor Grant said that is not to be confused with Capital which is also $500,000. We haven't finished the year and there are more things to look at. He said $450,000 to $550,000. Either way, it's a sizable number. He said we have covered the $122,009 easily. If our levy is $1 million, would mean we need to have $500,000. He is hearing we are already pretty close to that this year, which means if things pan out, we'll be pretty close to the 50% by the end of the year. He asked if that is conceivable. Finance Director Yang confirmed. Discussion ensued regarding page 5 of the agenda memo stating the 18.32% vs. the 16.88% on the next chart, which would be a zero budget. The average median household would see a difference of $20.00 per year.