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Description Effect on Levy Step Increases 54,161 3% COLA Adjustments 45,448 Public Works Staffing Phase 2- 1 Lead (Jan 2026 Start) 3,322 Rec on the Go 8,100 Health Insurance/Work Comp Benefits/MN Paid Leave 42,836 Personnel Costs 153,867 The levy increase needed to cover personnel is $153,867. General Fund The General Fund is the primary operating fund of the City, and its main source of revenue is property taxes. The 2026 revenue budget is projected to increase by 12.7% or $845,388 over 2025 to $7,484,658. The main reason for this increase is a proposed property tax increase of $853,203. Expenditures are projected to increase by $723,378 over 2025 to $7,484,657. The increase is primarily driven by public safety and personnel costs. • The police contract is expected to rise by 13.3%, or $233,475 for 2026. Major cost drivers include labor contracts and increased costs related to employee health insurance, with 2026 being viewed as an adjustment year, as employee compensation was brought in line with neighboring local governments after a significant lag; and increased costs related to county fees for insurance and administrative overhead/indirect costs. Dispatch costs will increase by 17.4% or $12,780. The fire operating costs are expected to rise by 17.6%, or $159,231 for 2026. This is mainly due to the addition of 6 full-time captains; addition of 3 FTE's, step, COLA, and market adjustments; and an increase in repairs and maintenance, all of which Arden Hills' cost share portion is 24.4%. The levy increase needed to cover police and fire services is $405,486. Special Revenue Funds The City has five special revenue funds with activity in 2026 that finance various activities with restricted revenues. The allocation of property tax dollars is $50,000 for the EDA General Fund, an increase of $50,000 from 2025. None of the three Tax Increment Financing Funds currently receives tax increment revenue. TIF #3 and TIF #4 have been decertified and have funds available for future eligible projects. TIF #5 was established at the end of 2019. Capital Proiect Funds The Council has previously reviewed the 2026-2030 CIP. Much of this information is reflected in the capital funds of the City. The allocation of property tax dollars is proposed to remain unchanged for the Equipment and Building Replacement Fund at $100,000, increase by $180,000 for the Capital Improvement (PIR) Fund, and increase by $52,000 for the Public Safety Capital Fund. Page 3 of 7