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ARDEN HILLS CITY COUNCIL WORK SESSION — NOVEMBER 24, 2025 6 Mayor Grant said at one point he thought it was, we'll have to see. Unless Director Swearingen can shed any light on some favorable variances. Councilmember Holden would like to address the point. She asked why she wouldn't be allowed to call Director Yang and ask a question on the budget without Councilmember Weber knowing exactly what she is asking. Councilmember Weber said we aren't talking about asking questions about the budget. We're talking about having a closed door meeting with Staff and preparing information that is dispersed to Council for discussion after. This should be something that should go through the City Administrator to Staff who would prepare the memo and bring us their unbiased clear opinion. It shouldn't be prepared by a Councilmember. It allows for bias, or the appearance of it. Mayor Grant said he talked to Director Yang but he also mentioned it during a Council meeting that he wanted this information. He is stating, at a public meeting, that we need to review our capital. Councilmember Monson said she also asked for this information. The entire Council got the email about the extra $1 million. Councilmembers were asking for information in order to have this conversation at a work session. If Staff didn't prepare this memo we would be in a different spot. Mayor Grant said he would prefer to use the surplus to pay for items like the permit software conversion. It would lower the levy and would move the goal post closer when we're trying to reach 50% of a number $60,000 higher. He said there is another one-time software migration that would qualify. His assumption is that all of the 2026 proposed operating costs have been identified. He said there is a category for underfunded levy costs from the previous year. He asked staff if we actually write a check for that. Finance Director Yang said we are asking to increase the levy by that amount. It is a structural funding gap from 2025 that continues to play into 2026. Mayor Grant said he asked earlier if all of the costs in 2026 had been identified to get us where we need to be and Director Yang said she had identified all of those costs. Finance Director Yang said the structural gap comes when we look at revenue minus expenditures. Our revenue includes property taxes and other miscellaneous revenues. That number does not cover total costs of the City. It is underfunded. The total costs are underfunded by $122,000. Mayor Grant said that was the previous year. Finance Director Yang said it's a carry forward. Last year the revenues were below the expenditures by $122,000. That was a structural gap that will continue to flow into 2026. When we look at the 2026 budget, for example, if we say revenues are increasing by $100,000 our expenditures are also increasing by $100,000. That's been captured. The levy from the prior year was lower so that becomes the new base. So, we start at a lower base in 2026. There is a gap that needs to be levied.