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ARDEN HILLS CITY COUNCIL WORK SESSION — NOVEMBER 24, 2025 8 Councilmember Monson understands we have to wait until 2026 because we don't have the money until after the final audit. She wants some to go into the general fund and she wants to lower the levy. She is trying to understand how much Staff needs to allocate the money towards a certain bucket that would help the public understand what we're intending to use the savings for. Finance Director Yang said she made the one-time cost recommendations. She is comfortable using it for those one-time costs. It can also be used to replenish the general fund. It is up to Council to determine how to use the remaining surplus, if there is any, when the audit is complete in June/July. Councilmember Holden said if we're at $900,000 and our budget deficit is $122,000, why don't we make a budget adjustment and we won't have that budget deficit. Finance Director Yang asked what is the recommendation for the budget adjustment. Is the recommendation that we lower our costs for 2026? Councilmember Holden agreed. She would have a hard time telling residents that we over - levied them last year. We still have to put in the 50% for 2026, whatever that is. It wouldn't include the $122,000 and give us additional money to put elsewhere. She said we can purchase the permit software this year and it would come out of the $900,000. Finance Director Yang confirmed. Councilmember Holden said we can spend it this year and it will lower the final surplus. Finance Director Yang confirmed. Councilmember Holden thinks it's better to utilize some of the money now for the one-time costs. She still would like to see a budget adjustment to get rid of the $122,000. The expenditures weren't there. Mayor Grant said when we look at how we got here, we got some extra permit revenue, staff savings and a variety of other things that went into that $900,000 figure. Those revenue and savings are already in the door. If we need to make a budget adjustment so the $122,000 goes away, then we do a budget adjustment. Then the budget will be spot on and no longer underfunded. We can designate a certain amount of money to leave in the budget because we know we'll spend it. Councilmember Weber wanted to know how the $500,000 capital shortfall will impact that $900,000. Finance Director Yang said we have $900,000. There was some additional spending that was not anticipated in the forecast, provided to Council during earlier budget discussions. She is showing the fund balance in the PIR Fund will be reduced by $532,000. Councilmember Weber said it won't effect the levy directly. Finance Director Yang confirmed. It will just reduce the overall projections.