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ARDEN HILLS CITY COUNCIL - December 10, 2007 5 Councilmember Grant clarified the difference in real terms is approximately $13,855, which is not an overriding amount. He questioned, given the decrease, how this would happen. Finance Director Iverson replied it is because when any new development comes it causes an increase to the tax base, the City must increase the tax levy to incur additional revenue. Councilmember Grant stated setting up a 4.6% levy is beneficial to the City. Councilmember McClung stated a new Deputy Clerk position is part of the budget and assumes it is for the entire year, it takes time to hire this person, and the full amount would not be required. City Administrator Wolfe replied the estimate was on a full year salary. She stated it could balance itself out should they hire someone at a higher salary than the estimated amount. MOTION: Councilmember Grant moved and Councilmember Holden seconded a motion to Approve Resolution 07-75, a Resolution Adopting the Proposed 2008 Budget in the Amount of$9,331.559. Councilmember Holden stated she is in favor of the budget because it is such a small difference between the 4.0 and 4.6 percent amounts. She commented on the hiring expenses for the City Administrator, paying for an interim City Administrator, and other positions forthcoming. She stated she could see where the $13,000 is already eaten up. Councilmember Grant stated that when they met to take a first cut at the levy. He stated he could not support a 6% levy at that time. He believes the 4.6% level is reasonable. Mayor Harpstead spoke in favor ofthe 4.6% levy. Councilmember Grant commented on the vacancy rates of businesses that impact the overall taxing ability of the City. Councilmember McClung stated he would vote against this as the City has a healthy General Fund balance, which is well within what the state auditor recommends. He commented that 4.0% is reasonable when the impact to taxpayers is considered. Mayor Harpstead noted that staff did advise Council at the time of the contingencies that a compensation adjustment would need to come out of that number. Councilmember Holden questioned what the auditor recommends the Fund Balance rate to be. Finance Director Iverson replied it is usually 35 to 50 percent of the next year's expenditures. Councilmember Holden asked if this would result in not having to amend the budget during the year. She questioned if the adopted budget in the past was more than what the actual budget was. Finance Director Iverson commented she believes it is usually excess revenues over expenditures. Councilmember McClung questioned what was the amount added to the 2007 budget. Finance Director Iverson replied the previous budget amendments included the comprehensive plan