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AGENDA ITEM — 3C -t1 DEN HILLS MEMORANDUM DATE: April 8, 2024 TO: Honorable Mayor and City Councilmembers FROM: Dave Perrault, City Administrator SUBJECT: Lake Johanna Fire Department Station Update Budgeted Amount: Actual Amount: Funding Source: N/A N/A N/A Council Should Consider Council will receive an update on the Lake Johanna Fire Department Station planning. Backl4round For the past few years, the Lake Johanna Fire Department (LJFD) has been in discussions with its three cities, Arden Hills, North Oaks, and Shoreview, on a new fire station. This project was the result of a needs study done in 2018 (link to needs study: https://cilyofardenhills.org/DocumentCenterNiew/3538/LJFD-Needs-Assessment?bidld=). The study identified a piece of property on Pine Tree Drive in Arden Hills as the ideal location. Since the study, the department and the cities have acquired the land and completed the design of the station. The department and cities also worked cooperatively to receive $6.6 million in State funding for the station construction. The board is recommending the station be constructed in 2025, and next steps are to figure out how to finance the station. Early estimates of the station in 2018 put the cost around $13 million, today the cost is estimated to be between $20 million and $25 million in total. Currently, Arden Hills' share of expenses for LJFD are approximately 25 percent; the City's share of the project would be the total, less State funding, and we would be responsible for 25 percent of the costs. For example, if the station were to cost $23 million, the cities would be responsible for $16.4 million and the AH share would be $4.1 million. In order to unlock the State money, the cities need to decide and have secured their share of the project. It is anticipated that bonding will be need for the project, and the question remains how will those bonds be structured i.e. one city bonding for the entire project and the other cities agreeing to pay that city their portion of the debt service or each city individually bonding for their share. The advantage of having one city bond for the project is it would lower initial issuance cost of the bonds, the cities could take advantage of a low interest rate (Arden Hills and Shoreview are both AAA rated), and it would streamline the debt service payment coming from one City for the bonding versus three. The City Attorney has looked at how an agreement could Page 1 of 2