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<br />. <br /> <br />. <br /> <br />t.:: <br />:'.~:"..,..:;;..:: <br />....:;>>".. '~<\:':. <br />,. "" ",., <br /> <br />~~ILLS <br /> <br />MEMORANDUM <br /> <br />DATE: <br />TO: <br />FROM: <br /> <br />AGENDA ITEM: 2A <br /> <br />June 13,2005 <br /> <br />SUBJECT: <br /> <br />Mayor and City Council ..JJJ1. <br /> <br />Michelle Wolfe, City Administrator ~ <br />Murtuza Siddiqui, Finance Director '"W\S <br /> <br />Lake Johanna Fire Department Funding <br /> <br />The Lake Johanna Fire Department Board of Directors has been studying the issue of fire <br />department funding for about a year. Historically, the way that funds were budgeted and the way <br />the capital equipment was purchased was complicated, inconsistent from one city to the next, and <br />difficult to understand and explain. There have also been questions about whether or not it has <br />been an entirely equitable process. <br /> <br />Historically, for the operating budget, the City of Arden Hills has been paying about 25% of the <br />cost. North Oaks has been paying 12.5%, and Shoreview has been paying 62.5%. <br /> <br />Recently, the Fire Board reached consensus and approved a new approach for budgeting fire <br />department expenses. For the 2006 budget, operating expenses will be based on a new formula. <br />Many different options were reviewed. (See attachment.) The formula ultimately approved by <br />the Fire Board is based on four factors, with weights assigned as follows: <br /> <br />Population 25% <br />Households 25% <br />Market Value 10% <br />Fire Calls (using a five-year average) 40% <br /> <br />Under this formula, the City of Arden Hills will pay 26.3% of the total budget, North Oaks will <br />pay 13.7%, and Shoreview will pay 60.0%. Therefore, this is not a significant shift. However, <br />the amounts are based on a formula which can adjust to various changes in the future as they <br />relate to the four factors. Therefore, each community's share does not have to be renegotiated <br />when growth or changes in the number of fire calls occur. The Board has indicated that it <br />intends to review the formula each year in the development of its annual operating budget. <br /> <br />To help illustrate how this formula will affect the operating budget, the following table shows <br />. what the impact would be if the formula were applied to the current 2005 budget: <br />