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percentage of this equipment. In addition, Engine #3 was refurbished in 1997, with costs paid by the Fire Depmtment. Fire Engine #2 was refurbished in 2001, with costs split by North Oaks and . Shoreview. Most of the other major equipment items have been purchased over the years based on the old formula. Essentially, the equipment was paid for by the City where the piece of equipment would be "housed". For example, if a piece of equipment was "housed" at Station #1, Arden Hills was responsible for purchasing it. However, even this formula was not consistently followed, A taJ1ker purchased in 2002 was split among all three cities. Cars for use by LJFD staff were split among all three cities. When a three-way split was used, it was based on the old formula (Arden Hills 25%, North Oaks 12,5%, and Shoreview 62.5%), Analysis has been done to estimate as closely as possible historical spending for capital equipment, to determine if each City has paid its "fair share". Using the concept of the formula, there would need to be some "catch up" by Norlh Oaks and Arden Hills. Two mechanisms for catching up have been discusscd if the new formula is implemented. One possibility is direct reimbursement from the two cities to Shoreview. Then, the three cities would reimburse the LJFD for their appropriate sharcs of a used engine that was purchased last year. This purchase was to be financed via the sale of a commaJ1d vehicle (sold in November 2004) aJ1d a split between the cities for the balaJ1ce. The reimbursement from the cities to the Fire Department General Fund was delayed until the cities worked out a cost sharing arrangement for capital purchases. The other option would be for Arden Hills and North Oaks to split the cost of the used engine (based on each city's share of "catch up") and reimburse the LJFD General Fund direct! y. CAPITAL FINANCING FOR BUILDINGS (FIRE STATIONS . Buildings and repairs have been paid for by each City according to the following formula: AH Station 1 SV Stations 3, 4 and Y2 Station 2 NO Y2 Station 2 DISCUSSION The Fire Board is now considering a proposal to apply the new operating budget formula to capital equipment purchases. (Station maintenaJ1ce and repairs would remain under the current formula outlined above,) There are maJ1Y reasons for considering this change: . The current process for funding capital equipment is inconsistent, difficult to understaJ1d, and difficult to explain. . It is very difficuIt to document how much each city has contributed to equipment purchases in the past. . The current system subjects member cities to large ebbs and flows in capital spending from year to year, depending on whether or not a large piece of equipment needs to be funded. .