CCP 09-18-2006 - Laserfiche WebLink

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- - - ~ ~HILLS MEMORANDUM DATE: September 18, 2006 WORK SESSION ITEM 2A TO: Mayor and City Council Michelle Wolfe, City Administrator ~ Fire Department Capital Financing FROM: SUBJECT: Council last discussed this topic during a June 12 work session. Most of the information below was provided to you at that time, but a few updates have been added. I have attached a draft of the proposed LJFD capital budget. This draft was prepared using the same formula that was implemented for the operating budget, in order to illustrate the impact ofthe formula, BACKGROUND The Lake Johanna Fire Department (LJFD) Board of Directors met on May 31, 2006, One of the main discussion points was capital equipment financing. Last year a new formula was adopted for the LJFD operating budget expenses, In the 2006 budget operating expenses were based on the new formula. The formula is based on four factors, with weights assigned as follows: Population 25% Households 25% Market Value 10% Fire Calls (using a five-year average) 40% Under this formula, the City of Arden Hills pays 26.3% of the total budget, North Oaks pays 13.7%, and Shoreview pays 60.0%. The amounts are based on a formula which can adjust to various changes in the future as they relate to the four factors. Therefore, each community's share does not have to be renegotiated when growth or changes in the number of fire calls occur. These figures will change, per the formula, as follows for the 2007 operating budget: Arden Hills 27, I %, North Oaks 13,5%, and Shoreview 59.4%. The Board has indicated that it intends to review the formula each year in the development of its annual operating budget. HISTORY Researching how various capital items have been paid for within the Fire Department is a difficult process. Items that have been purchased in the last 10-15 years are fairly easy to