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<br /> ~ <br /> 'L'\~HILLS . <br /> MEMORANDUlVl <br />DATE: September 18. 200C> WORK SESSION ITEM 2A <br />TO: \:layor and City Council <br />FROM: IVlichelle \-Volfe. City Administrator <br />SUBJECT: Fire Departmcnt Capital Financing <br />Council last discussed this topic during a Junc I2 work session. Most of the infonnation below <br />\vas provided to you at that time, but a few updates have bcen added. I havc attached a draft of <br />the proposed LlFD capital budgd. This draft was prepared using the same formula that was <br />implemented tiJr the operating budget. in ordcr to illustrate the impact of the formula. <br />BACKGROUND <br />Thc Lake Johanna Firc Department (UFO) Board of Directors mct on May 31,2006. One of the . <br />main discussion points was capital equipment financing. <br />Last year a new formula \vas adopted tor the LlFD opcrating budget expenses. In the 2006 <br />budget operating expenses were based on the new formula. The formula is based on four factors, <br />with weights assigned as follows: <br />Population 25~'() <br />Households 25% <br />Market Value 1 O(~/O <br />Fire Calls (using a five-year average) 40o/t, <br />Under this formula, the City of Arden Hills pays 26.3% of the total budget, North Oaks pays <br />13.7%, and Shorcview pays 60.0%. The amounts are based on a formula which can adjust to <br />various changes in the future as thcy relate to the tl.lUr bctors. Therefore, each community's <br />share does not have to be renegotiated when growth or changes in the number of fire calls occur. <br />Thesc tigures will change, per the tormula, as follows for the 2007 operating budget: Arden <br />Hills 27.1 (~/;), North Oaks 13.Y~'O, and Shoreview 59.4%. The Board has indicated that it intends <br />to review the fOI111Ula each year in the developmcnt of its annual operating budget. <br />HISTORY <br />Rcsearching how various capital items have been paid for within the Fire Department is a . <br />difficult process. ltcms that have been purchased in the last 10-15 years are fairly easy to <br />