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��iii._ <br />MEMORANDUM <br />DATE : January 11, 2010 <br />TO: Mayor and City Council <br />FROM: Sue Iverson, Acting City Administrator <br />SUBJECT: Lake Johanna Fire Department Capital Expenditures <br />BACKGROUND <br />The City has received two invoices from the Lake Johanna Fire Department (LJFD) for capital <br />expenditures in 2009 and 2010. One is related to the purchase of a demonstrator ladder truck <br />with financing over three years. The other is related to the replacement of Car 1, which is used <br />by the full-time Fire Department staff, and the reimbursement of the City of Shoreview for their <br />payment of more than their share of past capital expenditures. At the December 14, 2009 City <br />Council meeting, the City Council tabled these items to be brought back with further clarification <br />before being approved. <br />Ladder Truck <br />In 2008, the Lake Johanna Fire Department purchased a demonstrator ladder truck with <br />financing over a three year period. Attached is an invoice in the amount of $55,975.00, which is <br />the City's share of the second of the three annual payments, this is included in the 2010 capital <br />budget. (Note on the attached Capital Budget the total amount per year for this truck payment is <br />$199,912 and appears as L-3 at the top of the 2010 column of Attachment B.) <br />Chief s Vehicle or Car 1 <br />In 2009, the Lake Johanna Fire Department purchased a new car for a"Chief's vehicle". The <br />actual cost of this vehicle is $44,400.16, while the budget was $41,000. Arden Hills' portion of <br />thls expense is $12,609.65 based on the cost allocation percentage in 2009 of 28.4%. (Note on <br />the attached Capital Budget the total amount budgeted for this vehicle was $41,000 and appears <br />as C-1 at the top of the 2009 column of Attachment A.) <br />Capital Reimbursement <br />In 2004/2005, the Cities who participate in the LJFD fire service reviewed the past funding of <br />capltal expenditures, and put in place the current cost allocation formula for capital expenditures. <br />As part of that process, it was determined the City of Shoreview had paid more than its fair share <br />of past capital expenditures. It was determined that this overpayment would be remedied <br />through a reimbursement to Shoreview by the Cities of Arden Hills and North Oaks over a five- <br />year period. During this period, when significant capital expenditures are funded, a portion of <br />the Shoreview share of the expenditures will be paid by the Cities of Arden Hills and North <br />