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HomeMy WebLinkAboutCCWS 06-12-2006 ~ . /],\~HILLS Approved: June 26, 2006 CITY OF ARDEN HILLS, MINNESOTA CITY COUNCIL WORK SESSION JUNE 12, 2006; 9:07 P.M. ARDEN HILLS CITY COUNCIL CHAMBERS CALL TO ORDER Mayor Aplikowski called the mecting to order at 9:07 p.m. Present: Mayor Aplikowski, Councilmembers David Grant, Brenda Holden, and Gregg Larson. Absent: Councilmember Vincent Pcllegrin (excused). . Staff Present: City Administrator, Michelle Wolfe; Chief Finance Officer/Treasurcr, Murtuza Siddiqui; Community Development Director, Karen Barton; Firc Chief, Tim Boehlke; Assistant Fire Chief, Ralph Adair; and Recording Secrctary, Kathleen Altman. LAKE JOHANNA FIRE DEPARTMENT CAPITAL BUDGET FINANCING Ms. Wolfe stated 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 expenscs wcre based on the new formula. The Fire Board was now considering a proposal to apply the new operating budget formula to capital cquipment purchases. (Station maintenance and repairs would remain under the current formula outlined in staffs report.) There were many reasons for considering this change: . The current process for funding capital equipment is inconsistent, difficult to understand, and difficult to explain. . It was very difficult to document how much each City had contributed to equipment purchases in the past. . Thc 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 needed to be funded. --- ARDEN HILLS CITY COUNCIL WORK SESSION - JUNE 12, 2006 2 . . It was not always clear to whom the equipment belongs: To a specific city or cities, to the Fire Department, or to a combination of both? . Because it was not clear who the equipment belongs to, it was not clear who should keep proceeds from a sale. . This system docs not acknowledge the reality that while a piece of equipment may be housed in a certain station, the reality is that aU equipment was available to respond to caUs in all three cities, and they are used in aU three cities. Under the new formula, the following advantages would result: . Capital expenditures would be more "even" over time and large peaks could be avoided, aUowing for easier financial planning and budgeting. . AU equipment would clearly be assets of the LJFD and its member cities based on a clear financing formula. . This would acknowledge that all LJFD equipment is used in aU three member cities. . The funding formula would be consistent, easy to understand, and easy to explain. She requested Council provide direction to staff and the LJFD liaison regarding capital equipment financing. The LJFD Board of Directors would meet again in July and would be discussing the proposal. Council direction was needed as to whether or not the City would support this proposed change, so that can be conununicated to thc Board. . Couneilmember Larson stated it did not make sense to try and divide up the capital investment among the Fire Department like they did in the past. He indicated the Fire Department served all of the Cities and he looked at this as a positive development and believed it would make things a lot easier in the future in determining what each Cities share was. Couneilmember Holden asked what would happcn if one City was not willing to contribute to a piece of equipment, or did not have the resources to pay their share. Chief Boehlke, responded that happened under the old funding plan. He noted when that occurred, they put off the purchase until a future date. CouneiImember Larson responded the Board tricd to operate by consensus, which was a good thing. A representative of the Fire Department stated their equipment needs did not change much and they knew years in advance when equipment would need to be replaced. Couneilmember Larson noted at some point the cities would have to pay Shoreview back some money because they had purchased the largest share of equipment. He indicated one way to do that was when the next truck was purchased, the City of Arden Hills and the City of North Oaks would pay a larger share than the City of Shoreview. He stated then the trucks would be owned by all three Cities as a whole and the only thing that was left were the buildings. Couneilmember Holden stated she objected to the formula and to paying back to Shoreview for . purchases made in the past. Couneilmember Larson stated Council had discussed and voted on the formula for the operating budget and when they weighted all of the factors, thcre was very ARDEN HILLS CITY COUNCIL WORK SESSION - JUNE 12, 2006 3 . little difference in the final percentages. He stated with this formula it explained how they calculated the percentage. Couneilmember Holden asked why they were changing the formula now. Chief Boehlke replied this was to even everything out and to make it easier to explain how everything was calculated. Couneilmember Larson noted even if a truck was purchased by Shoreview, it not only serviced Shorevicw but all three Cities benefited from the truck purchase. Assistant Fire Chief Adair stated they were trying to eliminate one City having to purchase a truck and all equipment would be owned by all of the Cities. Couneilmember Larson stated right now they needed direction as to whether they should use a standardized formula and a future memorandum would be prepared showing a detailed breakdown on what vehicles and equipment was purchased witl1 what money. Couneilmember Holden stated she did not see any problem with the formula, but before they started going rctro, she wanted to see a detailed spreadsheet and have a discussion regarding this. Couneilmember Larson noted they would also need to discuss the Fire Department putting some money into Station 2, which meant Arden Hills had put in somc money into that station even though it served North Oaks and Shoreview and therefore, there should be some refund of . money for this station. Council agreed they were comfortable with the capital improvement formula for future capital equipment purchases. The meeting adjourned at 9:47 p.m. 4~li~' ~~~;)o/< Mayor City Administrator .