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n-7 <br /> '7 / <br /> • <br /> Fire Department Memorandum <br /> To: Mayor McCarty <br /> From: Nyle Zikmund, Fire Chief <br /> Date: April 23, 1997 <br /> Re: Follow Up on MAC Truck Agreement <br /> Please accept the following information as follow up to your questions and concerns raised at the <br /> Monday night workshop. <br /> 1. We have had some type of agreement with MAC since 1972 and have been responding as such. We <br /> experience an average of 3 calls a year onto the property with a prolonged (4 or more hours) incident <br /> about once every two years. <br /> 2. Engine 11, which is housed at Station Five is due for replacement in 1998 and was on the capital <br /> 4, budget for funding with $75,000 to be appropriated this year to pay for the chassis and the remainder to <br /> be appropriated in 1998. Mounds View's budget share would have been about $60,000 for the entire <br /> project. <br /> 3. MAC may elect to put a super foam system on the truck raising the cost to $320,000. If we were to <br /> purchase the truck it would be closer to $300,000. In either scenario, the fire truck becomes the property <br /> of the cities as defined under your Joint Powers Agreement. <br /> 4. Working with Finance Director Kessel I came up with the following figures. The $1,000 per month <br /> we are currently receiving would have a present day value of$115,000 over the fifteen year period during <br /> which we will provide protection in exchange for the truck. To pay off the truck in the same fifteen year <br /> period on a monthly basis would require a $2,600 monthly payment for a total of$468,000. All numbers <br /> assume a 6.5% interest rate. <br /> 5. With respect to the depreciation concern I talked with Bruce and our department accountant. The <br /> private sector does depreciate capital good's as allowed by the IRS to cover the cost of doing business. <br /> The public sector typically does not depreciate equipment and buildings, rather; a capital improvement <br /> plan is implemented to address the needs. <br /> I hope this addresses your concerns and should you have any further concerns, please do not hesitate to <br /> call if I can be of assistance. <br /> • <br />