Agenda - Council Work Session - 05/01/2012

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standardized. These issues will not have to be done immediately for this joint agreement to occur, but will need to be planned for and budgeted to accommodate. VI. Cost Share Methodology Usually when local governments provide a service to the community, that community bears the entire financial burden and everyone within the community benefits from that service. The full cost of providing such service is not easily determined because administrative, legal and support expenses are frequently absorbed into the city's overall operational costs. When more than one community share in providing emergency services the cost of providing such service may seem greater because the absorbed costs is now accounted for. Elected officials must assure that each community, assume its fair share of the cost; Thus, acting in the best interest of their respective communities. Studies from other regions with shared service agreements have indicated that it is imperative to look at the long term economic impact to determine a cost share methodology in order to ensure long term success of a Shared Fire Services group. The study group believes that due to the enormous flexibility of the available cost share formulas, a suitable formula can be established to achieve the goals of a Joint Fire Service Area. It is however, imperative that shared goals and objectives are established within the cost share methodology prior to establishing a suitable cost share formula. A more in depth study and information must be gathered in order to accurately assemble a comprehensive cost share methodology and a subsequent cost share model. In general, a cost share methodology should include the following factors: • Determine the goals and ideals each community has related to shared services • Keep cost apportionment formulas fair, simple and logical to ensure the public accepts and supports the endeavor • Analyze and set long term benefits • Anticipate the future expansion of shared services • Determine which factors should be used within a cost share formula Those who benefit from a service should pay in direct proportion to the level of benefit. However, social and political concerns may also enter the price -setting process. Therefore, the task of determining a cost share formula will likely take a great deal of analysis and negotiation. A number of elements to be considered within a cost share formula may include any combination of the following: Population Based on the U.S. census, the residential population of a given service area can be proportioned to determine service benefits. 12