CC 2020-07-14_10b Approval of 3rd Amendment to FCFA JPA_PPConsider Approval of
Third Amendment to the
Joint Exercise of Powers Agreement
for the Five Cities Fire Authority
7/14/2020
1
Background
Five Cities Fire Authority (FCFA) formed in 2010
City of Arroyo Grande, City of Grover Beach, Oceano Community Services District (OCSD)
Joint Exercise of Powers Agreement – executed July 2010
FCFA provides fire and emergency response services to the three communities, their approximately 40,000 residents, and to their businesses and visitors
7/14/2020
2
Background
Strategic Plan adopted by FCFA Board – 2017
Identified equipment, infrastructure, and staffing needs
Memorandum of Agreement entered into by the three communities in May 2018 (First Amendment)
Specific Funding obligations for FY2018-19
Meet and Confer obligations to determine additional changes to JPA
Second Amendment to JPA Approved June 2019
7/14/2020
3
JPA Second Amendment
Highlights:
Revised Funding Formula (Final Revised Formula)
Transitional Funding Formula
Fixed contribution amounts identified using this transitional formula for FY2019-20
7/14/2020
4
7/14/2020
5
7/14/2020
6
JPA Second Amendment
Highlights (continued):
OCSD special tax measure required during the primary election in 2020
If OCSD tax measure fails
Transitional Funding Formula and fixed contribution amounts stated for FY2019-20 apply for FY2020-21
Wind down process begins, concluding June 30, 2020
OCSD no longer a member of the FCFA as of June 30, 2020
7/14/2020
7
OCSD March 2020 Special Tax Measure
Proposal
Would raise approximately $422,000 annually for the OCSD to use for emergency and fire services
Special tax of $180 per parcel per fiscal year
Increase up to 2% annually
Results
Over 66% of Oceano voters supported the measure
Fell 10 votes short of the 66.67% necessary to enact the special tax
7/14/2020
8
Where are we now?
Per JPA Second Amendment, fixed contribution amounts calculated using Transitional Funding Formula for FY2019-20 apply through FY2020-21
FCFA Board adopted a flat budget for FY2020-21
Wind down period
7/14/2020
9
Wind Down Process
Parties meet and confer to determine distribution of assets and liabilities, including:
A determination as to the distribution of equipment and physical assets by October 1, 2020
An estimate as to the distribution of debt, employment liability, pension/ PERS and other post- employment obligations by February 1, 2021
FCFA Board allocated funding in its FY2020-21 budget to retain an actuary to complete part of the pension/PERS analysis
An estimate as to the distribution of all other assets by March 1, 2021
7/14/2020
10
Proposed Third Amendment
OCSD will place another special tax measure on the primary ballot in 2022
Transitional Funding Formula and fixed contribution amounts stated in the Second Amendment will continue through at least June 30, 2022
Emergency costs and expenses may require additional contributions by member agencies
7/14/2020
11
Proposed Third Amendment
If OCSD’s 2022 ballot measure succeeds, Final Revised Formula will go into effect
If OCSD’s 2022 ballot measure fails, wind down process completed by June 30, 2023 – OCSD no longer a party to FCFA
7/14/2020
12
Benefits
Current contribution amounts will not change for the next two years
Arroyo Grande’s costs for fire and emergency response service will not increase - $2,580,955 per fiscal year
Certainty and stability when planning for fire service costs in light of the economic challenges associated with COVID-19
Results of OCSD ballot measure indicate over 66% of voters wish to remain in the FCFA and to pay more for their fire and emergency response services
Delays wind down process so that resources may be devoted to evaluating full suite of options for future fire and emergency response services in Arroyo Grande
7/14/2020
13
Drawbacks
Flat budget for FCFA for at least two more years
Possible need to use Fund Balance for equipment and operating expenses
Possible need to seek additional contributions for emergency expenses
Delays implementation of wind down process
7/14/2020
14
FCFA Options
Following approval of Third Amendment, Fire Chief, Treasurer, and managers will complete analysis of full suite of options for future fire and emergency response services
7/14/2020
15
FCFA Options
Amended JPA Structure (3 communities)
New JPA (2 communities)
New JPA with contract customer(s)
Individual fire departments
Contract with County/CAL FIRE*
Fire District**
* City would contact CAL FIRE and express interest in formal proposal. Would likely require a resolution and supporting letter from the labor unit.
** Analysis of Fire District option requires outside consulting services and close work with LAFCO long term.
7/14/2020
16
FCFA Options
Evaluations of these options will be developed and presented to City Council during FY2020-21
Process will include consideration of the following:
Cost
Operational needs and impacts
Service delivery
Financial stability
7/14/2020
17
Next Steps
Grover Beach City Council approved Third Amendment on June 22
OCSD Board of Directors approved Third Amendment on June 24
Approval by Arroyo Grande City Council will make the Third Amendment effective
7/14/2020
18
Recommended Action
It is recommended that the City Council adopt the Resolution approving the Third Amendment to the Joint Exercise of Powers Agreement for the Five Cities Fire Authority.
7/14/2020
19
Thank You
7/14/2020
20
7/14/2020
21
7/14/2020
22