CC 2013-10-08_10.a. Support for FCFA Benefit AssessmentMEMORANDUM
TO: CITY COUNCIL
FROM: MICHAELE. HUBERT, FIRE CHIEF-FIVE CITIES FIRE AUTHORITY
SUBJECT: CONSIDERATION OF SUPPORT FOR THE CREATION OF A BENEFIT
ASSESSMENT DISTRICT FOR THE FIVE CITIES FIRE AUTHORITY
DATE: OCTOBER 8, 2013
RECOMMENDATION:
It is recommended the Council support and provide direction to the Five Cities Fire
Authority (Authority) representative to proceed with the process of forming a Benefit
Assessment District.
IMPACT TO FINANCIAL AND PERSONNEL RESOURCES
The cost of the proposed engineering study is projected to be approximately $24,500
which will be paid from Five Cities Fire Authority reserves. Ultimately, revenues will be
determined by the engineering study.
BACKGROUND:
The Authority has been exploring mechanisms available to establish a stable revenue
source for its operations. Last year, the Authority entered into a consulting contract with
the firm of NBS to analyze and evaluate such funding methods. Last February, Chief
Aranaz and an NBS representative made a presentation to the Arroyo Grande City
Council to accept the findings of the NBS report and provide direction to the City's
Authority representative with regard to a proposed parcel tax, including, length of time
imposed CPI options and community outreach.
Council supported the concept of a parcel tax, but directed Chief Aranaz to return at a
future date and provide additional staffing analysis as it related to the proposed annual
cost of $1.4 million, lower cost options, recommendations to increase accountability for
expenditures, Consumer Price Index (CPI) options and plans on public outreach efforts.
In May 2013, Chief Hubert returned as Fire Chief of the Authority. After a
comprehensive review of the revenue measure's current status and discussions with
various public officials, it was decided to contact other consultants to verify the results of
the analysis of a benefit assessment district versus a parcel tax measure.
Item 10.a. - Page 1
CITY COUNCIL
SUPPORT FOR THE CREATION OF A BENEFIT ASSESSMENT DISTRICT FOR THE
FIVE CITIES FIRE AUTHORITY
OCTOBER 8, 2013
PAGE2
SCI Consulting Group representative John Bliss, an expert in the field, was contacted.
Staff discussed his opinion regarding recent legal decisions relating to the benefit
assessment revenue measures. Mr. Bliss requested information on our efforts to date,
including the 2011 revenue measure feasibility study conducted by Terrain Consulting.
Based on his review of our current efforts and the results of the revenue measure
feasibility study, his conclusion is that the Authority would have a greater probability of
success in pursuing a benefit assessment measure rather than a parcel tax measure.
His opinion was based on the results of our revenue measure feasibility study and the
lower approval threshold required of a benefit assessment (50% +1) rather than a parcel
tax requiring 2/3 voter approval.
This information was presented to the Five Cities Fire Authority Board of Directors at
their September 27, 2013 meeting. The Board unanimously supported the concept and
voted to present the alternative to each of the respective governing boards for direction.
ANALYSIS OF ISSUES:
The current budget does not enable the Authority to have adequate personnel staffing
on the existing apparatus. This situation makes it difficult to comply with the OSHA
mandate of 2 in/2 out in a timely fashion. To get the appropriate number of firefighting
personnel to a working structure fire requires Automatic Aid from our neighboring
departments. The budget also does not allow for an apparatus and equipment
replacement program, dedicates insufficient monies toward dispatch services and
cannot fund a dedicated fire prevention program.
In order to provide greater safety to the public and firefighters, and to meet the OSHA
mandate, the Authority applied for and received a two year Federal grant (SAFER) in
the amount of $1, 182,693. This grant adds two firefighters to the daily staffing, bringing
the on-duty compliment up to 10 firefighters: 3 Captains, 3 Engineers and 4 Firefighters.
The SAFER grant expires September 22, 2014. The proposed Benefit Assessment
District is designed to provide funding to maintain as many of these positions as feasible
when the grant expires.
In order to fund the long term needs of the Authority, a reliable funding source must be
secured, which has been an identified need since the formation of the Authority. To
better understand what the residents living within the Authority's jurisdiction would be
willing to spend for an adequate level of fire protection and prevention services, the
Authority entered into a contract with Terrain Consulting of Santa Barbara for polling
purposes in May 2011 .
Polling revealed that residents are price sensitive in their support of a fire protection
measure. Incremental reductions in the proposed tax rate resulted in incremental
increases in support for the measure. At a tax rate of $66 per year per property, 62% of
respondents indicated they would support the tax measure.
Item 10.a. - Page 2
CITY COUNCIL
SUPPORT FOR THE CREATION OF A BENEFIT ASSESSMENT DISTRICT FOR THE
FIVE CITIES FIRE AUTHORITY
OCTOBER 8, 2013
PAGE3
Based on their initial analysis, NBS recommended the Authority pursue a parcel tax
instead of a benefit assessment district because they projected the Authority would not
be able to raise the revenue needed through a benefit assessment. The funding need
was determined based upon the cost to maintain the current grant funded positions, the
addition of a Fire Marshal, clerical position, part-time Fire Mechanic, consolidation of
dispatch services and equipment replacement costs.
Most recently, staff has contacted other consultants to better determine how the
formulas for calculating eligible expenditures are determined. Staff learned that there
are no standard templates for these determinations.
While specific figures cannot be established until a full engineering study is completed,
SCI Consulting Group believes that the Authority could be successful in addressing
additional funding needs based on the survey results. Therefore, the Fire Benefit
Assessment District is now being recommended as the best funding mechanism option.
A comprehensive benefit assessment engineering report to identify the projected costs
to each parcel within the Five Cities Fire Authority boundaries is proposed to be
developed and presented to the Board at the December meeting. SCI Consulting Group
will present fiscal plans, data review, analysis, proposed assessment methodology,
levies and budgets for review.
Below is a Revenue Projection Chart showing support levels among Single Family
Equivalent "Benefit Units" within the Five Cities Fire Authority boundaries:
Rate
$93
$84
$75
$66
Revenue
$1.3 mil
$1.175 mil
$1.05 mil
$920k
Approximate Support Level among Residential Property Owners
+-54%
+-56%
+-58%
+-60%
These projection figures do not include revenue that would be assigned to other benefit
unit occupancy types such as commercial, industrial, etc. The engineering study will be
required to identify approximate benefit assessment levies to other occupancy
classifications.
In reference to the issues that Council wanted addressed upon their initial review of the
consideration of the Five Cites Fire Authority Special Financing District Feasibility Study
by the NBS report of February 26, 2013, staff has determined that until a
comprehensive benefit assessment engineer's report is completed, the projected
revenues are only an approximation. However, based on the most recent analysis staff
believes that the revenue figures presented to the Council last February can be reduced
in order to minimize the cost impact on the City's property owners without compromising
Item 10.a. - Page 3
CITY COUNCIL
SUPPORT FOR THE CREATION OF A BENEFIT ASSESSMENT DISTRICT FOR THE
FIVE CITIES FIRE AUTHORITY
OCTOBER 8, 2013
PAGE4
the desired level of service. The apparatus capital replacement funding was reduced
because it was determined that new equipment identified to be placed on new
apparatus was not necessary. The equipment capital replacement account was
reduced because it was identified that some equipment did not meet capital
replacement priority. The part-time fire apparatus mechanic and clerical position can be
potentially eliminated if necessary in order to fund the highest priority needs. Staff has
determined that $900,000 to $1.1 million dollars of revenue would be adequate to meet
the Authority's funding needs. Staffing options are dependent upon revenue generated
from the assessment and will need further analysis. Staff is also recommending that the
Consumer Price Index for Los Angeles, Riverside and Orange counties be utilized as an
automatic escalation factor to protect against inflation.
The City Council also requested staff provide alternatives for increased expenditure
accountability. When the local sales tax measure was proposed, it included a
requirement for an annual report to be sent to every household on revenues and
expenditures and a public review of the continued need for the tax every five years.
The same measures could be recommended to the Fire Authority Board of Directors for
the proposed benefit assessment.
In order to adequately educate the public of the need for the assessment, it is
recommended the Authority appropriate funding to hire a professional firm to develop a
public education and outreach process. The process would include printed educational
materials to be mailed to each property owner. In addition, information could be
included in the City newsletter and posted on the web site. It is also anticipated that a
public education program will be organized by a community group led by the firefighters
association.
ADVANTAGES:
The benefit assessment will have the greatest likelihood of success. It can be pursued
at any time and does not have to be placed on a ballot with a general election. In
addition, only those that pay the assessment will vote, so it is a more equitable process.
DISADVANTAGES:
The primary disadvantage of a benefit assessment is that there remains some
uncertainty about the amount of revenue derived and it will require a somewhat costly
engineering study.
ENVIRONMENTAL REVIEW:
No environmental review is required for this item.
PUBLIC NOTIFICATION AND COMMENTS:
The Agenda was posted in front of City Hall on Thursday, October 3, 2013 and on the
City's website on Friday, October 4, 2013.
Item 10.a. - Page 4