CC 2020-05-26_11a Direction Regarding FCFA MOUMEMORANDUM
TO: CITY COUNCIL
FROM: WHITNEY McDONALD, ACTING DEPUTY CITY MANAGER
SUBJECT: DISCUSS AND PROVIDE INPUT AND/OR DIRECTION TO FIVE CITIES
FIRE AUTHORITY BOARD REPRESENTATIVE REGARDING
SUCCESSOR MEMORANDUM OF UNDERSTANDING WITH THE
INTERNATIONAL ASSOCIATION OF FIRE FIGHTERS LOCAL 4403
DATE: MAY 26, 2020
SUMMARY OF ACTION:
Discuss and provide input and/or direction to Five Cities Fire Authority Board
Representative regarding the proposed Successor Memorandum of Understanding
(MOU) between the Five Cities Fire Authority (FCFA) and International Association of Fire
Fighters Local 4403.
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
Costs to the City of Arroyo Grande associated with the proposed MOU are covered by
the fixed financial contribution requirements set forth in the Second Amendment to the
Joint Exercise of Powers Agreement and were included in FCFA’s Fiscal Year 2019-20
budget. If the FCFA approves the MOU, the City will not be required to pay more than it
is already required to contribute pursuant to the Second Amendment to the Joint Exercise
of Powers Agreement.
RECOMMENDATION:
It is recommended that the City Council discuss and provide input and/or direction to the
City’s FCFA Board representative regarding the proposed MOU.
BACKGROUND:
Five Cities Fire Authority
The City is a member of the Five Cities Fire Authority, a joint powers authority formed
pursuant to a Joint Exercise of Powers Agreement executed by the City of Arroyo Grande,
the City of Grover Beach, and the Oceano Community Services District in June 2010
(JPA). The FCFA provides fire services to its member agencies and each agency is
required to pay for those services according to a formula set forth in the JPA.
As a joint powers authority, the FCFA is an independent legal entity that is distinct from
its member agencies. It is governed by a Board that is made up of one elected official
from each member agency. Under the JPA, certain items must be approved by a
Item 11.a. - Page 1
CITY COUNCIL
DISCUSS AND PROVIDE INPUT AND/OR DIRECTION TO FIVE CITIES FIRE
AUTHORITY BOARD REPRESENTATIVE REGARDING SUCCESSOR MEMORANDUM
OF UNDERSTANDING WITH THE INTERNATIONAL ASSOCIATION OF FIRE
FIGHTERS LOCAL 4403
MAY 26, 2020
PAGE 2
unanimous vote of the Board, including labor relations agreements. The FCFA is
responsible for negotiating, approving, and carrying out its labor relations agreements.
Second Amendment to the Joint Exercise of Powers Agreement
The JPA has been amended twice since its execution in June 2010. The most recent
amendment, the Second Amendment to Joint Exercise of Powers Agreement (2nd
Amendment), amended the funding formula that the parties use to calculate each
agency’s required financial contributions, among other changes. In addition, the 2nd
Amendment set forth specific funding allocations required of each party for fiscal year
2019-2020 (FY19-20). Those allocations are as follows:
A. City of Arroyo Grande $2,580,955
45.01%
B. City of Grover Beach $2,015,115
35.14%
C. Oceano Community Services District $1,138,148
19.85%
The 2nd Amendment also required the Oceano Community Services District to cause a
special tax measure to be placed on the March 2020 ballot. The 2nd Amendment states
that “[s]hould the March 2020 ballot measure fail, the funding obligations set forth …
above for the Fiscal Year 2019/ 20 FCFA Budget, shall be the same in Fiscal Year 2020-
21.” (Section 5.B.)
FCFA Fiscal Year 2019-20 Budget
The FCFA’s FY2019-20 budget built in an anticipated 2% increase in salaries for FCFA
represented staff knowing that the then-current MOU with the International Association of
Fire Fighters Local 4403 would be expiring and negotiations would be occurring this fiscal
year.
Although the City does not directly approve the FCFA’s budget, the proposed FY2019-20
budget was presented to the governing bodies of each member agency, including the
Arroyo Grande City Council, for their consideration and discussion. The FCFA Board then
unanimously adopted the FY2019-20 budget, as required by the JPA.
Successor Memorandum of Understanding with International Association of Fire Fighters
Local 4403
The FCFA’s most-recent MOU with the International Association of Fire Fighters Local
4403 expired on June 30, 2019. Negotiations began earlier this year on a successor
memorandum, culminating in a proposed agreement that was presented to the FCFA
Item 11.a. - Page 2
CITY COUNCIL
DISCUSS AND PROVIDE INPUT AND/OR DIRECTION TO FIVE CITIES FIRE
AUTHORITY BOARD REPRESENTATIVE REGARDING SUCCESSOR MEMORANDUM
OF UNDERSTANDING WITH THE INTERNATIONAL ASSOCIATION OF FIRE
FIGHTERS LOCAL 4403
MAY 26, 2020
PAGE 3
Board at its May 15, 2020 meeting. The proposed Successor MOU includes a 2% salary
increase for these represented employees effective May 15, 2020, and a one-time lump
sum payment of $1,000 per represented employee in lieu of a retroactive salary increase.
During the FCFA Board’s consideration of the proposed MOU on May 15, 2020, the City’s
FCFA Board representative, Mayor Pro Tem Storton, moved to continue the item to a
future special meeting to allow for a discussion to be held with the Arroyo Grande City
Council. The FCFA Board voted in favor of the motion and this item was placed on your
Council’s agenda for consideration.
ANALYSIS OF ISSUES:
Due to the nature of the FCFA and the terms of the JPA, the City does not have direct
authority to approve, deny, or alter the terms of the proposed MOU. However, input and
direction may be provided to Mayor Pro Tem Storton as the City’s representative on the
FCFA Board and as contemplated in Section 5.6 of the Arroyo Grande City Council
Handbook.
The proposed MOU is anticipated to increase the FCFA’s expenditures on salaries and
benefits by $23,890 in FY2019-20 and $49,700 in FY2020-21. The $23,890 identified for
FY2019-20 includes both the 2% salary increase for the period of May 15, 2020, through
June 30, 2020, and the $1,000 lump sum payments for represented employees. This total
estimated expenditure is within the amount assumed in FCFA’s FY2019-20 budget for
increases in salaries and benefits. As a result, the proposed MOU is not expected to
require any adjustments to FCFA’s FY2019-20 budget. If the proposed MOU is approved
by the FCFA Board, FCFA’s FY2020-21 budget will be required to include the salary and
benefit increases provided for in the MOU.
The proposed MOU is not anticipated to create increased costs to the City. Under the
terms of the 2nd Amendment, the City’s obligations to contribute funding to FCFA is fixed
at $2,580,955 for both FY2019-20 and FY2020-21. As stated in Section 5.B. of the 2nd
Amendment, because Oceano Community Services District’s March 2020 ballot measure
failed, the funding obligations of each party will be the same in FY2020-21 as they were
in FY2019-20. This will require the FCFA to adopt a flat budget for FY2020-21. If the
proposed MOU is approved, the $49,700 in salary and benefit increases will need to be
carried forward into the FY2020-21 FCFA budget.
It is recommended that the Council discuss the proposed MOU and provide input and/or
direction to Mayor Pro Tem Storton as the City’s representative on the FCFA Board.
ALTERNATIVES:
The following alternatives are provided for the Council’s consideration:
1. Discuss and provide input to Mayor Pro Tem Storton regarding the proposed MOU;
Item 11.a. - Page 3
CITY COUNCIL
DISCUSS AND PROVIDE INPUT AND/OR DIRECTION TO FIVE CITIES FIRE
AUTHORITY BOARD REPRESENTATIVE REGARDING SUCCESSOR MEMORANDUM
OF UNDERSTANDING WITH THE INTERNATIONAL ASSOCIATION OF FIRE
FIGHTERS LOCAL 4403
MAY 26, 2020
PAGE 4
2. Discuss and provide direction to Mayor Pro Tem Storton regarding the proposed
MOU; or
3. Do not discuss or provide input or direction to Mayor Pro Tem Storton regarding
the proposed MOU; or
4. Provide direction to staff.
ADVANTAGES:
Council discussion, input, and/or direction to Mayor Pro Tem Storton regarding the
proposed MOU will help inform his decision as the City’s representative on the FCFA
Board.
DISADVANTAGES:
None.
ENVIRONMENTAL REVIEW:
No environmental review is required for this item.
PUBLIC NOTIFICATION AND COMMENTS:
The Agenda was posted at City Hall and on the City’s website in accordance with
Government Code Section 54954.2.
Attachments
1. Second Amendment to the Joint Exercise of Powers Agreement
2. May 15, 2020 FCFA Staff Report with proposed Successor Memorandum of
Understanding Between the Five Cities Fire Authority and the International
Association of Fire Fighters Local 4403
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SECOND AMENDMENT TO FIVE CITIES FIRE AUTHORITY
JOINT EXERCISE OF POWERS AGREEMENT
This Second Amendment to the Five Cities Fire Authority("FCFA") Joint Exercise of
Powers Agreement, dated June 7, 2010 ("JPA") ("Second Amendment"), is made and entered
into as of July 1, 2019, by and between the cities of Arroyo Grande and Grover Beach, and the
Oceano Community Services District("Oceano"), which are hereinafter referred to as "Party"
and"Parties."
WHEREAS, on June 7, 2010, the Parties entered into a JPA pursuant to Section 6500 et seq. of
Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California, for the
purpose of allowing the Parties to share a combined fire department in order to provide efficient
and economical fire protection services; and
WHEREAS, in or about May of 2018,the Parties executed a Memorandum of Agreement
Amending the FCFA JPA ("First Amendment") in order to provide an opportunity for the Parties
to meet and confer for the purpose of considering amendments to the JPA including, but not
limited to, modifications to the funding formula contained in Exhibit B of the JPA ("Funding
Formula"),the provisions regarding member withdrawal, and future staffing levels beyond Fiscal
Year 2018/19; and
WHEREAS,the First Amendment required the Parties to agree upon amendments to the JPA by
April 1, 2019 or the JPA would terminate as of December 31, 2019; and
WHEREAS, in March of 2019, the Parties executed an extension of the First Amendment,
which extended the time for the Parties to mutually agree upon JPA Amendments to October 1,
2019; and
WHEREAS,the parties have met in good faith and now desire to amend the JPA.
NOW THEREFORE, in consideration of the mutual covenants and conditions set forth herein,
the Parties agree as follows:
1. Recitals.The above recitals are true and correct and incorporated herein.
2. Strategic Plan. The Parties agree to fund the following priorities of the five-year
Strategic Plan,which was adopted by the FCFA Board of Directors in 2017 for the
Fiscal Year 2019/20 budget:
Continued transition to Career Firefighter position with hiring of three(3) full-time
positions to be assigned to the Grover Beach fire station.
3. Fiscal Year 2019/2020. Each Parties' contributions for funding the Fiscal Year
2019/20 FCFA Budget shall be:
A. City of Arroyo Grande 2,580, 955
45.01%
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B. City of Grover Beach 2,015,115
35.14%
C. Oceano Community Services District 1,138,148
19.85%
4. Funding Formula.
A. The Funding Formula contained in Exhibit B to the JPA is hereby amended and
replaced in its entirety as set forth in Attachment 1 to this Amendment. All
references in the JPA to Exhibit B shall now refer to Attachment 1.
B. For Fiscal Year 2019-20, a transitional formula is used to determine the funding
contributions specified in Section 3. This transitional formula modifies
component 3 of the Funding Formula related to fire stations to reflect current
staffing levels. This transitional formula may be used for the subsequent Fiscal
Year 2020-21 as noted in Section 5B.
C. The Funding Formula will be reviewed by the Jurisdiction every three years in the
month of January, commencing 2023.
5. Ballot Measure.
A. Oceano agrees to undertake the legally required procedures to place a special tax
on the March 2020 ballot in accordance with Government Code Section 61121.
Oceano will seek a special tax amount sufficient to enable Oceano to be able to
fund its share of the Funding Formula taking into account the priorities of the
Strategic Plan as determined by the Five Cities Fire Authority Board of Directors.
B. If the March 2020 Oceano ballot measure does not pass and Oceano is unable to
fund its share of the Funding Formula, by operation of this Second Amendment
and subject to the Wind Down Period (identified below), Oceano will
automatically and without further action cease to be a member of the JPA on June
30, 2021. The time between when the County Clerk Recorder concludes that the
2020 Oceano ballot measure has failed and June 30, 2021 will be known as the
Wind Down Period." Oceano agrees that should it no longer be a member
agency of the FCFA, the cities of Arroyo Grande and Grover Beach may continue
to operate under the trademark name of Five Cities Fire Authority with no further
rights of Oceano to that name. Should the March 2020 ballot measure fail,the
funding obligations set forth in Section 3 above for the Fiscal Year 2019/20
FCFA Budget, shall be the same in Fiscal Year 2020/2021.
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6. Wind Down Period.
A. During the Wind Down Period,the Parties shall establish the distribution of assets
currently owned and/or in the possession of the JPA, including but not limited to
major pieces of apparatus and capital equipment, which will allow Oceano to
maintain sufficient apparatus and capital equipment in order to establish an
independent fire service and will allow Arroyo Grande and Grover Beach to
continue to operate as the FCFA.
B. During the Wind Down Period,the Parties will establish the obligations of the
Parties to pay future obligations that were incurred by the FCFA prior to April 1,
2020, including, but not limited to the following:
a. Lease payments on Engine 2 and 3; however, the Parties mutually agree and
understand that as a result of the dissociation and/or withdrawal of Oceano or
any other Party, no Party will be obligated for future payment lease
obligations for any Engine that does not remain in the custody, control, and
possession of that Jurisdiction.
b. Withdrawal and/or dissociation of Oceano or any other Party shall not absolve
such Party of liabilities arising out of the participation in the JPA incurred in
the ordinary course of business. The Parties mutually agree and understand
that as a result of the dissociation and/or withdrawal of Oceano or any other
Party, all Parties will remain obligated to pay future FCFA employment
related obligations incurred prior to June 30, 2021, including but not limited to
pension/PERS, accrued fringe benefits etc.
c. During the Wind Down period, the FCFA will perform an unfunded actuarial
accrued liability analysis to calculate Oceano or any other dissociating and/or
withdrawing Parties' share of unfunded PERS liability,which will be due to
the remaining JPA Parties or the City of Arroyo Grande should the JPA be
dissolved.
d. During the Wind Down Period,the Parties will meet and confer in good faith
in regards to the distribution of assets and liabilities as follows:
a. A determination as to the distribution of equipment and physical assets
by October 1, 2020 (effective June 30,2021).
b. An estimate as to the distribution of debt, employment liability,
pension/PERS and other post-employment obligations by February 1,
2021 (effective June 30, 2021).
c. An estimate as to the distribution of all other assets by March 1, 2021
effective June 30, 2021).
e. The parties mutually agree and understand that any liability related to
unresolved claims or litigation existing prior to June 30, 2021 will remain the
obligation of all Parties whether remaining members of the FCFA or not.
f. Prior to October 1, 2021,the Parties shall complete a post-dissociation
reconciliation of all assets and liabilities incurred prior to June 30, 2021. Any
party owing funds shall pay such funds to the other immediately upon
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determination. The parties agree to cooperate in completing this post closing
reconciliation.
7. Effect of Amendment.All other provisions of the JPA shall remain unchanged and
in full force and affect.To the extent there is inconsistency between this Amendment
and the JPA,the terms of this Amendment shall control, including but not limited to
JPA Sections 6.B, 8.B(3), and 17.
8. Counterparts. This Amendment may be executed in any number of counterparts and
by the Parties hereto in separate counterparts, each of which when so executed shall
be deemed to be an original and all of which taken together shall constitute one and
the same agreement.
9. Severability. If any part of this Amendment is found to be in conflict with applicable
laws, that part will be inoperative, null and void insofar as it is in conflict with any
applicable laws, but the remainder of the Amendment will remain in full force and
effect.
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IN WITNESS WHEREOF,the Parties hereto have caused this Amendment to be executed by
their proper officers hereunto duly authorized.
CITY OF ARROYO GRANDE CITY OF GROVER BEACH
if
Caren Ray-4 om, Mayordr# ga or =_ . ,
ATT ST: - ATTEST:
b. 4 1 All 4 '
Kelly -et lore, City Clerk Wendi Sims, City C erk
APPROVEDOVED AS TO FORM: PP OV' U A/S O FOR1 I' :-' " , -- -
Heather K. Whitham, City Attorney o ay.a Hale.;
J
ity Attorney
OCEANO COMMUNITY SERVICES DISTRICT
4‘1ArjOW M AS)ii
Linda Austin,.Presiden
AS :
L aI 11
By:
AP' ' i ED AS TO 4).' : '
Jeff Minne ,, District Counse
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ATTACHMENT 1
FUNDING FORMULA
Should the ballot measure pass, effective July 1, 2020,the Parties shall bear the costs of the Five
Cities Fire Authority according to the following formula,to be calculated every three years when
the budget is prepared. If the ballot measure fails, the funding will be in accordance with Section
5.B of this Second Amendment.
1. 33. 33% of costs shall be assessed among the Parties in proportion to the population of
each Jurisdiction as most recently determined by the U.S. Census and any intervening
estimates prepared by the California Department of Finance when the Fire Chief prepares
each annual budget.
2. 33.33%of costs shall be assessed among the Parties in proportion to the number of
annual service calls, calculated on a three-year rolling average in each Jurisdiction as
most recently determined when the Fire Chief prepares each annual budget.
3. 33.33%of costs shall be assessed among the Parties in proportion to the number of fire
stations located in each Jurisdiction.
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