Arroyo Grande City Council
April 25, 2023

65501.00001\41161259.16

DRAFT FOR NEGOTIATIONS PURPOSES

11. Debts, Liabilities, Obligations. Subject to all applicable laws, including but not limited to Government Code section 6508.1, all debts, liabilities, and obligations of the Authority shall be those of the Authority, and do not constitute debts, liabilities, or obligations of any one or more of the Member Agencies. The responsibilities and obligations of each Member Agency to this Agreement shall be solely as provided in this Agreement, or as provided in supplemental agreements or amendments as shall be executed by the Member Agencies. As required by law, the Member Agencies are liable for CalPERS liability of the Authority as follows:

11.1 The Authority shall use the City of Arroyo Grande’s CalPERS contract for Employees of the Authority.

11.2 If a Member Agency withdraws from the Authority, the withdrawing Member Agency shall be liable for, and upon demand shall promptly pay, its share of the existing and/or contingent liabilities of the Agency as of the effective date of the withdrawal. The withdrawing Member Agency’s share of liabilities shall bear the same relationship to the whole as its annual contribution for the operation of the Authority bears to the whole of all annual contributions.

11.3 If a Member Agency withdraws from the Authority, but the Authority does not dissolve or terminate, and the Authority has established a plan of periodically paying down part of its unfunded accrued pension liability (“UAPL”) debt to CalPERS, the withdrawing Member Agency shall continue to be liable, and to promptly pay thereafter to Authority upon being billed, its share of the Authority’s UAPL based upon its prior years of membership. The withdrawn Member Agency’s share of such UAPL expense shall be the determined according to the same formula used by the Authority to allocate such costs during the final year of the withdrawing Member Agency’s membership.

11.4 The withdrawing Member Agency shall also be liable for any additional Authority expenses as of the effective date of the withdrawal that exclusively benefit the withdrawing Member Agency as well as 100% of any early termination fees that accrue due to the withdrawal of the Member Agency.

11.5 Until such time that the Authority utilizes a different contract approved by its Board, if the City of Arroyo Grande dissolves, terminates, or ends its contractual relationship with CalPERS(“the triggering events”), Government Code sections 6508.1 and 6508.2 will require all existing Member Agencies, and certain past Member Agencies, to each assume individual financial responsibility for its proportionate share of the UAPL then in effect. By joining Authority, each Member Agency promises and represents that upon occurrence of a triggering event: (i) it will undertake this obligation when requested by either CalPERS or the Authority; and (ii) that unless the Board determines differently, the proportionate share each Member Agency will assume shall be based upon the same formula used to determine each Member Agency’s share of the Authority’s last periodic UAPL payment to CalPERS in the year prior to the triggering event.

11.6 Prior to Execution. The debts, liabilities and obligations of each Member Agency in existence or accrued as of the full execution of this Agreement shall remain the debts, liabilities and obligations of that Member Agency and shall not be assumed by or transferred to the Authority. After the execution of this Agreement by both Member Agencies, however, any

65501.00001\41161259.16

DRAFT FOR NEGOTIATIONS PURPOSES
existing debt, liability or obligation of the Member Agencies may be expressly approved or accepted by the Authority by a formal written action of the Board.

11.7 Fire Engines 2 and 3 Equipment Lease Payments. Notwithstanding any other provisions of this Agreement to the contrary, the Parties mutually agree and understand that as a result of any dissociation, withdrawal or termination of this Agreement, 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 Member Agency.

12. Indemnity and Hold Harmless; Insurance.

12.1 Indemnification of Member Agencies. The Authority shall indemnify, defend and hold harmless the Board of Directors, the individual Member Agencies, and their members, officers, directors, employees and agents from and against any and all liability, loss, damages, expenses, costs (including, without limitations, costs and fees of litigation or arbitration) of every nature, arising out of any act or omission related to this Agreement, any individual Member Agency, or their members, officers, directors, employees and agents.

12.2 Indemnification for Prior/Separate Acts. Each Member Agency (Indemnifying Member Agency) shall defend, indemnify and hold harmless the Authority, each Director, the other Member Agency, and the Authority and each Member Agency’s respective Council or governing board members, officers, agents and employees, from any and all claims, losses, damages, costs, injuries and liabilities of every kind, including attorney’s fees and expert’s fees, arising directly or indirectly from the Indemnifying Member Agency’s acts or omissions occurring prior to the effective date of this Agreement’s initial Effective Date of June 7, 2010 or otherwise outside the scope of this Agreement.

12.3 Insurance. The Authority shall acquire insurance protection as is necessary to protect the interests of the Authority and the Member Agencies. The premiums for insurance acquired by the Authority, as well as any anticipated funds necessary to pay for self-insured retentions and deductibles for insurance, shall be determined based upon actuarial studies and included in the budget. Any adjustments to the budget to pay for insurance premiums, selfinsured retentions, and deductibles shall be prepared by the Management Committee for presentation to the Board of Directors for consideration and approval.

12.4 Survival. These defense, indemnification, and hold harmless obligations shall survive and continue in full force and effect after withdrawal of any Member Agency from this Agreement or termination of this Agreement for any reason with respect to any negligent acts, errors or omissions that occurred before the date of such withdrawal or termination.

13. Termination.

13.1 Termination.
(a) When there are only two Member Agencies in the Authority, either Member Agency may unilaterally terminate the Agreement with an effective termination date of June 30 of

65501.00001\41161259.16

DRAFT FOR NEGOTIATIONS PURPOSES
any Fiscal Year, provided that written notice is provided to, and received by, the Authority and the other Member Agency by the terminating Member Agency no later than June 30 of the prior Fiscal Year, as expressed by vote of the governing body of the terminating Member Agency. Any terminating Member Agency shall be obligated to pay that Member Agency’s contributions for the Fiscal Year ending on the effective date of termination. (b) The Member Agencies may all jointly agree by written consent to terminate the Agreement, as expressed by resolution of the governing boards of all Member Agencies (passed by vote of the membership of the governing body of each Member Agency). Such termination shall provide for adequate time to wind-up the affairs of the Authority and distribute any assets pursuant to this Agreement. The Member Agencies shall be obligated to pay their contributions until the effective date of termination.

13.2 Disposition of Member Agencies’ Property Upon Termination. Any property that was acquired by either Member Agency prior to entering this Agreement, and that is required either by this Agreement or by any subsequent act or Agreement to remain the property of the Member Agency, shall be returned to the Member Agency upon termination of this Agreement. Exhibit C lists the separate property of the Member Agencies, but a Member Agency may prove that it, and not the Authority, owns certain property by providing documentation establishing such ownership.

If property is not listed in Exhibit C, and no documentation establishes ownership of that property, the property will be presumed to be owned by the Authority.

13.3 Disposition of Authority Property Upon Termination. Upon termination of this Agreement, the assets and property of the Authority shall be distributed as follows (a) First, if either Member Agency is in default of its obligation to pay or advance any amounts due to Authority pursuant to this Agreement, then any funds or assets of the defaulting Member Agency shall be applied to the Authority in satisfaction of any such delinquency.
(b) Second, any other funds on hand shall be used to liquidate and wind-up the affairs of the Authority.
(c) Third, any surplus funds on hand remaining after satisfaction of subsections (a) and (b) above shall then be returned to the Member Agencies in proportion to their proportional financial contributions made to the Authority.
(d) Fourth, any property acquired by either Member Agency prior to entering this Agreement shall be returned to the Member Agency which owned the property at the Formation Date; provided, however, that if any such property has been substantially improved, repaired or modified by Authority funds, it shall be distributed pursuant to subsection (e) below. (e) Fifth, any remaining property and assets shall be divided and distributed amongst the Member Agencies pursuant to separate agreement of the Member Agencies entered into at that time. If such subsequent agreement is not successfully negotiated and agreed to within a reasonable period of time, then the remaining property and assets shall be sold and the net proceeds from any sale shall be distributed among the Member Agencies in proportion to their

65501.00001\41161259.16

DRAFT FOR NEGOTIATIONS PURPOSES
financial and equipment contributions made to the Authority during the operation of this Agreement and any ancillary agreements.

14. Conflict Resolution. The Member Agencies agree that any and all disputes, claims or controversies between the Member Agencies arising out of or relating to performance of this Agreement, shall be resolved pursuant to the conflict resolution provisions as follows:

14.1 The Member Agencies shall first meet and attempt in good faith to negotiate and resolve any dispute arising out of or relating to this Agreement, subject to subsequent approval of any such resolution by the respective governing boards. The Member Agencies may, in each Member Agency’s respective discretion, appoint either an alternative representative of the governing body or an ad hoc committee constituting less than a quorum of the governing body to meet and attempt in good faith to negotiate and resolve any dispute arising out of or relating to this Agreement, subject to subsequent approval of any such resolution by the respective governing boards.

14.2 If the matter is not resolved by negotiation pursuant to Section 14.1 above, then the Member Agencies agree that the matter shall be submitted to mediation within a reasonable period of time after receipt of a written request from one Member Agency to the other Member Agency requesting such mediation. The Member Agencies shall cooperate with one another in selecting a mediator and in scheduling the mediation proceedings. Should the Member Agencies be unable to agree upon a mediator, they shall agree upon a mediation service and shall have that service select a mediator for them. The Member Agencies agree that they shall participate in the mediation in good faith and that they will share equally in the costs of mediation. All offers, promises, conduct and statements, whether oral or written, made in the course of the mediation by any of the Member Agencies, their agents, employees, experts and attorneys, and by the mediator or any employees of the mediator, are confidential, privileged and inadmissible for any purpose, including impeachment, in any litigation or other proceeding involving the Member Agencies, provided that evidence that is otherwise admissible or discoverable shall not be rendered inadmissible or nondiscoverable as a result of its use in the mediation.

14.3 If the matter is not resolved by negotiation pursuant to Section 14.1 above, or by subsequent mediation pursuant to Section 14.2 above, then the Member Agencies may submit the matter to binding or non-binding arbitration, but only if both Member Agencies agree to submit the particular controversy to arbitration. Neither Member Agency shall have a right to submit any controversy to arbitration without the other Member Agency’s consent.

15. New Members.

15.1 Addition of New Members. The Authority may set the terms and conditions for admitting new members (a “New Member Agency”) that it deems appropriate either by amendment to this Agreement or the Bylaws. New members may only be admitted with unanimous approval of the Board and the governing bodies of each Member Agency. Approved new Members shall execute a copy of this Agreement, as amended, and shall thereafter be subject to all terms and conditions contained herein.

65501.00001\41161259.16

DRAFT FOR NEGOTIATIONS PURPOSES

15.2 Construction. The terms of this Agreement shall be construed so as to apply to new Members the same as to the initial Member Agencies to the Agreement. New Members shall have the rights and obligations accorded to “Members” or “Member Agencies (whether singular or plural) under this Agreement.

15.3 Cost Share. Prior to the acceptance of any New Member Agency, the proposed New Member Agency shall pay an amount, as determined by the Board, for the proposed New Member Agency’s fair share of any start-up costs or other initial investments incurred by the Authority to admit the New Member Agency.

15.4 Funding of Services. The Authority shall not provide any fire protection or related services within a New Member Agency’s geographic area unless and until the New Member Agency deposits sufficient funds to cover the estimated costs of services for a period of time as determined by the Board, to be not less than six (6) months.

16. Withdrawal. Notwithstanding any other provision of this Agreement, any Member Agency may withdraw from the Authority by providing the Authority with written notice of its intent to withdraw consistent with Section 13.1 of this Agreement, Termination. This includes providing written notice no later than June 30 of any Fiscal Year, a continuing obligation to pay that Member Agency’s contributions for the Fiscal Year ending on the effective date of termination, and following Section 13.1.b. for the procedure where the Members Agency may jointly agree by written consent on the withdrawal of a Member Agency. A withdrawal from the Authority constitutes a withdrawal of that Member Agency’s representatives from the Board of Directors.

17. Effect of Withdrawal. The withdrawal of a Member Agency shall not terminate its responsibility to contribute its share of any obligation incurred by the Authority, including amounts determined by the Board for (1) liabilities and claims accrued during the time the agency was a Member Agency or (2) budgeted expenses for the Fiscal Year in which notice of intent to withdraw is given. Except as the withdrawing Member Agency may agree, in writing, with the Board, the withdrawing Member Agency shall automatically relinquish all rights as a Member Agency under this Agreement, on the effective date of the withdrawal. Upon termination of this Agreement, a Member Agency that has withdrawn will be treated like all other Member Agencies for purposes of disbursement of Authority assets, unless otherwise agreed in writing and the remaining Member Agencies of the Authority can maintain the name “Five Cities Fire Authority.”

18. Conflict of Interest Code. The Authority adopts as it Conflict of Interest Code the Fair Political Practices Commission Model Conflict of Interest Code with appropriate substitution regarding references to the Board and Authority officers.

19. General Provisions.

19.1 Integration. This Agreement constitutes the sole, final, complete, exclusive and integrated expression and statement of the terms of this contract among the Member Agencies concerning the subject matter addressed herein, and supersedes all prior negotiations, representations or agreements, either oral or written, that may be related to the subject matter of this Agreement, except those other documents that are expressly referenced in this Agreement.

65501.00001\41161259.16

DRAFT FOR NEGOTIATIONS PURPOSES

19.2 Headings. The section and subsection headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.

19.3 Consents. Whenever any consent and/or approval is required under this Agreement from any Member Agency, said consent and/or approval shall not be unreasonably withheld.

19.4 Construction and Interpretation. It is agreed and acknowledged by the Member Agencies that this Agreement has been arrived at through negotiation, and that each Member Agency has had a full and fair opportunity to revise the terms of this Agreement. Consequently, the normal rule of construction that any ambiguities are to be resolved against the drafting Member Agency shall not apply in construing or interpreting this Agreement.

19.5 Waiver. The waiver at any time by any Member Agency of its rights with respect to a default or other matter arising in connection with this Agreement shall not be deemed a waiver with respect to any subsequent default or matter.

19.6 Remedies Not Exclusive. The remedies provided in this Agreement are cumulative and not exclusive, and are in addition to any other remedies that may be provided by law or equity.

The exercise by either Member Agency of any remedy under this Agreement shall be without prejudice to the enforcement of any other remedy.

19.7 Severability. The invalidity, illegality or unenforceability of any provision of this Agreement shall not render the other provisions unenforceable, invalid or illegal.

19.8 Successors and Assigns. Except as otherwise provided by law, the rights and duties of the Member Agencies under this Agreement shall not be assigned or delegated without the prior written consent of the other Member Agency. Any attempt to assign or delegate such rights or duties in contravention of this Agreement shall be null and void. Any approved assignment or delegation shall be consistent with the terms of any contracts, resolutions, indemnities and other obligations of the Authority then in effect, and may be subject to such additional reasonable conditions of approval imposed by the Member Agency approving the assignment or delegation.

19.9 No Third Member Agency Beneficiaries. This Agreement shall not be construed to create any third party beneficiaries. This Agreement is for the sole benefit of the Member Agencies, and their permitted successors, transferees and assignees, and no other person or entity shall be entitled to rely upon or receive any benefit from this Agreement or any of its terms.

19.10 Amendment. This Agreement may be modified or amended only by a subsequent written agreement approved by the governing board of each Member Agency and executed by both Member Agencies pursuant to the terms and conditions of this Agreement.

19.11 Governing Law and Venue. Except as otherwise required by law, this Agreement shall be interpreted, governed by, and construed under the laws of the State of California. The County of Riverside shall be the venue for any litigation concerning the enforcement or construction of this Agreement.

65501.00001\41161259.16

DRAFT FOR NEGOTIATIONS PURPOSES

19.12 Attorney Fees. In the event any legal action is brought to enforce or construe this Agreement, the prevailing party shall be entitled to an award of reasonable attorney fees, expert witness and consulting fees, litigation costs and costs of suit.

19.13 Notice. Any notice, demand, invoice or other communication required or permitted to be given under this Agreement shall be in writing and either served personally or sent by prepaid, first class U.S. mail to the City Clerk and City Attorney of each Member Agency.

Any notice or other communication served by personal delivery shall be deemed received when actually delivered. Any notice or other communication shall be deemed as received three days after deposit in United States mail, postage prepaid, return receipt requested.

19.14 Counterparts. This Agreement may be executed by the Member Agencies in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. [signature page follows]

65501.00001\41161259.16

DRAFT FOR NEGOTIATIONS PURPOSES
IN WITNESS WHEREOF, the Member Agencies hereto have executed this Joint Exercise of Powers Agreement as of the date last executed as set forth below.

CITY OF GROVER BEACH
By
Mayor,
Dated
ATTEST:

By
City Clerk
APPROVED AS TO FORM:

City Attorney

CITY OF ARROYO GRANDE
By
Mayor
Dated
ATTEST:

By
City Clerk
APPROVED AS TO FORM:

City Attorney

65501.00001\41215817.1

EXHIBIT A

ADMINISTRATIVE SERVICES
Administrative services shall be provided to the Authority by the Members as follows:

1. Personnel. All personnel working for the Authority will be employed by the City of Arroyo Grande. Personnel, benefits, payroll, and workers compensation matters shall be administered by Arroyo Grande subject to a written agreement between the Authority and the City of Arroyo Grande. The City of Arroyo Grande shall assign all fire service employees on a full-time basis to carry out the functions of this Agreement.

Furthermore, under such written agreement, the City of Arroyo Grande will assign all of its responsibilities of the appointment, promotion, management, training, supervision, evaluation, discipline, and termination of employees as well as labor negotiations with represented employees to the Authority under the Authority’s chain of command and decision making process.

2. Finance. The City of Arroyo Grande shall provide financial services. Financial services shall include the provision of payroll, accounts payable, and accounts receivable services, as well as, any financial reporting and auditing services that may be required.

3. Information Technology. The City of Arroyo Grande shall provide information technology services. Information Technology shall include monitoring and maintaining the company computer systems, installation and configuration of hardware and software, and solving technical issues as they arise.

4. Indirect Contribution. Payment for the services as described in Exhibit A shall be the responsibility of the Member providing the services as referenced in Exhibit A. The payment for such services by said agencies shall be recognized as an indirect contribution made by the respective agency. All indirect contributions shall be recognized in the Authority's budget as a contribution from the respective agency and shall be deducted from the contributing agency's proportional allocation of costs for the operation of the Authority.

65501.00001\41215817.1

EXHIBIT B

FUNDING FORMULA
Effective July 1, 2023, each Member Agency shall pay for the ongoing costs of the Five Cities Fire Authority according to the following formula to be calculated annually when the budget is prepared:

1. 58% of the total costs shall be paid by the City of Arroyo Grande;

2. 42% of the total costs shall be paid by the City of Grover Beach.

Any revenue received by the Authority, such as through a contract for service, reimbursements received for strike team deployment or automatic aid, grant funding, or fees for service, shall reduce the total costs that are then allocated to the Member Agencies according to the above formula.

The funding formula contained herein shall be reevaluated by the Member Agencies at least every two years, prior to the Member Agencies’ biennial budget adoption.

65501.00001\41215817.1

EXHIBIT C

INVENTORY OF SEPARATE PROPERTY OF THE

MEMBER AGENCIES
The following inventory of each Member Agency will become the property and responsibility of the Authority, including but not limited to maintenance, insurance, and replacement:

Arroyo Grande Grover Beach
Engine 6691 – 2007 Pierce Type I Engine Bauer Air-Fill Compressor – GB Station Rescue 6652 – 1996 E-One Rescue
Utility 6632 – 1995 Ford F-250 Pick-Up

65501.00001\41215817.1

EXHIBIT D
The following map identifies the service areas of the Member Agencies for the JPA.

Contractual services provided to areas outside of these Member Agencies are not depicted on this map.

ATTACHMENT 2
April 2023
Five Cities Fire Authority
Analysis of Fire Services

1730 MADISON ROAD • CINCINNATI, OHIO 45206 • 513 861 5400 • BAKERTILLY.COM April 13, 2023
Mr. Matthew Bronson
City Manager
City of Grover Beach
154 S. Eighth Street
Grover Beach, CA 93433
Dear Mr. Bronson:

Baker Tilly is pleased to transmit this report on our assessment of the Five Cities Fire Authority (FCFA). The focus of this engagement was to provide an overall assessment of the financial impacts associated with the departure of the Oceano Community Services District (OCSD) from the FCFA based on OCSD’s initiation of the divestiture process with the San Luis Obispo County Local Agency Formation Commission (LAFCO). In this report, we identified staffing and fire service options and developed options for a new governance structure. In all, our report includes 18 recommendations for organization enhancements and efficiencies. In addition, we also created a user-friendly and multi-faceted fiscal model for the FCFA and the cities of Arroyo Grande and Grover Beach to use in their respective budget forecasting. This fiscal model will be provided to you separate from this report.

Our review found that the FCFA has done a commendable job in providing basic fire suppression service to its partner agencies, given its limited financial resources, constrained operating budget, and organizational challenges. While the FCFA is an improvement over the previous separate city department model, like other small fire agencies, the FCFA has many operational challenges. However, we feel that we have made several recommendations in this report to help the FCFA address the challenges.

We appreciate the FCFA staff and staff from the cities of Arroyo Grande and Grover Beach for providing us with a variety of information and for having very candid discussions with our team members. In addition, we valued the feedback we received from both the Arroyo Grande City Council and the Grover Beach City Council on our observations and preliminary recommendations presentation, and please be advised that this report provides updated data based on information we received since those presentations were made.

Sincerely,
Carol Jacobs
Managing Director

Analysis of Fire Services
Table of Contents Baker Tilly
i
Table of Contents
Executive Summary ..................................................................................................................................1 Major Observations..........................................................................................................................1 Organization of the Document.......................................................................................................2 Background ................................................................................................................................................3 Project Approach.......................................................................................................................................4 Interviews..........................................................................................................................................4 Interview Themes........................................................................................................................5 Document Review............................................................................................................................5 Service Level Analysis .............................................................................................................................6 Fire Chief’s Recommended Staffing Plans ........................................................................................19 Plan A – Incremental staffing increase with a 4th Company in FY 2029 ...............................19 Plan B – An immediate staff increase of 12 and adding a 4th Company in FY 2027............19 Fiscal Analysis .........................................................................................................................................21 Alternative Models .................................................................................................................................37 Maintain the JPA pooled FCFA structure to serve the two cities and possibly provide short-term or longer-term service to Oceano via contract........................................................37 Revert to stand alone independent city fire departments ........................................................40 Contract out service delivery to CALFIRE .................................................................................40 One City to contract for fire service delivery with the other City...........................................41 Regional Consolidation .................................................................................................................41 Governance Structure.............................................................................................................................43 Conclusion................................................................................................................................................44 Attachment A – List of Recommendations.........................................................................................45

Analysis of Fire Services
Table of Contents Baker Tilly
ii
Tables
Table 1. First Alarm Residential Staff Assignments ..........................................................................7 Table 2. Current FY 2022-23 Budgeted Staffing ..................................................................................8 Table 3. Comparison of FCFA Service Area and Staffing Model to Nearby Agencies ...............9 Table 4. Annual Calls for Service1.......................................................................................................10 Table 5. Plan A – Incremental staffing increase with 4th Company in FY 2029 .........................19 Table 6. Plan B – Immediate staff increase of 12 with 4th Company in FY 2027 ........................20 Table 7. Total Cost ..................................................................................................................................20 Table 8. Percentage Allocation of Contributions Between Member Agencies ...........................23 Table 9. Plan A-2 Staffing Configuration and Additions by Year.................................................25 Table 10. Plan A-3 Staffing Configuration and Additions by Year...............................................25 Table 11. Plan A-4 Staffing Configuration and Additions by Year...............................................26 Table 12. Plan A-5 Staffing Configuration and Additions by Year...............................................27 Table 13. Low-Cost Option: FCFA forecast with OCSD scenario 1/staffing Plan A-4 ($ in 000) 28 Table 14. Medium-Cost Option: FCFA forecast with OCSD scenario 1/staffing Plan A-3 ($ in 000) 28
Table 15. High-Cost Option: FCFA forecast under OCSD scenario 1/staffing Plan A-2 ($ in 000) 29
Table 16. Low-Cost Option: FCFA forecast under OCSD scenario 2/staffing Plan A-4 ($ in 000) 30
Table 17. Medium-Cost Option: FCFA forecast under OCSD scenario 2/staffing Plan A-3 ($ in 000) 30
Table 18. High-Cost Option: FCFA forecast under OCSD scenario 2/staffing Plan A-2 ($ in 000) 31
Table 19. Low-Cost Option: FCFA forecast under OCSD scenario 3/staffing Plan A-4 ($ in 000) 32
Table 20. Medium-Cost Option: FCFA forecast under OCSD scenario 3/staffing Plan A-3 ($ in 000) 32
Table 21. High-Cost Option: FCFA forecast under OCSD scenario 3/staffing Plan A-2 ($ in 000) 33
Table 22. FY 2024 Contribution by Cities and Increase Over FY 2023 ($ in 000).........................34 Table 23. Plan A-4 Two Three-Person and One Two-Person Companies Without Added County Funding Support ($ in 000) .....................................................................................................38 Table 24. Plan A-2 – Three Three-Person Companies Without Added County Funding Support ($ in 000) ....................................................................................................................................39

Analysis of Fire Services
Table of Contents Baker Tilly
iii
Table 25. Plan A-5 – Two 3-Person Engine Companies, Added Battalion Chief and Contracted Prevention Services, Service Only the Two Cities, Without OCSD ($ in 000)............................39 Figures
Figure 1. FCFA Expense versus Revenue Assuming no OCSD, Current Staffing Levels, and Continued Flat City Contributions......................................................................................................24 Figure 2. Projected Costs for FCFA and Nearby Cities ($ in 000)...................................................34 Figure 3. Range of FCFA Contributions by Cities Through FY 2029 ($ in 000)...........................35 Figure 4. Regional Map1.........................................................................................................................42

Analysis of Fire Services
Executive Summary Baker Tilly
1 Executive Summary
Baker Tilly was engaged by the cities of Arroyo Grande and Grover Beach to assist with an analysis of fire services provided by the Five Cities Fire Authority (FCFA).

The objective of this engagement was to:
 Provide an assessment of the financial impacts of the departure of the Oceano Community Services District (OCSD) from the FCFA;  Provide the options available to the FCFA to address the financial gap as a result of OCSD’s withdrawal from the FCFA; and  Recommend a new governance structure upon the departure of OCSD.

Major Observations
Through our data gathering and analysis, we made numerous detailed observations described further in this report. Major observations that informed our recommendations are provided below.
 The need for an ongoing dedicated revenue source to finance operational and capital costs. With the exception of grant funding and state strike team reimbursements, all operations and capital expenses are financed directly by participating agencies.

Each agency makes a financial contribution based on a predetermined funding allocation amount; however, recent annual financial contributions have not sufficiently financed operations or capital costs. Consequently, a dedicated revenue source is both needed and warranted.
 The divestiture of OCSD fire service responsibility will take time to resolve. The process for divestiture was initiated by the OCSD Board of Directors on January 11, 2023, and now the San Luis Obispo Local Agency Formation Commission (LAFCO) will
decide on this matter. However, this decision will not be made before the end of this fiscal year; thus, options for fire service in the Oceano area will need to be explored.
 The FCFA does not meet National Fire Protection Association (NFPA) 1710 standards. NFPA sets standards for fire suppression, emergency medical operations, and special operations through

Analysis of Fire Services
Executive Summary Baker Tilly
2 NFPA 1710 which requires, amongst other things, four-person response units with a total of 17 personnel required for structure fires. FCFA does not meet this standard.
 The FCFA faces numerous operational challenges. Operational challenges include inconsistent staffing levels on all units, insufficient resources devoted to training (especially high-risk/low frequency calls), the lack of a dedicated revenue source to help finance operations and capital costs, inadequate fire prevention programs and managerial oversight, and an outdated
communication system.
 A Standards of Cover and Community Risk Assessment are needed. Both a Standards of Cover and Community Risk
Assessment are essential for determining the appropriate staffing and deployment needs of the agency. A Standards of Cover report would identify response time objectives, establish standards for measuring the effectiveness of department resources, and evaluating the deployment of those resources. A Community Risk Assessment would provide the FCFA with recommendations of how to prepare their community to respond to emergency events and develop community resilience.
 The number of calls for service for the existing service population is consistent with industry standards; however, public service or non-emergent calls represent 40% of total calls, which is relatively high compared to surrounding agencies. For example, the percentage of non-emergent calls in surrounding agencies are Paso Robles 19.1%, Morro Bay 20.2%, San Luis Obispo 23.8%, and Atascadero 30.7%. It is our understanding that the reporting software has a coding issue that needs to be addressed and may result in an increase in emergency medical calls and a
corresponding decrease in non-emergent calls.

Organization of the Document
The remainder of this report is organized into the following major sections:
 Background
 Project Approach
 Service Level Analysis
 Fire Chief’s Recommended Staffing Plans
 Fiscal Analysis
 Alternative Models
 Governance Structure
 Conclusion

Analysis of Fire Services
Background Baker Tilly
3 Background
In 2004, the cities of Arroyo Grande and Grover Beach initiated a partnership to provide fire services. This partnership included sharing personnel such as a fire chief and training officer and was later expanded to include equipment sharing, a consolidation of their reserve firefighter programs, and a change in how 9-1-1 calls were dispatched with the closest fire resource responding regardless of community boundaries. In 2009, the Oceano Community Services District joined the partnership leading to a complete consolidation of the fire departments on July 9, 2010, and the establishment of the Five Cities Fire Authority.

The Five Cities Fire Authority serves a 10 square mile area, which includes the communities of Arroyo Grande, Grover Beach, and Oceano, with a population of approximately 38,000. The area is served by three fire stations. The mission of the Five Cities Fire Authority is “to provide the highest level of service possible by mitigating threats to life, property, and the environment while meeting the growing needs of our communities.” After a special tax measure failed in the Oceano Community Services District (OCSD) in June 2022, the OCSD took action to withdraw from the Five Cities Fire Authority effective June 30, 2023. As a result, Grover Beach and Arroyo Grande requested an assessment of the financial impacts associated with the OCSD’s departure and the staffing and fire service options available in order to continue to provide fire prevention and suppression services to their respective communities be prepared by an independent third party.

Analysis of Fire Services
Project Approach Baker Tilly
4 Project Approach
In 2015, the fire chief performed a Strengths, Weakness, Opportunities, and Threats (SWOT) analysis of the FCFA. Later, in 2017, the FCFA Board hired a consultant to assist the Board with the development of a Five-Year Strategic Plan that assessed the agency’s staffing, equipment, personnel deployment, and resource needs. This previous work provided Baker Tilly with background information and context for this engagement.

Baker Tilly also obtained additional information through interviews and review of operations-related documents which informed the recommendations in this report.

Interviews
To inform our analysis, Baker Tilly conducted individual and group interviews with the following:

1. CALFIRE representatives

2. City Managers

3. City finance directors

4. FCFA command staff

5. FCFA firefighters’ union representatives which included captains, engineers and firefighters

6. Former FCFA Board Members

7. OCSD General Manager

8. San Luis Obispo County Fire Chief

9. San Luis Obispo County Local Agency Formation Commission (LAFCO) Executive Director
The purpose of the interviews was to obtain insight on:
• Strengths, weaknesses, and opportunities for improvement inside and outside the organization;
• Organization structure and staffing;
• Interagency collaboration and communication;
• Technology systems and staff development opportunities; • Financial management and reporting; and
• Assessment of best practices.

Analysis of Fire Services
Project Approach Baker Tilly
5 Interview Themes
The following major themes emerged from our interviews. • FCFA personnel take great pride in the service they provide and are passionate about enhancing service levels.
• The departure of OCSD is a concern from a fire service delivery and funding perspective.
• Board members, city management, fire command staff, and floor personnel are concerned about the availability of funding to properly finance operations and capital costs.
• According to floor personnel, they are overworked and stressed due to operational challenges and lack of resources.
• A low level of collaboration exists between FCFA personnel and the JPA member agencies which has caused frustration amongst floor personnel leading to a lack of harmony and mutual understanding in the workplace.
• Continued consolidation of fire resources from neighboring agencies makes the most sense rather than having standalone city fire departments.

Document Review
Baker Tilly reviewed a wide range of documents to help inform our analysis. The documents are listed below.
 Budgeting and financial-related information including CalPERS Actuarial Reports
 CALFIRE Emergency Command Center Contract
 CALFIRE Pismo Beach Contract
 Citygate Pismo Beach Analysis
 Calls for service data and associated call volume information  Emergency Command Center Three Year Data Run by Unit
 FCFA Joint Powers Agreements and associated amendments  La Verne Fire Department Community Risk
Assessment/Standards of Cover
 NFPA 1500 Firefighter Safety and Wellness
 NFPA 1710 Standard for Deployment
 NFPA 1730 Community Risk/Fire Prevention
 Public Protection Classification Summary Report by the Insurance Services Office
 Santa Maria Fire Department Community Risk
Assessment/Standards of Cover
 Special District Fire Projection Study
 Strategic planning and associated fire study documents  Various FCFA operations documents

Analysis of Fire Services
Service Level Analysis Baker Tilly
6 Service Level Analysis
Since 2010, the FCFA has provided fire prevention and suppression service to the cities of Arroyo Grande, Grover Beach, and the unincorporated area of Oceano. Their service area boundary covers almost 10 square miles. FCFA serves a population of over 38,000 and personnel respond from three separate fire stations.

The FCFA has a total of 26.5 full-time equivalent (FTE) budgeted positions. The FY 2022-23 annual budgeted revenues are $6.3 million with $6.9 million in appropriations resulting in budgeted deficit of $616,000.

The annual capital budget for the FCFA is slightly over $250,000. This represents an increase from prior years, which averaged about $100,000 per year over the last three years. The FCFA does not currently have an established asset replacement program for equipment and apparatus which makes it challenging to replace mission-critical assets when needed. In addition, there is no current long-term capital plan for fire station renovations or improvements.

Given their limited financial resources, the FCFA provides basic fire suppression service to the community and maintains a positive relationship with the public. There also exists a non-profit group called “Friends of the Five Cities Fire Authority” that is made up of community volunteers designed to help provide additional funding to the agency as well as support its goal of providing effective fire protection services to the residents of the central coast. The FCFA model enables the cities to provide fire protection services in a cost-effective manner. The department could be characterized as a home-grown department with many local employees. The majority of those in a supervisory capacity have been promoted through the ranks of the organization. Like many small fire agencies, the operational design and organization make the FCFA unique while also creating challenges for service delivery which are discussed later in this report.

Because of the topography and vast service boundaries of the FCFA, automatic and mutual aid resources have lengthy response times. As such, the FCFA does not currently meet the National Fire Protection Association (NFPA) standards for fire suppression, emergency medical

Analysis of Fire Services
Service Level Analysis Baker Tilly
7 operations, and special operations as outlined in NFPA 1710 for public career fire organizations. Specifically, the daily unit staffing is not at the required level to meet this standard. NFPA requires four personnel on each unit with 17 personnel required for structure fires within 8 minutes of being dispatched. Rather than being at the required 17 personnel, the FCFA has only 11 personnel, thus requiring assistance from other outside fire agencies to properly attack a structure fire as illustrated in Table 1 below.

Table 1. First Alarm Residential Staff Assignments
Assignment Standard FCFA1
Incident Commander 1 2
2 Pump Operator 1 1
Fire Attack 2 2
Back-Up Crew (BUC) 1 2 2
Attack/BUC Support 2
Victim Search & Rescue 2
Ladders and Ventilation 2 2
Truck Operator 1
Rapid Intervention Crew (RIC) 4 2
2 Subtotal 17 11
1When Oceano is open, there exists 1 additional Fire Engineer 2Automatic Aid - One Battalion Chief, One Engine Company with staffing of two The NFPA 1710 requirement is based on operational studies conducted by the NFPA and the National Institute of Standards and Technology (NIST) on fireground and emergency medical services field experiments.

These experiments defined the number and types of tasks specific fire personnel are required to perform for successful outcomes during fire and emergency medical service (EMS) calls for service. They compare staffing of two, three, four, and five firefighters with varying arrival times of each apparatus. In addition, there is a Cal OSHA regulation in place requiring four personnel to be on scene and available for rescue before entering a hazardous environment. With the current FCFA configuration and staffing model this is not easily met, and the only permitted exception is entry to rescue a victim.

With regards to the current NFPA standard, Table 2 on the following page compares the NFPA standard with the current complement of FCFA.

Analysis of Fire Services
Service Level Analysis Baker Tilly
8 Table 2. Current FY 2022-23 Budgeted Staffing
Current
Station Companies
A/P/T1 Arroyo Grover 3rd 4th Total
Chief 1 1
Admin 1.5 1.5
Fire Marshal 0
Prevent Spec 0
EMS Coord 0
Batt Chief 2 2
Captain 3 3 3 9
Engineer 3 3 1 7
Firefighter 3 3 6
Total 4.5 9 9 4 26.5
1 A/P/T = Administration/Prevention/Training
Of the 26.5 full-time equivalent (FTE) positions, 22 FTEs are sworn positions that provide a three-company deployment with two threeperson companies (one assigned to each City) and one two-person company on "B" shift only that is assigned to the Oceano area. In addition, there are 2.5 FTE positions assigned to administration (including the fire chief), along with 2 battalion chiefs, as illustrated in Table 2.

While the FCFA has a three-company deployment, because of the current staffing pattern illustrated in Table 2 above, the FCFA unit assigned to Oceano is out of service approximately 66% of the time. Taking this unit out of service puts a greater demand on the two remaining units. The logical result is an increase in simultaneous calls and dependance on automatic and mutual aid.

The constant staffing provision in the current memorandum of understanding (MOU) is two positions short of staffing all three units every day. The delivery of safe and efficient fire suppression and emergency service is based on the time and weight of responding resources, leading to effective mitigation. The varying and low level of staffing puts firefighters and the public at greater risk of injury and contributes to a low level of incident control and desired outcomes. If funding was not an issue, the ideal staffing would be for all front-line engines and trucks to be staffed by four full-time sworn personnel. And while this staffing model has proven to be the safest and most effective way to mitigate emergencies, many agencies are unable to provide this level of service. In fact, agencies of similar size and call volumes to FCFA commonly use a staffing pattern of three per unit as illustrated in Table 3.

Analysis of Fire Services
Service Level Analysis Baker Tilly
9 Table 3. Comparison of FCFA Service Area and Staffing Model to Nearby Agencies Agency Population
Area (Square
Miles)
Fire
Stations
2022 calls
for Service Staffing Model
FCFA w/ OCSD (Plan A-4)1 38,154 9.65 3 4,154 Two three-person companies and one two-person squad
FCFA w/o OCSD (Plan A-5) 31,000 8.15 2 3,326 Two three-person companies2
Pismo Beach 8,000 13.5 2 2,487 Two two-person companies Atascadero 30,500 26.13 2 3,453 Two three-person companies Lompoc 43,800 11.67 2 4,201 Two three-person companies
and one two-person squad
Paso Robles 31,759 19.65 2
3 4,748 Two three-person companies
and a two-person squad
1 The FCFA calls for service are from 2021; calls for 2022 have not yet been received. 2 Calls for service do not reflect mutual aid as data was not provided by jurisdiction. 3 Fire Station 3 is currently under construction with an estimated completion date of summer 2023. The fire station at the airport is not staffed.

The management complement in the FCFA consists of two battalion chiefs and a fire chief. Currently, the work schedules for the two battalion chiefs do not align with the three shift schedules of suppression personnel resulting in communication challenges. Furthermore, program management and oversight responsibilities are currently being delegated to floor personnel. While this is not uncommon in smaller fire agencies that have limited management resources, it is an inefficient practice and leads to communication and operational issues.

Recommendation 1. Add an additional battalion chief to
the full-time complement of management personnel and
assign each battalion chief to a shift schedule.

There is an immediate need for an additional battalion chief to balance program oversight and operational responsibilities. This was cited in the 2017 Strategic Plan and has yet to be addressed. Once an additional battalion chief is hired, all battalion chiefs should then convert to the 56- hour shift schedule to provide better operational safety through consistent and timely command and control on emergency scenes.

During our engagement, Baker Tilly also noted that most administrative and operational programs necessary to run the department have been subordinated to captains with a battalion chief being the liaison for management and oversight. While the captains may be capable of managing these tasks, the additional responsibilities and required time commitment limit their ability to effectively complete their

Analysis of Fire Services
Service Level Analysis Baker Tilly
10 responsibilities and address issues related to their respective crews resulting in miscommunication and uncertainty. The addition of a battalion chief will position the command staff to lead the organization by setting goals, assist with policy development, identifying needs, developing plans, monitoring performance, and creating systems of accountability.

Future Staffing Priorities
As the organization continues to grow and the service population increases, a training officer/emergency medical services (EMS) coordinator, a full-time fire inspector, and an additional fire unit may be necessary to assure administrative compliance, unit coverage, and response capabilities. However, we do not foresee this type of increased staffing being needed in the near future based on the average annual growth in calls for the two cities. As illustrated in Table 4, the average annual growth in calls in the cities from 2012 to 2021 is 3.6%.

Table 4. Annual Calls for Service1
Year
Arroyo
Grande
Grover
Beach
Cities
Total
Annual
Change OCSD
Grand
Total
Annual
Change
2012 1,521 903 2,424 18.10% 513 2,937
2013 1,537 882 2,419 -0.20% 515 2.934 -0.10%
2014 1,562 908 2,470 2.10% 573 3,043 3.72%
2015 1,724 1,084 2,808 13.70% 528 3.336 9.63%
2016 1,824 1,152 2,976 6.00% 521 3.497 4.83%
2017 1,987 1,198 3,185 7.00% 583 3,768 7.75%
2018 1,856 1,098 2,954 -7.30% 566 3,520 4.58%
2019 1,814 1.049 2,863 -3.10% 570 3.433 -2.47%
2020 1,964 1,077 3041 6.20% 712 3.753 9.32%
2021 2,125 1,201 3326 9.40% 631 3,957 5.44%
CAGR2 3.79% 3.22% 3.58% 2.33% 3.37%
1 These numbers do not include automatic or mutual aid since we were only provided that information for partial years. 2 Compound annual growth rate.

Table 4 reflects the annual calls for service over the last ten years. Since Baker Tilly only received automatic or mutual aid data for the last three years and not the entire ten-year period, we did not include any automatic or mutual aid data in the above table as that would have skewed the annual compounded growth rate analysis. However, it should be noted that the average automatic or mutual aid calls during the last three-year period were not significant – reflecting less than five percent of total call volume.

Analysis of Fire Services
Service Level Analysis Baker Tilly
11 It was difficult for Baker Tilly to analyze call utilization and track productive and non-productive work hours, as neither the FCFA nor the City of Arroyo Grande’s Accounting Services Division track working hours by category. Accordingly, a recognized best practice in fire service is a staffing program that documents and displays daily staffing hours and locations. Such a program tracks and audits all hours charged to the individual employees and can be set up by specific categories for the type of work performed or leave taken. This allows the administrative staff to track all hours charged to daily staffing and specific events or programs in the FCFA budget, providing for immediate oversight and recognition of abnormal or unexpected hours used or accrued. The accounting of all hours by category can also provide for a more accurate budget forecast.

Recommendation 2. Acquire a staffing program to
manage and track all working and nonworking hours for
all FCFA personnel.

Another best practice is to know unit hour availability. Currently, the FCFA does not utilize a program to track activities and hours daily for each unit. Reliable data and statistics are necessary to evaluate the true time spent on calls for fire personnel to determine unit hour utilization.

While these numbers are available from the CALFIRE Emergency Command Center, they could be more easily accessed in a daily unit history program. Daily workload including fire prevention, training, station and apparatus maintenance, and public education are also tracked in these types of programs and is then demonstrated in a unit hour availability summary in addition to the unit hour utilization.

Recommendation 3. Improve the ability to track
company activity by developing or purchasing a program
capable of tracking all unit and personnel activity,
including apparatus and equipment.

The 2017 Strategic Plan recommended conducting an
operational/financial analysis of the FCFA as well as a Standards of Cover. This will assist in determining whether current service levels adequately address the service demand. In addition, a Community Risk Assessment is also warranted.

Recommendation 4. Conduct a Standards of Cover and
Community Risk Assessment to determine the
appropriate level of service to provide the community.

The Standards of Cover would be created using data provided by FCFA and others used to determine the current levels of response performance as quantified statistics. From this analysis, factors will be identified that

Analysis of Fire Services
Service Level Analysis Baker Tilly
12 would influence response performance and opportunities for delivery system improvement. The Standards of Cover would identify response time objectives, standards for measuring the effectiveness of department resources, and the deployment of those resources. A Standards of Cover is a best practice, and the report should be consistent with the format recommended by the Center for Public Safety Excellence, Community Risk Assessment: Standards of Cover, 6th Edition.

A Community Risk Assessment is based on numerous factors, including socioeconomic status, household composition, minority status and language, population and density, housing types, local land use and development, and the geography and natural hazards present throughout the community. These factors affect the number and type of resources, both personnel and apparatus, necessary to control or mitigate an emergency. A community risk assessment provides relevant information to the FCFA with recommendations of how to prepare their community to respond to emergency events and develop community resilience.

Both a Standards of Cover and Community Risk Assessment are essential for determining the appropriate staffing and deployment needs of the agency and should be performed by an outside independent third-party consultant. For planning purposes, we have added $50,000 to the FY 2023-24 FCFA budget forecast as an estimate for the cost of such a study.

Clerical and Administrative Support Staff
In the FY 2022-23 budget, there are 1.5 positions identified as administrative. As the organization continues to grow and the fire prevention program creates a more robust fee service program, there will eventually be a need to increase the current complement of staff to two full-time positions. It should be noted that in the fire chief’s proposed staffing plans, he recommends increasing the one part-time clerical staff to full-time in FY 2024-25. For planning and staff projection purposes, we have included the fire chief’s recommendation in our alternative staffing models later in this report.

Analysis of Fire Services
Service Level Analysis Baker Tilly
13 Fire Prevention and Community Risk Reduction
Currently, member agencies use their building official or contract building official for new construction plan review, permit requests, and field inspections. These building officials are identified as fire marshals.

Baker Tilly believes the position of a state-certified fire marshal as a position within the FCFA is necessary to conduct state-mandated fire inspections, as well as high-hazard occupancy inspections. These are technical inspections that take several hours each and require specialized training and education to interpret and enforce the appropriate Uniform Fire Code sections.

The FCFA is responsible for approximately 1,900 annual fire prevention inspections: 200 multi-unit and hotel inspections, 50 new business inspections, 1,500 annual business inspections, and roughly 30 plan check inspections. The FCFA is also responsible for over 165 state-mandated inspections such as schools, hospitals, care facilities, high-rise, and highhazard occupancies that require specialized permits. Currently, over 70% of business inspections are not being conducted. Consequently, fire prevention is not currently being supported at an acceptable level which creates a risk and liability concern.

There is a justifiable need for two positions responsible for fire prevention activities. The annual small business inspection load is approximately 1,500, which would normally be assigned to the field units. However, due to the low level of field staffing and unit availability, these inspections have not been done. In communities that have low field staffing levels, fire prevention is as equally important as fire suppression. One of the most effective ways to reduce fire calls is to have a strong prevention presence in the community. The result is a greater understanding of the community’s hazards/risks and mitigating contributory factors before they become a call for service. For these reasons, a full-time fire marshal position and a part-time inspector are warranted. However, due to the FCFA’s limited financial resources, contracting for these services would be more economical.

Recommendation 5. Contract for fire marshal and fire
inspection services.

Baker Tilly also recommends completion of NFPA 1730 Standard on Organization and Deployment of Fire Prevention Inspection and Code Enforcement, Plan Review, Investigation, and Public Education Operations. This document provides a structured process to guide a fire prevention professional to work through a prevention-based community

Analysis of Fire Services
Service Level Analysis Baker Tilly
14 risk assessment. Once the NFPA 1730 Standard is completed and/or the standards of cover or community risk assessment has been performed, a more thorough understanding of prevention staffing needs would be identified and would serve as the basis to guide future fire prevention needs.

Departmental Training
A battalion chief manages fire related training. Each employee is responsible for entering their training hours into an automated program as they complete the hours. The battalion chief has audit and oversight responsibilities to assure compliance standards. FCFA currently meets mandatory hourly requirements for the county and state.

FCFA contracts with a nurse educator to manage the requirements of the Local Emergency Medical Services Area (LEMSA) quality assurance review process and reporting while providing the required continuing education to remain an EMS provider. This arrangement addresses the requirements, but there is an ongoing commitment for staff oversight, control, and scheduling of this program.

Providing training on all shifts and dealing with the logistical issues such as identifying and obtaining permission to use various sites for training are challenging. Currently, OCSD provides a site for the ventilation prop and coordinates fire hydrant use for water flow evolutions. These are two of the most crucial functions that require reoccurring training. They are high risk/low frequency manipulative evolutions. Pumping water through hose lines and master stream appliances along with ventilation of a roof structure are critical to the mission of saving lives and property within the first few minutes of a fire. When OCSD is no longer a partner, the nearest option for this type of training is in Lompoc. Logistically, this is impractical due to driving time and a lack of coverage units for the FCFA. With limited options for local training sites there is little opportunity for live fire training. In most organizations these evolutions are conducted with a staff of evaluators on a routine basis. Staffing a reserve unit with overtime personnel or asking for a cover unit from CALFIRE would be the only option to meet the time commitment necessary for this type of training. We commend the FCFA for being highly active in the San Luis Obispo Training Officers group as well as having representatives on many special operations teams and oversight working groups within the County fire system. However, we noted that there is less than $15,000 budgeted annually for agency training, which is low, even for a smaller agency.

Recommendation 6. Increase the amount budgeted
annually for departmental training.

Analysis of Fire Services
Service Level Analysis Baker Tilly
15 Additional funding for securing training sites and staffing is necessary in order to properly provide the necessary training staff, especially suppression personnel, need.

During our interviews with FCFA union representatives, they voiced their concern that leadership development and succession planningrelated training was not afforded to floor personnel.

There are skill-set requirements for each position in the suppression ranks, but there is frustration in the lack of funding for the necessary technical training required of floor personnel that is not provided by FCFA. Their MOU allows for educational and training reimbursement only if funding is available, and there is not enough budgeted to address this demand. This has resulted in a financial cost for anyone taking a promotional exam that requires additional certifications. Additionally, there does not appear to be any leadership programs offered to floor personnel to encourage and develop the future leaders of the organization.

Recommendation 7. Develop a comprehensive training
program to address succession planning, and increase the budget for tuition reimbursement, thereby allowing
employees to complete the necessary certifications and
education required to advance through the ranks.

Management positions in FCFA should also be included in any leadership and management training opportunities offered by partner agencies to their managers and department heads.

Building and Facilities
During our onsite visit to the FCFA facilities, it was noted that the Oceano station is not in alignment with modern fire service standards or response criteria. The temporary housing unit is currently too far away from where the apparatus room is located, resulting in delayed response times during emergency calls, i.e., increased turnout times (time from dispatch to leaving the station). Turnout times should be no more than 60 seconds for emergency medical calls and 80 seconds for fire calls.

Recommendation 8. Move the OCSD station housing
closer to the apparatus room.

The OCSD station’s administrative office is also in the same physical location as the fire apparatus and equipment. This is an unsafe and unhealthy working condition, as employee workstations should not be in close proximity or exposed to diesel exhaust and byproducts, or carcinogens.

Analysis of Fire Services
Service Level Analysis Baker Tilly
16 Recommendation 9. Install a sealed door and/or wall to separate the office and living quarters from the
apparatus room and turnout storage areas.

Currently, there are no female firefighters in the FCFA which is not unusual for a smaller agency. Modern station design creates privacy and personal space for each member on duty.

Recommendation 10. Assess the living quarters to
determine if creating separate quarters for female
firefighters is feasible.

Evaluating and planning for modification to existing facilities to create separate living quarters for female firefighters would demonstrate the commitment of the organization to creating a supportive and inclusive work environment and would enhance recruitment of candidates.

During our visits to each station, we learned that the Motorola radio system platform upgrade has been budgeted and will be addressed soon.

However, we also discovered that the existing station alerting system needs repair at station 1 and upgrading is needed at stations 1 and 2 to allow for multi-unit dispatch. The phone system is an analog system and fails during significant rain occurrences. A voice over internet protocol (VoIP) system allows for greater clarity and dependability than the analog system. Increased functionality enhances efficiency by allowing call forwarding, routing, recording, online meetings, app integration, and can reduce ongoing costs as opposed to traditional infrastructure and hardware.

Recommendation 11. Allocate appropriate funding to
repair and/or upgrade the station alerting systems and
the existing phone system.

Vehicles and Equipment
Currently, there is no option for local routine maintenance of agency apparatus or vehicles. FCFA personnel must schedule all repairs and maintenance with a vendor in Paso Robles. This creates both a financial and operational burden on the agency. A firefighter must drive the apparatus, along with personnel following in a different vehicle, in order to transport the firefighter back to the station. Depending on traffic this could take up to two hours of overtime for each or require taking a unit out of service. While major repairs must be done at the vendor’s, regular maintenance and minor repairs could be done by either a qualified local vendor or by the City of Grover Beach’s mechanic. We learned that the fire chief is researching a mobile mechanic for the routine maintenance service. A mobile maintenance service is a more effective way to address

Analysis of Fire Services
Service Level Analysis Baker Tilly
17 routine maintenance and minor repairs of fire vehicles rather than driving them out of the area.

Recommendation 12. Request proposals from local
vendors, as well as the City of Grover Beach, to perform minor repairs and regular maintenance on agency vehicles.

FCFA staff should compare any maintenance service proposals with the cost for the City of Grover Beach to perform similar maintenance services.

Since the City of Grover Beach is a participating member of the FCFA, collaborating on vehicle repairs could be a viable alternative. However, should it be decided to have the City of Grover Beach assist in minor repairs, it is recommended that the mechanic obtain their California State Fire Training Emergency Vehicle Technician 1 (EVT) certification. Any collaboration between agency partners and the FCFA could assist in increasing the organization’s efficiency and effectiveness.

During our engagement, concern regarding the lack of interagency collaboration was expressed, leading to a lack of harmony and mutual understanding in the workplace. Opportunities exist to open the lines of communication between partner agencies and Baker Tilly recommends steps in this direction.

Recommendation 13. Strengthen interagency
relationships and collaboration between FCFA personnel
and member agencies.

The 2017 Strategic Plan discussed the need for a vehicle replacement program; however, the agency still does not have one. The fire chief is to be commended for using Office of Emergency Service (OES) funding and other creative measures to fund vehicle repairs and obtain replacement vehicles when possible. However, an established vehicle replacement program and the funding of it is still needed.

Recommendation 14. Develop an equipment replacement
fund for all mission critical equipment and apparatus.

We reviewed the agency’s written operational policies and procedures and concluded additional work in this area is needed. This topic was also addressed in the 2017 Strategic Plan. Currently, the FCFA staff are in the process of transferring the existing documents to Lexipol, an electronic records system. While some progress has been made, there are only about 30 established policies and procedures in place, and according to floor personnel, some are either not current or are in direct conflict with one another.

Analysis of Fire Services
Service Level Analysis Baker Tilly
18 Recommendation 15. Develop a comprehensive policy
and procedures manual, building upon efforts currently
underway.

Analysis of Fire Services
Fire Chief’s Recommended Staffing Plans Baker Tilly
19 Fire Chief’s Recommended Staffing Plans
At the onset of this engagement, the fire chief provided Baker Tilly with two proposed staffing models that he would like to implement over the next several years. For the purposes of illustration, we refer to these plans as Plan A and Plan B.

Plan A – Incremental staffing increase with a 4th Company in FY 2029 The fire chief’s Plan A adds a total of 22.5 FTE new positions over the next six years and a 4
th engine company in FY 2029 as illustrated in Table
5 below.

Table 5. Plan A – Incremental staffing increase with 4th Company in FY 2029 PLAN A
Station Companies Staffing Additions
A/P/T
Arroyo
Grande
Grover
Beach 3rd 4th Total FY24 FY25 FY26 FY29 Total
Chief 1 1 0
Admin 2 2 0.5 0.5
Fire Marshal 1 1 1 1
Prevent Spec 1 1 1 1
EMS Coordinator 1 1 1 1
Batt Chief 3 3 1 1
Captain 1 3 3 3 3 13 1 3 4
Engineer 3 3 3 3 12 2 3 5
Firefighter 3 3 3 6 15 3 6 9
Total 10 9 9 9 12 49 6 2.5 2 12 22.25
We have reviewed and researched the FCFA 2017 Strategic Plan and other supporting documents. As the organization continues to grow and the community expands, a training officer/emergency medical services coordinator, a full-time fire inspector, and a fourth company may be necessary to assure administrative compliance, unit coverage, and response capabilities. However, as was cited in the 2017 Strategic Plan, Community Risk Assessment/Standards of Cover (CRA/SOC) study would need to be conducted to identify the type of resource, fire station location, and staffing levels to suit the communities’ needs.

Plan B – An immediate staff increase of 12 and adding a 4th Company in FY 2027
Plan B is a more aggressive staffing plan that adds a total of 24.5 FTE positions over the next four years and a 4th engine company in FY 2027

Analysis of Fire Services
Fire Chief’s Recommended Staffing Plans Baker Tilly
20 as illustrated in Table 6 below. While the fire chief’s plan also called for an additional company in FY 2032, these proposed staffing increases are beyond the scope of our forecast period and are therefore not included in Table 6 or in cost estimates.

Table 6. Plan B – Immediate staff increase of 12 with 4th Company in FY 2027 PLAN B
Station Companies Staffing Additions
A/P/T
Arroyo
Grande
Grover
Beach 3rd 4th Total FY 24 FY 27 Total
Chief 0
Deputy Chief 1 1 1 1
Admin 2 2 0.5 0.5
Fire Marshal 1 1 1 1
Prevent Spec 2 2 2 2
EMS Coordinator 1 1 1 1
Battalion Chief 3 3 1 1
Captain 3 3 3 3 13 4 4
Engineer 3 3 3 3 12 2 3 5
Firefighter 4 4 4 3 15 6 3 9
Total 10 10 10 10 9 51 12.5 12 24.5
As indicated above, Baker Tilly recommends completing a CRA/SOC before considering either of these plans, Plan A or Plan B. And while our assessment did not allow us the ability to analyze unit hour utilization, consecutive call patterns, and overall community risk assessment, a standards of cover report would allow for this assessment. However, based on the information we have reviewed, including current run loads and type of calls, it is our position that a fourth company is not currently warranted at this time.

Costs associated with these two plans are substantial, as illustrated in Table 7 below. In fact, operating costs would double in about five years under Plan A with costs doubling in four years under Plan B.

Table 7. Total Cost
FY 22
Actual
FY 23
Budget
FY 24
Estimate
FY 25
Estimate
FY 26
Estimate
FY 27
Estimate
FY 28
Estimate
FY 29
Estimate
Plan A $6,771 $7,214 $9,119 $10,120 $11,700 $11,805 $12,415 $15,512 Plan B $6,771 $7,214 $10,203 $10,874 $11,905 $14,729 $15,051 $15,592

Analysis of Fire Services
Fiscal Analysis Baker Tilly
21 Fiscal Analysis
Both cities of Arroyo Grande and Grover Beach will face significant increases in fire contributions to the FCFA, even if fire staffing remains at its current level, for three reasons:
 Contributions have remained fixed for four years while FCFA expenditures have continued to rise. This is unsustainable. The only reason that FCFA is not already in deficit is that actual expenditures have come in around $310,000 under budget per year over the past three years;
 OCSD intends to withdraw from FCFA and that will reduce FCFA revenues by $1,138,000, with the potential of no corresponding reduction in FCFA expenditures to serve the two remaining members; and
 FCFA expenditures will rise further due to the need to increase salaries to a level that allows for the recruitment and retention of personnel as well as CalPERS investment losses that will continue to increase pension contributions.

As part of this engagement, Baker Tilly has prepared a user-friendly and multi-faceted fiscal model for FCFA and the two cities, which can be used to run numerous scenarios showing the impact on all three agencies given various outcomes regarding the following key variables:
 OCSD: Their intention is to leave the FCFA effective July 1, 2023.

On January 11, 2023, the OCSD Board approved the initiation of the divestiture process with the San Luis Obispo Local Agency Formation Commission (LAFCO). The OCSD’s divestiture
application was received by LAFCO on February 6, 2023.

Divestiture is a discretionary action on the part of LAFCO. Part of that process will likely involve commissioning a study of OCSD’s options. This study, together with the LAFCO decision-making process, may take 6-12 months. If the decision is for another agency to take on the responsibility of providing fire service to the Oceano area, that transition may take another 12 to 18 months.

Therefore, OCSD may be dependent upon FCFA for fire service for another year or two. The OCSD contribution of $1,138,000 is approximately equal to their current property tax revenue. Their property tax revenue is what they would give up should the County take over responsibility for providing fire service.

Therefore, FCFA could likely expect to receive at least an amount

Analysis of Fire Services
Fiscal Analysis Baker Tilly
22 comparable to OCSD’s property tax revenue for each additional year OCSD remains either a member of FCFA or contracts back fire service, if not more. The forecast currently assumes OCSD is no longer a member effective July 1, 2023, but the first step is determining whether OCSD remains or contracts back services with FCFA, and when.
 Staffing: The FCFA fire chief has proposed two options for increases in station staffing, administration, fire prevention, and training, based on OCSD remaining in FCFA. Since staffing is the main cost driver, it will be a major determinant of the future level of city contributions. Thus, the FCFA Board must determine the appropriate level of staffing, with or without OCSD, given the current trend in call volume. Baker Tilly has examined several alternative staffing packages, and the fiscal model can select any one of these options (the fire chief’s two plans and Baker Tilly’s five plans) and show the resulting cost impact over time. The current forecast assumes the lowest staffing cost option (Baker Tilly plan A-5, which assumes the FCFA not providing any first responder fire service to the Oceano community, reducing staffing to two 3-person companies, adding a battalion chief, and contracting for fire marshal and fire inspector services).  Salaries: FCFA staff appear to be below the average level of salaries for comparable agencies within the central coast region.

Inflation has been high for two years, but while long-term estimates assume the CPI will fall back to the 2 to 3% range, this recent inflationary rise adds pressure to increase wage levels.

Salaries are a meet and confer item, but it seems reasonable to assume annual increases in excess of the Federal Reserve’s inflation goal of 2%. The fiscal model can select wage growth amounts by year, and the forecast is based on salary and benefits as recommended by the City of Arroyo Grande’s director of administrative services who serves as the FCFA finance director.

This increase includes COLAs, merit/step increases, and savings from employee turnover.
 Reserves: An appropriate reserve level must be identified and maintained for FCFA. While contribution levels are a known quantity, the major risk is that higher costs may be incurred that are not reimbursed by the state for wildfire strike team related overtime. The fiscal model assumes that contributions are set to maintain a 10% reserve for FCFA over time.
 Grants: The potential exists for SAFER grants to be received from the federal government to offset the cost of eligible new staffing increases. SAFER grants are competitive, and thus their receipt is

Analysis of Fire Services
Fiscal Analysis Baker Tilly
23 not guaranteed. They also offset costs for only three years and after that FCFA must maintain that higher staffing level and absorb the resulting cost. Thus, these grants are short term, and not an ongoing benefit. However, if qualifying staff increases are going to be approved, even the short-term benefit would help offset the rise in contribution levels that would otherwise be required to be financed by the FCFA. The fiscal model can show the impact of SAFER grants based on proposed staffing increases, but the current forecast assumes no receipt of such grants.  Cost Allocation: Costs are currently allocated between member agencies based one-third on population, one-third calls for service and one-third on station staffing levels. There are also direct allocations regarding HazMat and debt service costs. The fiscal model assumes these allocation factors are updated for recent population and service calls, and to omit the OCSD.

Consequently, the resulting allocation is between only the two cities, and would result in a small percentage shift from Grover Beach to Arroyo Grande, as shown in Table 8 below.

Table 8. Percentage Allocation of Contributions Between Member Agencies Cost Allocation
Share
Current
w/OCSD
Revised
w/OCSD
Current
w/o OCSD
Revised
w/o OSCD
Arroyo Grande 45.01% 44.99% 56.16% 57.65%
Grover Beach 35.14% 32.23% 43.84% 42.35%
Oceano CSD 19.85% 22.68% 0.00% 0.00%
Total 100.00% 100.00% 100.00% 100.00%
 OCSD Obligations: The third amendment to the current FCFA agreement provides for the possible departure of OCSD and a negotiation that would define a contribution by OCSD for unfunded liability, equipment, and debt service contributions upon leaving FCFA. These amounts are unknown at this time and thus excluded from the forecast and, while unlikely to make a major difference in the ongoing level of contribution by the two cities, this financial obligation may result in an increase in reserves.

Given these assumptions, FCFA costs will continue to rise, and the loss of OCSD reduces revenues by $1,138,000. Figure 1 shows the resulting impact of current staffing with no change in city contribution levels (solid red line) compared to costs (see bars, split between staffing and all other costs). Even when other revenues such as state reimbursements for strike

Analysis of Fire Services
Fiscal Analysis Baker Tilly
24 team overtime are added in (dotted red line), total revenues are expected to fall below the anticipated expenditures in FY 2022-23 and well below those in the next two fiscal years.

Figure 1. FCFA Expense versus Revenue Assuming no OCSD, Current Staffing Levels, and Continued Flat City Contributions
Clearly, continuing the flat contributions by the two cities is not sustainable. Absent new FCFA funding, the contributions from member agencies will have to increase to fill the gap. The impact on the two cities can be determined by the factors entered in the FCFA fiscal model. There are many potential scenarios to consider using the forecast assumptions noted above, but the two most important are what happens with OCSD, and what level of staffing is proposed for FCFA. The two issues are interwoven in that if OCSD is to be serviced, there will have to be a higher staffing level. However, at the two recent council meetings by the two cities on the issue of fire services, it was also proposed that staffing be increased even if OCSD is not being serviced.

Accordingly, we have prepared three scenarios involving OCSD, and under each scenario we show the impact of a high, medium, and low level of staffing. These plans do not include the fourth engine company, training captain, EMS coordinator, and deputy chief that are contained in the Fire Chief’s Plans A and B. However, they do include an additional battalion chief, as well as fire prevention services and clerical support.

The potential levels of staffing included in these three scenarios are shown in the following four tables.

Analysis of Fire Services
Fiscal Analysis Baker Tilly
25 Plan A-2 provides three 3-person companies, an additional battalion chief, contractual costs associated with fire marshal/fire inspector services, and an additional 0.5 FTE clerical position. A-2 staffing is shown in Table 9.

Table 9. Plan A-2 Staffing Configuration and Additions by Year PLAN A-2
Station Companies Staffing Additions
A/P/T
Arroyo
Grande
Grover
Beach 3rd 4th Total FY 24 FY 25 FY 26 FY 29 Total
Chief 1 1 0
Admin 2 2 0.5 0.5
Fire Marshal C 0 0
Inspector - PT C 0 0
EMS Coordinator 0 0
Battalion Chief 3 3 1 1
Captain 3 3 3 9 0
Engineer 3 3 3 9 2 2
Firefighter 3 3 3 9 3 3
Total 6 9 9 9 0 33 6 0.5 0 0 6.5
C = Fire Marshal and Inspector functions provided by contract service (assumes $100,000) Plan A-3 provides two 3-person companies and one 2-person company, an additional battalion chief, a fire marshal, a half-time fire inspector, and an additional 0.5 FTE clerical position. A-3 staffing is shown in Table 10.

Table 10. Plan A-3 Staffing Configuration and Additions by Year PLAN A-3
Station Companies Staffing Additions
A/P/T
Arroyo
Grande
Grover
Beach 3rd 4th Total FY 24 FY 25 FY 26 FY 29 Total
Chief 1 1 0
Admin 2 2 0.5 0.5
Fire Marshal 1 1 1 1
Inspector - PT 0.5 0.5 0.5 0.5
EMS Coordinator 0 0
Battalion Chief 3 3 1 1
Captain 3 3 3 9 0
Engineer 3 3 3 9 2 2
Firefighter 3 3 6 0
Total 7.5 9 9 6 0 31.5 3 1 1 0 5

Analysis of Fire Services
Fiscal Analysis Baker Tilly
26 Plan A-4 provides two 3-person companies and one 2-person company, an additional battalion chief, and fire marshal/fire inspector services pursuant to a contract and an additional 0.5 FTE clerical position. And while the FCFA has chosen to run a similar two-person staffing model for the OCSD area, it should be noted that staffing an engine with two personnel might not be considered a best practice in an urban fire organization. A-4 staffing is shown in Table 11.

Table 11. Plan A-4 Staffing Configuration and Additions by Year PLAN A-4
Station Companies Staffing Additions
A/P/T
Arroyo
Grande
Grover
Beach 3rd 4th Total FY 24 FY 25 FY 26 FY 29 Total
Chief 1 1 0
Admin 2 2 0.5 0.5
Fire Marshal C 0 0
Inspector - PT C 0 0
EMS Coordinator 0 0
Battalion Chief 3 3 1 1
Captain 3 3 3 9 0
Engineer 3 3 3 9 2 2
Firefighter 3 3 6 0
Total 6 9 9 6 0 30 3 0.5 0 0 3.5
C = Fire Marshal and Inspector functions provided by contract service (assumes $100,000) Plan A-5 provides the lowest level of staffing: two 3-person companies, an additional battalion chief, fire marshal/fire inspector services pursuant to a contract and an additional 0.5 FTE clerical position. This staffing model would only be an option if just the two cities were being served and not providing first responders fire service in the Oceano area. In addition, it should be noted that this staffing model results in the elimination of 2.5 FTE positions. A-5 staffing is shown in Table 12.

Analysis of Fire Services
Fiscal Analysis Baker Tilly
27 Table 12. Plan A-5 Staffing Configuration and Additions by Year PLAN A-5
Station Companies Staffing Additions
A/P/T
Arroyo
Grande
Grover
Beach 3rd 4th Total FY 24 FY 25 FY 26 FY 29 Total
Chief 1 1 0
Admin 2 2 0.5 0.5
Fire Marshal C 0 0
Inspector - PT C 0 0
EMS Coordinator 0 0
Battalion Chief 3 3 1 1
Captain 3 3 9 -3 -3
Engineer 3 3 9 -1 -1
Firefighter 3 3 6 0
Total 6 9 9 0 0 24 -3 0.5 0 0 -2.5
C = Fire Marshal and Inspector functions provided by contract service (assumes $100,000) The OCSD scenarios depend upon the outcome of the LAFCO process as well as whether San Luis Obispo County might provide a long-term fire service solution for the Oceano area. In addition, providing fire service to the Oceano area would be in excess of the OCSD’s property tax revenue, so the question is whether the County would be willing to augment the funding FCFA receives on behalf of OCSD in an amount beyond the property tax revenue of the OCSD.

Scenario 1. OCSD stays under contract with FCFA for up to another year, then leaves.

This is a likely outcome given the 6 to 12 months a LAFCO decision is expected to take. The payment to FCFA would be the amount OCSD receives in property tax. No OCSD revenue would be received in FY 2024-25 and thereafter. The three preferred staffing levels proposed for this scenario are as follows:
 Low Cost: Plan A-4 (two 3-person companies and one 2-person company, contract prevention staff) shown in Table 13
 Medium Cost: Plan A-3 (two 3-person companies and one 2- person company, in-house prevention staff) shown in Table 14  High Cost: Plan A-2 (three 3-person companies, contract prevention staff) shown in Table 15

Analysis of Fire Services
Fiscal Analysis Baker Tilly
28 Table 13. Low-Cost Option: FCFA forecast with OCSD scenario 1/staffing Plan A-4 ($ in 000) Note that in this and subsequent forecast tables, Other Revenue for FY23 includes a one-time $887,401 transfer from the City of Arroyo Grande to reimburse prior year pension unfunded accrued liability (UAL) costs which should have been paid by the city. Other revenue also includes inspection fees (expected to increase in FY24 due to more inspections being conducted), fire prevention program revenues, and strike team reimbursements. (NOTE – this financial information and associated tables have been updated since the City Council presentations in late February.) Table 14. Medium-Cost Option: FCFA forecast with OCSD scenario 1/staffing Plan A-3 ($ in 000)

Analysis of Fire Services
Fiscal Analysis Baker Tilly
29 Table 15. High-Cost Option: FCFA forecast under OCSD scenario 1/staffing Plan A-2 ($ in 000) Scenario 2. OCSD stays under contract with FCFA for an indefinite term with OCSD’s funding capped at their total property tax revenue amount.

This could be the outcome if LAFCO and the County decline to assign a new fire service provider for OCSD. The payment to FCFA would be limited to the amount OCSD receives in property tax, which is less than the proportion that would be assigned if OCSD remained a member of FCFA, and it is assumed that no additional funding is provided by the County. The three preferred staffing levels proposed for this scenario are as follows:
 Low Cost: Plan A-4 (two 3-person companies and one 2-person company, contract prevention staff) shown in Table 16
 Medium Cost: Plan A-3 (two 3-person companies and one 2- person company, in house prevention staff) shown in Table 17  High Cost: Plan A-2 (three 3-person companies, contract prevention staff) shown in Table 18
However, should the FCFA provide first responder fire services to the Oceano area for an indefinite period, Baker Tilly recommends Plan A-2 as the ideal staffing deployment.

Analysis of Fire Services
Fiscal Analysis Baker Tilly
30 Table 16. Low-Cost Option: FCFA forecast under OCSD scenario 2/staffing Plan A-4 ($ in 000) Table 17. Medium-Cost Option: FCFA forecast under OCSD scenario 2/staffing Plan A-3 ($ in 000)

Analysis of Fire Services
Fiscal Analysis Baker Tilly
31 Table 18. High-Cost Option: FCFA forecast under OCSD scenario 2/staffing Plan A-2 ($ in 000) Scenario 3. OCSD stays under contract with FCFA for an indefinite term with appropriate county financial support.

This could be the outcome if LAFCO and the County decline to assign a new fire service provider for OCSD, and the County agrees to supplement the payment to the FCFA so that an amount equal to the proportional allocation to the two cities is paid. The three preferred staffing levels proposed for this scenario are as follows:
 Low Cost: Plan A-4 (two 3-person companies and one 2-person company, and contract fire prevention) shown in Table 19  Medium Cost: Plan A-3 (two 3-person companies and one 2- person company, in house prevention staff) shown in Table 20  High Cost: Plan A-2 (three 3-person companies, contract prevention staff) shown in Table 21
However, as with Scenario 2, should the FCFA provide first responder fire services to the Oceano area for an indefinite period, Baker Tilly recommends Plan A-2 as the ideal staffing deployment.

Analysis of Fire Services
Fiscal Analysis Baker Tilly
32 Table 19. Low-Cost Option: FCFA forecast under OCSD scenario 3/staffing Plan A-4 ($ in 000) Table 20. Medium-Cost Option: FCFA forecast under OCSD scenario 3/staffing Plan A-3 ($ in 000)

Analysis of Fire Services
Fiscal Analysis Baker Tilly
33 Table 21. High-Cost Option: FCFA forecast under OCSD scenario 3/staffing Plan A-2 ($ in 000) For the purpose of comparison, we examined the trend in fire costs of nearby cities to those of FCFA. Figure 2 compares projected FCFA costs under staffing plans A-4 and A-5, and its current level of staffing, to the projected costs for Paso Robles, Lompoc, Atascadero, and Pismo Beach.

Note that Pismo Beach only has 2-person companies, and under its special “Amador Plan” contract with CALFIRE, one of its fire companies is considered a “state asset” that responds to wildfires as needed, resulting in Pismo Beach paying less as a result. We have been informed that any future CALFIRE contract arrangement will no longer include the Amador Plan provision resulting in higher contractual costs.

Analysis of Fire Services
Fiscal Analysis Baker Tilly
34 Figure 2. Projected Costs for FCFA and Nearby Cities ($ in 000) For budget planning purposes, Table 22 shows the FY 2023-24 impact on the two cities depending on the OCSD scenario and the corresponding preferred FCFA staffing plan. Scenarios 1 and 2 have the same effect in FY 2023-24, but Scenario 2 results in a lower burden on the cities in future years.

Table 22. FY 2024 Contribution by Cities and Increase Over FY 2023 ($ in 000) Plan
FY 2024 Contribution Increase from FY 2023 Table
Number Arroyo Grande Grover Beach Arroyo Grande Grover Beach OCSD stays for a limited period of time - up to 12 months (Scenario 1):

Plan A-4 $3,796 $2,812 $1,215 $797 13
Plan A-3 $3,733 $2,766 $1,152 $751 14
Plan A-2 $4,098 $3,034 $1,517 $1,019 15
OCSD stays for an indefinite period with a capped financial contribution (Scenario 2):

Plan A-4 $3,796 $2,812 $1,215 $797 16
Plan A-3 $3,733 $2,766 $1,152 $751 17
Plan A-2 $4,098 $3,034 $1,517 $1,019 18
OCSD stays with financial contribution from the County (Scenario 3):

Plan A-4 $3,621 $2,633 $1,040 $618 19
Plan A-3 $3,463 $2,490 $882 $475 20
Plan A-2 $3,748 $2,695 $1,167 $680 21

Analysis of Fire Services
Fiscal Analysis Baker Tilly
35 Figure 3 shows the range of potential FCFA contribution levels by the two cities through FY 2028-29, depending on OCSD scenario and preferred FCFA staffing level. The low level is Staffing Plan A-4 with OCSD Scenario 3 (County support), and the high level is Staffing Plan A-2 with no service to OCSD.

Figure 3. Range of FCFA Contributions by Cities Through FY 2029 ($ in 000) The actual impact on the two cities will depend upon:
 Whether FCFA obtains a new revenue source that would allow city contributions to increase slowly over time and avoid the shock of a large increase in contribution starting in FY 2023-24.  Lacking added FCFA revenue, whether each city can get approval of increased revenues for itself. The revenue generating capacity and voter preferences has varied between the two cities in the past, so their respective revenue-generating capacities may differ.

The local voter-approved sales tax in Grover Beach is 1.5%, and in Arroyo Grande it is 0.5% (and in that city a recent ballot measure to increase the tax another 1.0% was narrowly defeated in 2022).  Lacking additional revenue, each city would make its own judgments about the priority of non-fire services, and the areas in which to make expenditure reductions. On a short-term basis each has capacity to defer capital projects. Arroyo Grande has its local sales tax in a separate fund which could bear a greater share than it presently contributes; however, that would be at the expense of other services. However, this is not a sustainable long-term

Analysis of Fire Services
Fiscal Analysis Baker Tilly
36 strategy as the cities must continue to invest in the upkeep of its transportation, parks, and public building infrastructure.

One revenue option is a parcel tax or a Mello-Roos assessment that would provide a dedicated funding source for FCFA, but this requires a twothirds voter approval. A 2020 California Court of Appeals ruling currently allows for a majority vote if the tax is enacted through the voter initiative process, but an initiative planned for the ballot in November 2024 seeks to repeal that ruling retroactively. Of the 29 parcel tax ballot measures placed on the November 2022 ballot statewide by a local nonschool agency, 14 were successful, eight of which were tax renewals, and six were new taxes. Such a parcel tax would require an annual inflation adjustment that would allow it to address higher fire costs over time. The timing of such a vote is an issue as higher contributions are needed starting FY 2023-24, and there is a lag time getting onto the next property tax bill.

Another revenue option is a sales tax. If imposed by the FCFA, it would be a special tax and require a two-thirds voter approval. The maximum allowed in a district comprising both cities would be a 0.5% rate, because Grover Beach accounts for 1.5% of the 2.0% local sales tax capacity available under state law, and the rate would need to be uniform across both cities. Of the 10 special sales tax ballot measures placed on the November 2022 ballot statewide (requiring a two-thirds vote), four were successful and six failed. If a 0.5% tax were placed on the same ballot independently by both cities, it could be done as a general tax for each, as has previously been done in both cities.

Recommendation 16. Assess the viability and potential
of a revenue enhancement measure to adequately finance
the operational and capital needs of the FCFA.

Analysis of Fire Services
Alternative Models Baker Tilly
37 Alternative Models
The FCFA has done a commendable job in providing basic fire suppression services to its partner agencies given the limited financial resources, constrained operating budget, and organizational challenges.

With OCSD submitting an application for divestiture of fire service responsibilities, FCFA is entering a period of uncertainty. It will take from 6 to 12 months for LAFCO to take action on this application and longer for the successor fire service provider in Oceano to come on-line. LAFCOs analysis will inform the options available, but the list of alternatives is not that long. They include:

1. Maintain the JPA pooled FCFA structure to serve the two cities (Plan A-5) and possibly provide limited term (Plan A-4) or longerterm service (Plan A-2) to service the Oceano community via contract;

2. Revert to two stand-alone independent city fire departments;

3. Contract out service delivery to CALFIRE;

4. Dispense with the JPA structure and simply have one city (Grover Beach) contract for fire service delivery with Arroyo Grande (currently the employer);

5. Pursue a broader regional service delivery model to include Pismo Beach and/or the Nipomo area.

Baker Tilly recommends Option 1 in the near / medium term with a focus on Option 5 in the longer term to maximize regional efficiencies.

Each Option is reviewed in more detail below.

Maintain the JPA pooled FCFA structure to serve the two cities and possibly provide short-term or longer-term service to Oceano via contract Providing Service to Oceano on a Short-Term Basis
This is essentially the status quo condition. Since it is not likely that OCSD will be able to obtain approval for its divestiture application by the end of June 2023, it will likely have to provide fire services into the next fiscal year. The easiest way to provide for this would be via a contract with FCFA whereby the Authority would provide staffing at the Oceano

Analysis of Fire Services
Alternative Models Baker Tilly
38 station commensurate with what OCSD could afford, which is assumed to be the level of their property tax revenue. This would likely result in a two-person company at the Oceano station on a 24/7 basis. This option would be an enhancement of the existing service as the Oceano station is only staffed 1/3 of the time. This alternative staffing option (Plan A-4) provides two 3-person companies (one in each city) and one two-person unit (in Oceano), plus a battalion chief and contract for fire marshal and inspection services. This staffing model is being recommended as a temporary measure until a permanent decision of fire service for the Oceano community can be determined. The cost for this alternative is reflected in Table 23 below.

Table 23. Plan A-4 Two Three-Person and One Two-Person Companies Without Added County Funding Support ($ in 000)
However, it should be noted that the above level of service is not consistent with what Baker Tilly would find satisfactory on a longer-term basis, but it may have to suffice until LAFCO determinations are finalized and a successor service provider is ready to step in with additional funding.

Baker Tilly believes the JPA structure is worth keeping in place, mostly to support a future broader regional service provider, perhaps with the County to include both Oceano and Nipomo or with these latter two stations and the City of Pismo Beach.

Providing Service to Oceano on a Longer-Term Basis
Should a decision be made resulting in the FCFA providing fire service to the Oceano community on a more permanent basis, then Baker Tilly would recommend a three 3-person company deployment (Plan A-2).

This deployment would provide a 3-person company at each station

Analysis of Fire Services
Alternative Models Baker Tilly
39 (Arroyo Grande, Grover Beach and Oceano). This deployment would be more consistent with industry practices and would result in the following costs as illustrated in Table 24.

Table 24. Plan A-2 – Three Three-Person Companies Without Added County Funding Support ($ in 000) Providing Service to Only the Two Cities
Based on call volume, Baker Tilly would recommend a two 3-person company deployment to service the two cities (Arroyo Grande and Grover Beach) until such time a Standards of Cover can be performed and determine the staffing and station location for a two-station model.

The cost for this model is depicted in Table 25 and includes an additional battalion chief and contracting for fire marshal and inspection services.

Table 25. Plan A-5 – Two 3-Person Engine Companies, Added Battalion Chief and Contracted Prevention Services, Service Only the Two Cities, Without OCSD ($ in 000)

Analysis of Fire Services
Alternative Models Baker Tilly
40 It should be noted that with a two-engine company model, receiving a strike team and overhead reimbursement might be challenging, given staffing resources. Therefore, to be conservative, we have excluded both strike team overtime costs and associated state reimbursements from Plan A-5. Should FCFA staff want to adjust this amount prospectively, this can easily be adjusted in their fiscal model.

Revert to stand alone independent city fire departments Under this alternative, the JPA would be dissolved, and the cities would revert to independent non blended services. This would result in cost increases as currently shared services would have to be delivered on an independent non-shared basis. Management, support and training costs would increase - leaving no economies of scale. Consequently, Baker Tilly does not believe that having individual, stand-alone fire departments in each city is a viable alternative for fire protection and suppression services from both a cost and operational perspective. And since the shared services arrangement has worked well for over ten years, Baker Tilly believes this would be a step backwards.

Contract out service delivery to CALFIRE
The State Department of Forestry and Fire Protection, otherwise known as CALFIRE, is the largest fire department in California, and it commonly provides services via a cooperative agreement to local governments.

Currently, CALFIRE serves the following local governments via a cooperative agreement:
 31 out of 58 counties (including San Luis Obispo County)  39 out of 482 cities (including Pismo Beach in SLO County and 19 cities in Riverside County)
 25 fire districts
 42 special districts
CALFIRE is very experienced with wildland interface and rural areas and much of its service area tends to be in such areas. Generally, it provides less contract services in more urbanized areas. Large fire service providers either via contract or via a tax share agreement to urbanized cities include the Orange County Fire Authority, the Los Angeles County Fire Protection District, and the San Bernardino County Fire Protection District. Collectively, these large fire service providers serve far more cities than does CALFIRE.

CALFIRE might be willing to provide a bid to FCFA for services, but in the view of Baker Tilly it is unlikely to reduce costs relative to current FCFA costs. In addition, contracting with CALFIRE would reduce local

Analysis of Fire Services
Alternative Models Baker Tilly
41 control relative to the shaping of service levels and other similar matters.

CALFIRE is not a common choice for California cities when it comes to a service provider. It is much more common for counties to work with CALFIRE. This probably reflects the rural/urban split mentioned above.

One City to contract for fire service delivery with the other City Should the JPA structure cease to exist at some point in the future, since all FCFA employees are technically employees of the City of Arroyo Grande, another alternative delivery model could have the City of Grover Beach contracting for fire service from the City of Arroyo Grande. This would not be a unique arrangement as cities throughout the State contact for various municipal services with neighboring jurisdictions. For example, the cities of Pacific Grove and Carmel both contract for fire service with the City of Monterey, and Stanford University contracts for fire service with the City of Palo Alto. And while shifting fire service to one city may address a number of operational and organizational issues, it would also shift a lot of liability and financial risks to one city as well; namely, Arroyo Grande. Consequently, should the cities decide to explore this alternative service delivery model, more extensive fiscal and operational assessment would be warranted.

Regional Consolidation
Regionalizing service delivery can often result in savings from economies of scale in such areas as management, technology, and specialized services. In the fire service, local service delivery from neighborhood fire stations typically does not change much in terms of staffing or apparatus types, although improvements in training, career opportunities, and some support services can be found. Most savings will be from shared support services, and overall management and regional consolidation is becoming quite common in the fire service. The primary reason is obtaining economies of scale in operations primarily in management and technical areas. Currently, the Orange County Fire Authority serves 23 of the 34 cities in the County and approximately 2 million out of the 3.2 million of the residents of the County. The even larger Los Angeles County Fire Protection District serves 57 out of the 88 cities in that county either via contract or by tax share.

Regional fire service delivery makes intuitive sense in the Five Cities area of southern San Luis Obispo County, because it is a geographically distinct area being composed of a broad coastal plain running north from the Santa Barbara County line to Pismo Beach where the coastal mountains march down to the Pacific Ocean and force Highway 1/101 to turn inland. The map on the following page shows the five fire stations

Analysis of Fire Services
Alternative Models Baker Tilly
42 found in this region. Two are operated under cooperative agreement by CALFIRE for the County of San Luis Obispo and the City of Pismo Beach, and three are operated by FCFA.

Pursuing this type of regional consolidation would enable the area to maximize economy of scale savings for management and technology while also growing local control via the FCFA JPA.

Figure 4. Regional Map
1 1Map provided by the County of San Luis Obispo
As was mentioned previously, the OCSD has initiated a divestiture application with the San Luis Obispo LAFCO. This process is expected to take 6 to 12 months. Public input will be solicited as part of the process, and it is quite possible LAFCO will decide to retain a consultant to explore fire service options.

There will be a period of uncertainty as the OCSD pursues the divestiture process since fire service delivery for Oceano will be in limbo, but during the study process OCSD will be responsible for continuing to deliver services to the best of its ability. FCFA has determined that it will provide contract services to the OCSD during the interim, which is certainly a good approach, given the circumstances. FCFA is not under any statutory obligation to deliver services via contract but, given its long running partnership with the OCSD, some support will probably be expected by LAFCO and the County, and such support will build support for a regional approach in the future. FCFA is certainly free to advocate for the benefits of a regional approach as LAFCO processes the divestiture application.

Analysis of Fire Services
Governance Structure Baker Tilly
43 Governance Structure
The current governing board of the FCFA consists of three members, an elected official from each member agency. With the departure of the OCSD from the FCFA, we recommend restructuring the board to consist of either a five-member or three-member board made up of equal representation from each city and a mutually agreed-upon board member. Some examples of a mutually agreed-upon board member could consist of:
 A rotating member of the public;
 The San Luis Obispo County fire chief;
 A representative of the San Luis Obispo County
administrative office; or
 A rotating member of the Board of Supervisors from
Districts 3 and 4.

Recommendation 17. Restructure the FCFA Board to
consist of either a five-member or three-member board.

In addition, the fire chief currently reports to the three-member FCFA Board (which is comprised of elected officials from each member agency). Having the fire chief, who routinely deals with administrative and operational matters, report directly to three elected officials is not an effective reporting structure and it creates operational challenges, the least of which is no direct supervisory oversight and limited communication abilities due to Brown Act restrictions. Instead, Baker Tilly recommends that the fire chief report directly to either one or both city managers.

Recommendation 18. Reorganize the reporting
relationship of the fire chief and have that position
report directly to either one or both city managers.

Analysis of Fire Services
Conclusion Baker Tilly
44 Conclusion
The FCFA has had its share of operational and organizational challenges over the last several years, and while there have been prior assessment reports and studies on its operations, because of limited financing, no significant recommendations from these reports and/or studies have been implemented to date. Now, with the imminent department of the OCSD and the potential loss of $1.1 million in annual revenue contributions, decisive operational decisions by the cities of Arroyo Grande and Grover Beach are in order.

Baker Tilly has completed an assessment of the financial impacts associated with the departure of the OCSD and has put forward realistic staffing and fire service delivery options for consideration by key stakeholders. The assessment concludes that maintaining a regional service delivery approach makes sense for the cities of Arroyo Grande and Grover Beach, and indeed, building on it in time, if possible, would be a net benefit. We also believe that a new dedicated revenue source is necessary to support fire service delivery and that a joint parcel tax may be a good opportunity for the FCFA to pursue. Action on this should be considered no later than the summer of 2024 for possible consideration at the general election in November 2024. Making these efforts will build support for a possible revenue measure in 2024.

Analysis of Fire Services
Attachment A – List of Recommendations Baker Tilly
45 Attachment A – List of Recommendations
Recommendation 1. Add an additional battalion chief to the full-time complement of management personnel and assign each battalion chief to a shift schedule.

Recommendation 2. Acquire a staffing program to manage and track all working and nonworking hours for all FCFA personnel.

Recommendation 3. Improve the ability to track company activity by developing or purchasing a program capable of tracking all unit and personnel activity, including apparatus and equipment.

Recommendation 4. Conduct a Standards of Cover and Community Risk Assessment to determine the appropriate level of service to provide the community.

Recommendation 5. Contract for fire marshal and fire inspection services.

Recommendation 6. Increase the amount budgeted annually for departmental training.

Recommendation 7. Develop a comprehensive training program to address succession planning, and increase the budget for tuition reimbursement, thereby allowing employees to complete the necessary certifications and education required to advance through the ranks.

Recommendation 8. Move the OCSD station housing closer to the apparatus room.

Recommendation 9. Install a sealed door and/or wall to separate the office and living quarters from the apparatus room and turnout storage areas.

Recommendation 10. Assess the living quarters to determine if creating separate quarters for female firefighters is feasible.

Recommendation 11. Allocate appropriate funding to repair and/or upgrade the station alerting systems and the existing phone system.

Recommendation 12. Request proposals from local vendors, as well as the City of Grover Beach, to perform minor repairs and regular maintenance on agency vehicles.

Recommendation 13. Strengthen interagency relationships and collaboration between FCFA personnel and member agencies.

Recommendation 14. Develop an equipment replacement fund for all mission critical equipment and apparatus.

Recommendation 15. Develop a comprehensive policy and procedures manual, building upon efforts currently underway.

Recommendation 16. Assess the viability and potential of a revenue enhancement measure to adequately finance the operational and capital needs of the FCFA.

Recommendation 17. Restructure the FCFA Board to consist of either a five-member or three-member board.

Recommendation 18. Reorganize the reporting relationship of the fire chief and have that position report directly to either one or both city managers.

Item 12.a.

MEMORANDUM
TO: City Council
FROM: Whitney McDonald, City Manager
BY: Sheridan Bohlken, Recreation Services Director
SUBJECT: Discussion of Preschool and Child Care Programs Offered through the Recreation Services Department and the Mark M. Millis Community Center
DATE: April 25, 2023
SUMMARY OF ACTION:

Review and discuss the preschool and child care services offered through the City’s Recreation Services Department, and receive status report of the Mark M. Millis Community Center (MMMCC) Capital Improvement Project.

IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:

Preparation of this report required approximately 15 hours of staff time. Depending on direction provided by Council, discontinuing preschool and child care services would result in loss of revenues of approximately $417,900, while also providing savings in direct expenditures of approximately $501,900 (including one full time recreation supervisor position). Indirect expenses associated with the preschool and child care programs include at least 150 hours per year of administrative time related to recruitment and retention of staff and maintenance expenses related to the MMMCC. The current MMMCC structure has reached the end of its useful life and will need to be replaced in the very near future. It is estimated that a replacement structure will cost at least $6 million.

RECOMMENDATION:

Consider and review the preschool and child care programs offered through the City’s Recreation Services Department and the status of the Mark M. Millis Community Center, and provide direction to staff to phase out its existing child care programs by the fall of 2023.

BACKGROUND:

The preschool and before and after school child care programs are facilitated by the Recreation Services Department and are overseen by the Recreation Supervisor position.

Item 12.a.

City Council
Discussion of Preschool and Child Care Programs Offered through the Recreation Services Department and the Mark M. Millis Community Center April 25, 2023

The Department provides programs that are accessible, inclusive, equitable, and provide diverse populations with affordable child care for children ages 3 through 6th grade. The programs work in unison with CAPSLO (Community Action Partnership of San Luis Obispo) and provide access to monetary assistance for parents and caregivers in need.

With almost 5 decades of child care experience, the Recreation Department has established trust within the community as a high quality, reliable and consistent source of child care.

The Department currently has 20 trained child care staff with ongoing professional development opportunities and requirements, offering notable employment opportunities and experience for a largely low-wage job sector. The Recreation Department is also part of the City’s emergency response team, providing additional staff and resources to assist in the event of an emergency. While other child care agencies and programs were halted during COVID, the Recreation Services Department was one of the first agencies in the area to provide child under care services for first responders and parents/caregivers to return to work, partnering with the Lucia Mar Unified School District (LMUSD) and San Luis Obispo County Office of Education to offer distance learning programs. Through the City’s child care programs, parents and caregivers are also informed about additional City and recreational community events, programs and public notices. Overall, the child care programs continue to help build and sustain an active, healthy and inclusive community.

The Recreation Services Department was moved to what is now the Mark M. Millis Community Center (MMMCC) in the mid-1990’s. The building, a set of unified modular structures that were built in the early 1970’s, was donated to the City by the Lucia Mar Unified School District (LMUSD), when the Lopez Continuation School was moved into a newly built structure on the Mesa. The modular building provides office space for Recreation Services staff (front lobby with reception office, two indoor restrooms, a director’s office, and two additional rooms that serve as office space for one full-time recreation supervisor, one full-time recreation coordinator, and one part-time recreation coordinator), two large rooms that are used for child care, camps and classes (maximum capacity of 70 people), and two smaller rooms including modified bathrooms for young children that connect to an outdoor play area which are used for preschool (maximum capacity of 24). The building also contains two outdoor bathrooms that are available to the public and patrons of Elm Street Park.

ANALYSIS OF ISSUES:

Preschool
The Recreation Services Department has provided preschool services since 1976, which were originally located at Mason Street House, and taught by Ruth Van Nest. The program continues to emphasize individual and group learning, with a focus on socialization, music, art, science and language. The preschool program is taught to 22 students in each session with a teacher to student ratio of 1:11. Part-time preschool teachers are required to have at least 12 units of early childhood education and 3 years

Item 12.a.

City Council
Discussion of Preschool and Child Care Programs Offered through the Recreation Services Department and the Mark M. Millis Community Center April 25, 2023

of applicable and age-related child care or teaching experience and are paid $19.95-

23.10/hour. The City currently employs 5 preschool teachers (two of which also work in the before and after school child care program), who work under 1,000 hours per year and receive 24 hours of sick leave annually as benefits. Preschool teachers and child care staff are all mandated reporters, and the program partners with the Arroyo Grande Police Department and the Five Cities Fire Department to introduce symbols, helpful language, and a connection to and awareness of first responders in the community. The program is exempt from State licensing as programming provides less than 15 hours per week of instruction. However, the preschool program follows all licensing requirements and recommendations, including teacher to student ratios, curriculum, spacing, staff education/experience and background screening, and security. The preschool program has space for 110 children per year, ages 3-5 years old (potty-trained), with flexible scheduling as follows:
• Mondays/Wednesdays/Fridays: 9am-12pm OR 1-4pm; $216 per 4-week session • Tuesdays/Thursdays: 9am-12pm OR 1-4pm; $144 per 4-week session • Tuesdays-Thursdays (summer only): 9am-12pm; $198 for 4-week session (excluding July 4th holiday)
Currently, enrollment is full with 22 students in each morning session (total 44 children), though afternoon sessions do not have current enrollments as this program was most impacted by COVID
Before and After School Child Care
Before and after school child care was initiated by the Recreation Services Department in 1988. This program began as a way to assist working parents to have a safe space for their children during the school year, and also provide child care camp programs during the summer and holiday breaks. The program emphasizes positive development and ageappropriate activities such as arts/crafts, outdoor free play, sports, science, technology, nature and assistance with homework during the school year. Teacher to student ratios are 1:14, with child care teacher (pay rate of $19.95-23.10/hour) and assistant teacher positions (pay rate of $15.53-17.97/hour) on site. Assistant teacher positions require 3 units of early childhood education and 1 year of applicable experience. Currently, the City employs 17 child care staff in the before and after school care program. The before and after school child care program has historically been licensed, follows all protocol required by State Licensing as aforementioned, including random inspections by licensing staff.

Prior to COVID, children attended the program at the MMMCC, in addition to onsite locations at Ocean View and Branch Elementary schools.

On June 14, 2022, Council approved an MOU with LMUSD to offer child care for summer school students through the Bright Futures Extended Learning Opportunity Program (ELOP) grant program at Ocean View Elementary (Attachment 1). This grant funding offered through the school district reimburses child care entities staffing costs to provide

Item 12.a.

City Council
Discussion of Preschool and Child Care Programs Offered through the Recreation Services Department and the Mark M. Millis Community Center April 25, 2023

child care services free of cost to parents and caregivers. On August 9, 2022, Council approved a second MOU with LMUSD to continue the program for the 2022-23 school year at Ocean View Elementary. In approving the second MOU, Council acknowledged staffing challenges and constraints and approved coordinated efforts for the YMCA to assume child care services offered through the ELOP grant program at Branch Elementary School beginning in the 2022-23 school year and also at Ocean View Elementary school beginning in the 2023-24 school year (Attachment 2).

The program currently has space to accommodate 40 children per week, and due to the demand and need for child care, there are 14 students on the waitlist at Ocean View Elementary school.

It is approximated that 80-85% of families who utilize City child care programs have two working parents or are single parents who need these child care services in order to work.

In coordination with CAPSLO and First 5 (child advocacy agency), as of April 2023, the City of Arroyo Grande has 31 licensed child care agencies with a capacity of 656 child care slots. Agencies are reporting that there are 91 vacancies between all facilities, ranging from small family child care homes to large family child care homes, and including licensed child care centers (not all agencies report out data to CAPSLO and First 5 on a regular basis, therefore there may be variance to this data). Non-licensed facilities are not captured in this data, nor are the agencies broken down by services provided to preschool children or children in primary school for direct comparison to the City’s programs. The Recreation Department currently has child care camps (6 week-long sessions) scheduled for the summer months, with enrollment near capacity for all sessions (average of 43 children registered each week with 45 spaces available). Two 3-week preschool sessions are also scheduled for the summer break, and while registration has just opened, 13 participants have registered with 9 spaces remaining.

Revenue Impacts
Tables 1 and 2 below provide historic revenue and expenditure data for the City’s preschool and before and after school care programs. The Children In Motion program referenced below includes the before and after school care program as well as summer camp programs. The expenses identified below do not include administrative or maintenance expenses associated with the child care programs.

Item 12.a.

City Council
Discussion of Preschool and Child Care Programs Offered through the Recreation Services Department and the Mark M. Millis Community Center April 25, 2023

Table 1
Table 2
Mark M. Millis Community Center
Due to its age and need of repairs, the MMMCC is currently associated with a Capital Improvement Project to evaluate the potential design and cost of a replacement community center due to its continued deterioration. The City has obtained a survey of the site from a licensed surveyor and will complete a conceptual design with the assistance of a local architect in the upcoming fiscal year. Additionally, potential partnership opportunities will be explored with local non-profit service providers, such as the Boys and Girls Club, to determine whether the MMMCC may be replaced with a structure that could serve multiple community needs while also minimizing costs to the City. Staff will provide updates to Council regarding these steps through the upcoming Capital Improvement Planning process, as well as regular quarterly reports in the upcoming fiscal year.

Item 12.a.

City Council
Discussion of Preschool and Child Care Programs Offered through the Recreation Services Department and the Mark M. Millis Community Center April 25, 2023

When the MMMCC is removed and replaced, any current uses of the building will need to be either halted or relocated to other City facilities. The City does not currently have another building capable of supporting the current child care programs offered by the Recreation Services Department.

ALTERNATIVES:

The following alternatives are provided for the Council’s consideration:

1. Review and discuss child care programs offered by the Recreation Services Department and direct staff to phase out its existing child care programs by the fall of 2023;

2. Review and discuss child care programs offered by the Recreation Services Department and direct staff to identify other child care agencies and/or programs to contract with the City to provide current child care programs; or

3. Review and discuss child care programs offered by the Recreation Services Department and direct staff conduct a statistically valid survey/needs assessment for child care and the MMMCC;

4. Provide other direction to staff.

ADVANTAGES:

Discussion of the City’s current child care programs supports one of the City Council’s identified goals and priorities for Fiscal Year 2022-23: “Focus resources and implement efficiencies to ensure optimized service levels within core City functions.” If direction is provided to phase out the current child care programs, significant administrative time and expenses will be freed up and made available to other City priorities, such as the recruitment and retention of public safety staff.

DISADVANTAGES:

Ending the current child care programs offered by the City will reduce the total number of child care slots available to the community. However, while this will not assist preschool aged children, other child care agencies such as the YMCA will provide free before and after school care, as well as summer programs, to school aged children in Arroyo Grande through the ELOP administered by the Lucia Mar Unified School District.

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.

Item 12.a.

City Council
Discussion of Preschool and Child Care Programs Offered through the Recreation Services Department and the Mark M. Millis Community Center April 25, 2023

Attachments:

1. June 14, 2022 City Council Staff Report - Consideration of Approval of a Memorandum of Understanding with Lucia Mar Unified School District to Provide Free Child Care through the Bright Futures Extended Learning Opportunities Program

2. August 9, 2022 City Council Staff Report - Consideration of Approval of a Memorandum of Understanding with Lucia Mar Unified School District to Provide Free Child Care through the Bright Futures Extended Learning Opportunities Program for the 2022-23 School Year

3. May 10, 2022 City Council Staff Report – Consideration of Approval of a Child Care Assistance Grant Program

4. Public Comment

ATTACHMENT 1-3
Attachment 1 is available as a link: - Consideration of Approval of a Memorandum of Understanding with Lucia Mar
Attachment 2 is available as a link: - Consideration of Approval of a MOU with Lucia Mar to Provide Free Child Care
Attachment 3 is available as a link: - Consideration of Approval of Child Care Assistance Grant Program

MEMORANDUM
TO: CITY COUNCIL
FROM: Jessica Matson, Legislative & Information Services Director/City Clerk SUBJECT: Supplemental Information
Agenda Item 12.a – Discussion of Preschool and Childcare Programs Offered Through the Recreation Services Department and the Mark M.

Millis Community Center
DATE: April 24, 2023
Attached is correspondence received for the above referenced item. cc: City Manager
Assistant City Manager/Public Works Director
Recreation Services Director
City Attorney
City Clerk
City Website (or public review binder)

From: Stacy Hall >
Sent: Saturday, April 22, 2023 9:58 AM
To: Kristen Barneich <[email protected]>
Subject: Parks and Rec Preschool
Dear Arroyo Grande City Council Members,
I am writing to you, asking for your consideration to keep the Arroyo Grande Parks and Rec preschool program open and available for AG kids and families.

I am an AG resident and my own children attended this valuable preschool program. It made such a huge difference in preparing them for kindergarten and elementary school and beyond.

As a teacher since 2000, I have seen the value of preschool first hand.

This is an essential program that allows our children to grow, learn and prepare for kindergarten. It is a very well run and affordable program and without it many families would be at a huge loss.

Losing this program will cost us jobs and will make preschool a financial hardship for many of our families. Please continue to keep this valuable program up and running.

Thank you for your consideration. Please read this letter aloud at your next board meeting.

Sincerely,
Stacy Hall
Sent from my iPhone

From: Caitlin Radtke
To: AG City
Subject: Parks and rec preschool
Date: Sunday, April 23, 2023 9:00:16 AM
To whom it may concern,
I am writing to you after hearing about the potential closure of elm street parks preschool program. My daughter attended that program for almost 2 years and grew exponentially during that time. It is a wonderful program and I look forward to signing my son up once he is old enough. Not only is it a great program, with a big emphasis on play learning, IT IS AFFORDABLE!! The most affordable preschool I was able to find in the area. Please do your community a favor and keep this program in place.

Best,
Caitlin Radtke-Hoffman
Sent from my iPhone

From: Mike Blanchard >
Sent: Sunday, April 23, 2023 3:09 PM
To: Kristen Barneich <[email protected]>
Subject: AG Pre-School Program
Mayor Pro Tem Barneich,
Please do not vote to close the Arroyo Grande Parks and Rec pre-school program.

We need to be doing MORE to support children and their families in this community, not less.

There is no basis for this decision.

We implore you to reconsider.

Respectfully,
Mike and Melissa Blanchard

From: niccola nelson
To: public comment
Subject: Preschool closure
Date: Sunday, April 23, 2023 5:29:05 PM
My daughter Ainsley has been attending Arroyo Grande’s preschool and all the events that have taken place at Elm St., Park for the last few years, and she has learned so much from the teachers, students and our community. The teachers have taught her to be empathetic, which I appreciate more than words can express. I teach Chair Yoga to the elderly for the city and many of their children and grandchildren have attended the preschool and for many families, it’s a right of passage or a tradition. I urge you not to close the preschool and find other ways of funding for this valuable gem in our community.

Sincerely Niccola Nelson and Nelson, aged 5 and a current attendee at the school

From: Sarah Estrada >
Sent: Sunday, April 23, 2023 4:09 PM
To: Kristen Barneich <[email protected]>
Subject: Parks and recreation preschool
Hello,
I am aware that the city council will be voting to continue the preschool program through parks and recreation. I believe the program is valuable and needed in our community. I am asking that you vote to maintain the program for our area children. The parks and rec preschool is an affordable option for families in the Five Cities. My son attended the program previously and was well prepared for kindergarten. I urge you to find the program.

Thank you for your time,
Sarah Estrada

From: Stacy Millard >
Sent: Sunday, April 23, 2023 5:17 PM
To: Kristen Barneich <[email protected]>
Subject: Preschool
Hello Ms. Barneich,
I would like to address the potential closing of the AG Parks & Rec. (Play and Learn) Preschool. The is our second year attending the preschool & we are so sad to hear the idea of it closing. As a twin mom, finding affordable childcare is next to impossible. Play and Learn has allowed our twins to take part in a school atmosphere, meet new friends & gain much-needed preparation for Kindergarten. As you are probably aware, sending two kids to preschool costs nearly a mortgage these days. We almost gave up hope for preschool until Play and Learn crossed our paths.

We are so thankful for our time there & can only hope Play and Learn stays in our community for many years to come. If not for it’s amazing staff, but to also help families like ours who would not be able to offer preschool to their kids, otherwise.

Thank you for considering these thoughts.

Best,
Stacy & Evan Millard

From: Adam Troia
To: public comment
Subject: Agenda item 12A comment
Date: Monday, April 24, 2023 3:26:45 PM
Hello Arroyo Grande City Counsel,
As a member of the community whose child has aged out in your program I can attest to the critical need for affordable childcare and I am unsure what my family would have done without this service. Not only did the program care for our son, it also provided additional socialization which was a huge benefit to our son.

Additionally, as you are all aware, the cost of living in our beautiful area generally requires two full time incomes and I fear that by eliminating this program you will be removing a vital lifeline that working families in our community need so that parents are able to work and be assure that their children are cared for while they are working to put food on the table and a roof over their heads.

It is understandable that tough decisions must be made to bring budgets into balance and that in general cutting any program will have negative impact on some in the community, but I hope you reconsider cutting this program which helps those in our community who are least equipped to bear the burden of program cuts.

Respectfully,
Adam Troia
Arroyo Grande

From: Erin Alves
To: Carrie Vanbeveren; Sheridan Bohlken; AG City; AG Recreation Department; Caren Ray Russom; Jim Guthrie; Kristen Barneich; Kate Secrest; Lan George
Subject: Re: Child care in Arroyo Grande
Date: Monday, April 24, 2023 2:50:30 PM
Hello AG City Council members and staff,
I am writing you all to ask you to please reconsider closing down our beloved preschool program.

When I first heard this news I thought… Oh no, closing down our affordable and trusted community preschool will be a detrimental loss. It is such a awesome and enriching program and will not only cost jobs but greatly impact options for an affordable preschool! It’s made such a positive impact on the community and is very well run! The staff is top notch and so caring. So many kids have benefited from the preschool program - it will be a huge heartbreak to the 5 Cities community if it is shutdown.

AG Parks and Rec have helped my family with their affordable and trusting preschool summer programs and art/sports/science for kids. Please don’t cut this much needed program out of our community.

Thank you,
Erin Alves
, Arroyo Grande, CA 93420
&
Mom of , 10 years old kiddo

From: Jessica McNally
To: public comment
Subject: Keep AG parks and recreation preschool open!!
Date: Monday, April 24, 2023 4:04:27 PM
To whom it may concern,
After hearing that, there is a potential to shut down the Arroyo Grande parks and recreational Preschool, I have to stand up and say, “this shouldn’t happen.” This is one of the best and most affordable places to send preschoolers. I have enrolled 3 of my children at this preschool and I think this is such a wonderful opportunity to help our preschool population grow and learn in this community.

Another reason to support this amazing program is this program offers a great robust program with little cost to the parents. So for parents who are struggling to make it here in this super expensive town, there’s an opportunity to support families who have a need and want to start educating their children early. This not only helps our community and provides jobs, it provides an opportunity for kids to learn. It doesn’t stop there, it also carries over into the elementary schools. Children who receive early education do better in school and have better social emotional skills.

I don’t think the answer is to remove this program from our town, but to support this program and families who utilize this opportunity to educate their kids. You’re doing a disservice to the community by shutting down a program like this. People will lose their jobs, and families will no longer have this affordable option.

This town shouldn’t just cater to retired folks that have lots of money, but it takes middle class families a lot of money to live here.

Sincerely,
Jessica McNally

From: Jackie Wienold
To: public comment
Subject: AG REC PRESCHOOL PROGRAM
Date: Monday, April 24, 2023 3:23:35 PM
Dear Arroyo Grande City Council Members,
Firstly, thank you for your service to the community and for reading my message.

I have come to learn only in the last two days that the preschool program is being brought to an end this fall by the city. Hearing this through social media outlets and families not being notified by the program or the city about a potential closure well before a vote on this subject unacceptable. I would like to point out that this proposal is coming at a time when “TK for all” is not yet available in the Lucia Mar school district. My daughter, misses the TK eligibility cutoff (turning 5 by April 2, 2024) by a mere week, would be continuing preschool next school year at this program where she currently is enrolled, before entering kindergarten.

Many local families are in the same situation and there are waiting lists at all preschool programs in our area. Many local families struggle to find an affordable option for their preschooler. This program provides a financially accessible option with an exemplary and wonderful staff.

As a lifelong Arroyo Grande resident and graduate of the very same preschool program once located on Mason St, I can say this program has always been needed and will continue to be needed for many years. Please consider finding a solution and keeping this program available to families is our community.

DO BETTER! DON’T CUT OUR RECREATION DEPARTMENTS INCREDIBLE PROGRAMS!
-Jackie Ralph.

Item 12.b.

MEMORANDUM
TO: City Council
FROM: Whitney McDonald, City Manager
BY: Isaac Rosen, City Attorney
Sarah Lansburgh, Deputy City Clerk
SUBJECT: Consideration of Annual Report, Adoption of Resolution of Intention to Levy Annual Assessments for the AGTBID; Consideration of Alternatives for Future of AGTBID
SUMMARY: Consideration of alternatives for future of AGTBID to include potential disestablishment in accordance with State Law
DATE: April 25, 2023
SUMMARY OF ACTION:

Receive and approve the Annual Report, which provides information on the activities of the Arroyo Grande Tourism Business Improvement District (AGTBID) during the past year and adopt a Resolution that would continue the levy of annual assessments for AGTBID for another year. As part of the review of the Annual Report and consideration of the Resolution, alternatives have been presented regarding the future of the AGTBID, including but not limited to disestablishing the AGTBID.

IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:

Based on the anticipated year-end results for 2022-23, the assessments expected to be collected total approximately $270,000 for Fiscal Year 2022-23. The AGTBID budget provides $5,000 to the City to cover a portion of the City’s cost associated with supporting a Community Services Specialist position for vacation rental code compliance. The AGTBID budget also provides $3,000 to the City for administrative support and $42,000 to the South County Chambers of Commerce (Chamber) to administer the AGTBID.

RECOMMENDATION:
1) Receive and approve the Annual Report; 2) Adopt a Resolution of Intention to levy and collect assessments within the Arroyo Grande Tourism Business Improvement District (AGTBID) area for Fiscal Year 2023-24, or provide direction to staff regarding AGTBID alternatives, including but not limited to the possibility of the disestablishment of the AGTBID and winding up of its affairs in accordance with applicable State law; 3) If the

Item 12.b.

City Council
Consideration of Annual Report, Adoption of Resolution of Intention to Levy Annual Assessments for the AGTBID; Consideration of Alternatives for Future of AGTBID April 25, 2023

Resolution of Intention to levy and collect assessments within the AGTBID area for Fiscal Year 2023-24 is adopted, set the date for a public hearing for May 23, 2023, in accordance with Streets and Highways Code Section 36534; and 4) Determine that approving the annual report and adopting a resolution of intention to levy and collect assessments, or alternatively providing other direction to City staff on the future of AGTBID, is not subject to the California Environmental Quality Act (“CEQA”) because it has no potential to result in either a direct, or reasonably foreseeable indirect, physical change in the environment. (State CEQA Guidelines, §§ 15060, subd. (b)(2)-(3), 15378.).

BACKGROUND:

In May 2013, the City Council adopted an Ordinance establishing the AGTBID. The AGTBID was formed under the Parking and Business Improvement Law of 1989, Sections 36500 et. seq. of the Streets and Highways Code and incorporated into the Arroyo Grande Municipal Code (AGMC) in Title 3, Chapter 3.46.

The purpose of forming the AGTBID was to provide revenue to defray the cost of services, activities, and programs promoting lodging businesses in the AGTBID through the promotion of scenic, recreational, cultural, and other attractions in the AGTBID as a tourist destination. An assessment is levied on all lodging businesses within the AGTBID boundaries and is based upon two percent of the rent charged by the operator per occupied room per night for all transient occupancies.

In December 2014, the City Council adopted an Ordinance amending Chapter 3.46 of the Arroyo Grande Municipal Code to provide that the same exemptions that apply to the Transient Occupancy Tax apply to AGTBID assessments and amended the definition of "lodging" to include vacation rentals and homestays.

In accordance with the provisions in the Streets and Highways Code and AGMC Section

3.46.100, the City Council appointed an Advisory Board. Pursuant to Streets and Highways Code Section 36533, the Advisory Board is to prepare an annual report, which is to be submitted to the City Council for its review and approval. AGMC Section 3.46.060 also provides that the assessments for the AGTBID are to be reviewed annually by the City Council based upon the Annual Report of the Advisory Board, and after approval of the Annual Report, the City Council is to follow the hearing process outlined in Streets and Highways Code Section 36534 for the annual assessment for the upcoming fiscal year. Section 36534 provides for the adoption of a Resolution to levy an annual assessment for that fiscal year. The Resolution also sets a public hearing date in order to receive any written or oral protests against the continuation of the AGTBID as required by the applicable statute.

Item 12.b.

City Council
Consideration of Annual Report, Adoption of Resolution of Intention to Levy Annual Assessments for the AGTBID; Consideration of Alternatives for Future of AGTBID April 25, 2023

The AGTBID has been in effect for almost nine (9) years. In January 2018, the City Council combined the Tourism Marketing Committee, which was coordinated by the Chamber of Commerce, and the Advisory Board, increasing the number of members of the Advisory Board from a minimum of three (3) to not more than nine (9). The Advisory Board implements the programs and activities funded through the AGTBID. The South County Chambers of Commerce administers the AGTBID program; therefore, minimal staff time has been required by the City.

In June 2018, the Council approved an Agreement with Verdin Marketing for tourism marketing services. Since that time, a tourism website, rebranding of Visit Arroyo Grande, a monthly e-newsletter, advertising campaigns, a tourism strategic plan, and other marketing efforts have been developed and implemented. The term of the initial contract with Verdin Marketing expired on June 30, 2022. The City, on behalf of the AGTBID, issued a Request for Proposals (RFP) for marketing, communications, website management, and social media services for Visit Arroyo Grande.

On June 14, 2022, the City Council reviewed the proposals from Madison Strategies & Kassandra Maher Marketing and Verdin Marketing. Ultimately, the City Council selected Verdin Marketing for AGTBID tourism marketing services and authorized City Manager Whitney McDonald to enter into an Agreement for Consultant Services in an amount not to exceed the approved budget amount in a form approved by the City Attorney. The Agreement commenced on July 1, 2022 and continues in effect until June 30, 2023, with the City having the sole option to extend the Agreement for one (1) year. On February 14, 2023, the City Council approved a one-year extension to the Agreement for Contractor Services between Verdin Marketing and the City of Arroyo Grande.

On February 28, 2023, Council directed staff to include in a future agenda item an analysis of the options available and procedures required were the City to consider disestablishing the AGTBID. As a result, this information has been included in this report and presented for discussion and direction of the City Council.

ANALYSIS OF ISSUES:

On April 3, 2023, the Advisory Board reviewed and approved the Annual Report and has forwarded it to the City Council for consideration. As noted above, following approval of the Annual Report and adoption of the Resolution, the next step in the process for collecting assessments over the next year is to schedule a public hearing, which is recommended to occur at the City’s May 23, 2023 City Council meeting. The public hearing will allow lodging businesses subject to the assessment to submit comments, voice concerns, and protest the assessment. As set forth in Sections 36524 and 36525 of the California Streets and Highways Code, the City Council has the ability to continue to levy and collect the proposed citywide AGTBID assessment at the May 23, 2023 public hearing, unless written protests are received from lodging businesses that pay 50% or

Item 12.b.

City Council
Consideration of Annual Report, Adoption of Resolution of Intention to Levy Annual Assessments for the AGTBID; Consideration of Alternatives for Future of AGTBID April 25, 2023

more of the proposed assessments. In that event, the Council cannot consider continuation of the AGTBID assessments for at least one year.

The current AGTBID budget for Fiscal Year 2022-23 is provided in Attachment 3. Current projections for the AGTBID revenue and expenditures are provided in Table 1 below.

Table 1
Options for Modifying or Disestablishing AGTBID
In addition to the option of continuing the AGTBID by levying assessments following a public hearing as proposed above, the City Council can consider a range of changes to the structure of the AGTBID. Such changes may include filling the administrative role that is handled by a third party contractor (i.e. Chamber) with in-house City staff; changing the makeup of the AGTBID Advisory Board; or disestablishing the AGTBID altogether and winding up its affairs.

In terms of the makeup of the AGTBID Advisory Board, State law is clear that the City Council “may designate existing advisory boards or commissions to serve as the advisory board for the area or may create a new advisory board for that purpose.” (Streets and Highways Code § 36530.) This means the Council can either appoint one of its other existing boards or commissions to also serve as the AGTBID Board or can remove specified Board members and replace them with one-off appointees, subject to Brown Act considerations.

Fund Center - Tourism Business Improvement District (TBID) FY 2022-23
Year-to-Date (YTD) Estimated Actuals through March
(March - 75% of Year)
Revenue
TBID Assessments 244,000 191,682 78.6% (52,318)
Other Revenue 750 - 0.0% (750)
Total Revenue 244,750 191,682 78.3% (53,068)
Expenditures:

Advertising 200,000 149,919 75.0% 50,081
Contractual Services 47,500 36,000 75.8% 11,500
Website Re-design 25,000 5,000 20.0% 20,000
STR Code Compliance 5,000 3,336 66.7% 1,664
Memberships & Subscriptions 500 - 0.0% 500
Public Relations 15,000 - 0.0% 15,000
Total Expenditures 293,000 194,255 66.3% 98,745
Change in Fund Balance (48,250) (2,573) 45,677
Beginning Fund Balance 405,833
Ending Fund Balance 403,260
% of
Budget
Central Coast Tourism Council
Assessments for July - February
Verdin charges Jul-January
July - Mar Chamber payments & City Admin
Co-op
YTD
March
Budget FY
2022-23
Fav/(Unfav)
Variance Comments

Item 12.b.

City Council
Consideration of Annual Report, Adoption of Resolution of Intention to Levy Annual Assessments for the AGTBID; Consideration of Alternatives for Future of AGTBID April 25, 2023

The AGTBID Bylaws currently contain the following provisions governing the Advisory Board’s membership:

Section 2: Membership
Board members shall be appointed by the City Council. The total membership of the Board shall consist of a minimum of three (3) but not more than nine (9) members, 2/3rds of which shall be owners of lodging businesses within the AGTBID or others with knowledge of tourism and/or the lodging industry.

Membership on the Board shall be exempt from City residency requirements otherwise applicable to other City Advisory Boards. Criteria and selection for membership shall not discriminate based upon sex, race, religion, creed, color, age, national or ethnic origin, or any other classification protected by law.

The City Council Handbook further describes the process used to select and appoint members of the Advisory Board, and the City’s other advisory bodies, as follows:

5.2 Appointment
Pursuant to Council Resolution, the City Council appoints representatives to the following City boards, commissions and committees:
 Planning Commission
 Downtown Parking Advisory Board
 Architectural Review Committee
 Tourism Business Improvement District (TBID) Board
 Community Service Grant Program (CSGP) Committee
With exception to the TBID Board, where members are appointed by the full Council, the Mayor and each Council Member shall appoint one representative to each respective Commission/Board/Committee. All appointments are subject to approval by a majority of the Council.

Members of each respective Commission/Board/Committee shall serve for a term ending the January 31st following the expiration of the term of the respective appointing Mayor or Council Member, as applicable. The exception to this process is the TBID Board, which consists of a minimum of three (3) and a maximum of nine (9) members appointed by the City Council. Vacancies on the TBID Board are administered by the South County Chambers of Commerce (Chamber), in coordination with City staff, and applicants are recommended to the Council for appointment by the

Item 12.b.

City Council
Consideration of Annual Report, Adoption of Resolution of Intention to Levy Annual Assessments for the AGTBID; Consideration of Alternatives for Future of AGTBID April 25, 2023

Chamber. Members of each respective Commission/Committee/Board may be removed prior to expiration of their term by a majority vote of the Council.

Applicants, with the exception of the Downtown Parking Advisory Board, and TBID Board must be registered voters of Arroyo Grande. Applicants for the Downtown Parking Advisory Board shall have a business within the Arroyo Grande City Parking and Business Improvement Area. Two-thirds of appointees to the TBID Board shall be owners of lodging businesses within the Arroyo Grande Tourism Business Improvement District or others with knowledge of tourism and/or the lodging industry.

Currently, the Advisory Board has three members. Over the past several months, the Chamber has encountered difficulties filling the remaining vacancies with members who meet the requirements and intent of the bylaws. Council may wish to consider modifying the Advisory Board membership and appointment process to help ensure that vacancies are filled. One option is for the Advisory Board appointment process to mirror that used for the City’s other advisory bodies whereby each Council Member would appoint a member of the AGTBID Advisory Board. The AGTBID Bylaws and Council Handbook could specify that at least three of the appointed members of the Board must be owners of lodging businesses within the AGTBID or have direct experience within the tourism and/or lodging industry. This approach is similar to the City’s Architectural Review Committee, which, by Council Resolution, is required to include at least three individuals who are qualified architects or design professionals.

Alternatively, the City Council can consider disestablishing the AGTBID; this is a formal legal process outlined by State law. Pursuant to Streets and Highways Code section 36550(a), Council may disestablish the TBID area by adopting a resolution of intention, holding a public hearing, adopting an ordinance confirming the disestablishment, and making certain refunds as required by state law. The procedural outline for this process is as follows:

1. Staff prepares, for City Council’s consideration, a Resolution of Intention to disestablish the AGTBID area. The Resolution must state the reason for the disestablishment, the time and place of a public hearing for a required subsequent ordinance disestablishing the AGTBID, and a proposal regarding how the AGTBID plans to dispose of any assets acquired with the revenues of the assessments levied within the AGTBID. Legal counsel can work with City staff to prepare this material should Council wish to proceed in this manner.

2. Then, the City Council agendizes adoption of the Resolution of Intention (adoption of the Resolution does not require a public hearing). Again, adoption of the Resolution must include a date for a public hearing on the ordinance, which date must be set in the window of 20-30 days after the adoption of the Resolution of Intention.

Item 12.b.

City Council
Consideration of Annual Report, Adoption of Resolution of Intention to Levy Annual Assessments for the AGTBID; Consideration of Alternatives for Future of AGTBID April 25, 2023

3. After adoption, the Resolution of Intention must be published in a newspaper of general circulation in the City one time, at least 7 days before the public hearing date on the ordinance. A complete copy of the Resolution must also be mailed (by first-class mail) to each business owner within the AGTBID area, within 7 days of the Council’s adoption of the Resolution.

4. The City Council then holds a public hearing to consider the ordinance to disestablish the AGTBID, on the date provided in the Resolution of Intention. There is no “majority protest” proceeding at the hearing, unlike when a protest by 50% or more of those paying the assessment can delay or block the establishment of a TBID or the continued levy of assessments against them. This means that the AGTBID can be disestablished even if business owners protested the action.

5. If the ordinance is adopted and the AGTBID disestablished, notice of this disestablishment must be published once in a newspaper of general circulation not later than 15 days from adoption of the ordinance.

6. If the Council provides direction to disestablish the AGTBID, there is also an associated “windup” process. This entails making a refund, to all business owners against which TBID assessments were levied, of “any remaining revenues” derived from past assessments or the sale of assets acquired with those assessment funds. Money derived from AGTBID assessments can be spent on lawful purposes, up to the point of formal disestablishment. (Streets & Highways Code §§ 36506, 36551.)
ALTERNATIVES:

The following alternatives are provided for the Council’s consideration:

1. Approve staff recommendations, or provide direction to staff regarding the future of AGTBID more generally;

2. Request changes or clarification to the Annual Report and/or Resolution of Intention;

3. Do not approve staff recommendations; or

4. Provide other direction to staff.

ADVANTAGES:

The recommendations will enable the City to extend the AGTBID, which provides a mechanism to generate funding to promote lodging stays and tourism in the City, in turn increasing transient occupancy tax revenue and supporting local businesses. If Council directs staff to undertake the steps necessary to disestablish the AGTBID, the City Council will have determined that the TBID has fulfilled its original purpose and is no longer of benefit to local businesses or the City.

DISADVANTAGES:

No disadvantages with approving the Annual Report and adopting the Resolution levying the assessment for another year are identified. Disadvantages associated with opting to

Item 12.b.

City Council
Consideration of Annual Report, Adoption of Resolution of Intention to Levy Annual Assessments for the AGTBID; Consideration of Alternatives for Future of AGTBID April 25, 2023

disestablish the AGTBID are speculative beyond no longer collecting the assessment, but could include a reduction in tourism in response to decreased spending on attracting new or returning visitors using AGTBID resources.

ENVIRONMENTAL REVIEW:

Approving the annual report and adopting a resolution of intention to levy and collect assessments, or alternatively providing other direction to City staff on the future of AGTBID, is not subject to the California Environmental Quality Act (“CEQA”) because it has no potential to result in either a direct, or reasonably foreseeable indirect, physical change in the environment (State CEQA Guidelines, §§ 15060, subd. (b)(2)-(3), 15378).

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. Proposed Resolution

2. Annual Report

3. AGTBID FY 2022-23 Budget

ATTACHMENT 1
RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

ARROYO GRANDE DECLARING ITS INTENTION TO

CONTINUE THE ARROYO GRANDE TOURISM BUSINESS

IMPROVEMENT DISTRICT, TO CONTINUE THE BASIS

FOR AND TO LEVY THE ASSESSMENTS FOR THE

DISTRICT, AND TO SET A DATE FOR THE PUBLIC

HEARING ON THE DISTRICT AND THE ASSESSMENT
FOR THE 2023-24 FISCAL YEAR
WHEREAS, the Parking and Business Improvement Area Law of 1989 (“PBIAL”), sections 36500 et seq. of the Streets and Highway Code, authorizes cities to establish business improvement districts for several purposes, one of which is promotion of tourism; and
WHEREAS, the Arroyo Grande Tourism Business Improvement District was established in May 2013 and incorporated into the Arroyo Grande Municipal Code (“AGMC”) under Chapter 3.46; and
WHEREAS, in accordance with the requirements of Streets and Highways Code Section 36530 and AGMC Section 3.46.100, the City Council appointed an Advisory Board to provide oversight, guidance, and recommendations regarding the use of the assessment funds; and
WHEREAS, the AGMC and the PBIAL require the Advisory Board to prepare and submit an annual report (“Annual Report”) stating proposed changes, improvements and activities for the fiscal year; and
WHEREAS, on April 3, 2023, the Advisory Board approved the Annual Report; and WHEREAS, the Advisory Board Annual Report was filed and approved by the Arroyo Grande City Council on April 25, 2023.

NOW, THEREFORE BE IT RESOLVED by the City Council of the City of Arroyo Grande as follows:

1. All recitals set forth above, are true, correct and incorporated herein.

2. The City Council hereby declares its intention to continue the Arroyo Grande Tourism Business Improvement District (“District”) in accordance with AGMC Chapter 3.46 and Streets and Highways Code Sections 36500 et seq. and to levy assessments for fiscal year 2023-24.

RESOLUTION NO.

PAGE 2

3. The Annual Report is on file with the City Clerk and contains a full and detailed description of the improvements and activities to be provided for fiscal year 2023-

24. No changes to the District boundaries are proposed, and the report includes the estimated cost of providing improvements and activities for fiscal year 2023-

24. The assessment is not proposed to be increased.

4. The boundaries of the District are the boundaries of the City of Arroyo Grande.

5. The assessment levied by the District shall be used for activities and programs promoting lodging businesses in the District through the promotion of scenic, recreational, cultural, and other attractions in the District as a tourist destination, and as further set forth in ACMG Section 3.46.030.

6. The assessment is proposed to be levied on all “lodging” businesses in the District, as that term is defined in AGMC section 3.46.020, and allocated by the City of Arroyo Grande.

7. The assessment shall be based upon two percent (2%) of the rent charged by the operator per occupied room per night for all transient occupancies and shall be collected quarterly.

8. New lodging businesses shall not be exempt from immediate assessment.

9. A public hearing, held pursuant to AGMC Chapter 3.46 and Streets and Highways Code Section 36535, to allow for comments and to receive written and oral protests on the District and proposed assessment, is hereby set for 6:00 p.m., Tuesday May 23, 2023, before the City Council of the City of Arroyo Grande at the City Council Chambers at 215 E. Branch St., Arroyo Grande, CA or via teleconference as follows: Zoom Meeting: https://us02web.zoom.us/j/83255848846; Webinar ID:
832 5584 8846; Or by Telephone: 1-669-900-6833; 1-346-248-7799.

10.At the public hearing, the testimony of all interested persons for or against the continuation of the District, the boundaries of the District, or the furnishing of specified types of improvements or activities will be heard. A protest may be made orally or in writing by any interested person. However, only written protests will be considered in determining if there is a majority protest. The form and manner of protests shall comply with Streets and Highways Code Sections 36524 and 36525.

11.Any protest pertaining to the regularity or sufficiency of the proceedings shall be in writing and clearly state the irregularity of defect to which objection is made.

Written protests must be received by the City Clerk of the City of Arroyo Grande before the close of the public hearing scheduled herein and may delivered or mailed to the City Clerk, City of Arroyo Grande, 300 East Branch Street, Arroyo Grande, CA 93420. A written protest may be withdrawn in writing at any time before

RESOLUTION NO.

PAGE 3
the conclusion of the public hearing. Each written protest shall contain a written description of the business in which the person signing the protest is interested sufficient to identify the business. If the person signing the protest is not shown on the official records of the City of Arroyo Grande as the owner of a business, then the protest shall contain or be accompanied by written evidence that the person is the owner of the business.

12.If at the conclusion of the public hearing, there are of record written protests by the owners of lodging businesses within the District that will pay fifty percent (50%) or more of the total assessments of the entire District, no further proceedings to continue the District shall occur. New proceedings to continue the District shall not be undertaken again for a period of at least one (1) year from the date of the finding of a majority protest by the City Council. If the majority of written protests are only as to an improvement or activity proposed, then that type of improvement or activity shall not be included in the District.

13.The City Clerk is instructed to provide notice as required by AGMC Chapter 3.46 and Streets and Highways Code Section 36534. The City Clerk shall give notice of the public hearing by causing this Resolution of Intention to be published once in a newspaper of general circulation in the City no less than seven (7) days before the public hearing.

On motion of Council Member , seconded by Council Member , and on the following roll call vote, to wit:

AYES:

NOES:

ABSENT:
the foregoing Resolution was passed and adopted this 25 th day of April, 2023.

RESOLUTION NO.

PAGE 4

CAREN RAY RUSSOM, MAYOR
ATTEST:

JESSICA MATSON, CITY CLERK
APPROVED AS TO CONTENT:

WHITNEY McDONALD, CITY MANAGER
APPROVED AS TO FORM:

ISAAC ROSEN, CITY ATTORNEY

Annual Report | 2022–2023
1 ATTACHMENT 2

Overview and Goals 3
Strategic Plan 4
Completed Initiatives 5
Target Audiences 6
Geographic Markets 7
Why Tourism Matters 8
Destination Campaigns 9
Results at a Glance 10
Email Marketing 11
Social Media 12
Paid Media 13
Public Relations & Partnerships 14
Table of Contents
2

Overview & Goals
The Arroyo Grande Tourism Business Improvement District (Arroyo Grande TBID) has a plan in motion to reach travelers whose interests and behaviors align with the genuine experiences found in our area. These travelers are ready to discover the magic of Arroyo Grande—a town differentiated by its charming atmosphere, striking scenery, and access to some of the Central Coast’s most sought-after experiences.

The Arroyo Grande TBID Advisory Board is made up of
representatives from lodging or hospitality related
businesses in Arroyo Grande appointed by the City Council.

The TBID helps to promote Arroyo Grande as a travel
destination and is funded by a 2% assessment charged by hotels for this purpose.

Position Arroyo Grande as
a travel destination
Increase overnight stays in
Arroyo Grande
Introduce new visitors to
Arroyo Grande
Marketing Goals:
3

In August 2020, the Arroyo Grande TBID finalized their three-year strategic plan defining key imperatives, objectives to measure and initiatives to execute. This plan will guide all future marketing efforts and direct the organization.

Vision Mission Position
A thriving community
rooted in authentic
hospitality and nourished
by a strong economy
To market Arroyo Grande as a
desirable travel destination,
create memorable
experiences and support a
prosperous economy and
community
Visit Arroyo Grande is the city’s primary source for destination marketing services and tourism leadership. We are:
• Storytellers of the Arroyo Grande tourism experience
• Providers of tourism related information and data
• Collaborators championing the value of tourism and supporting key tourism drivers
• Stewards balancing the benefits of tourism with Arroyo Grande’s quality of life
Values Reputation
• Truth
• Excellence
• Teamwork
• Community
• Impact
• Transparent
• Forward-thinking
• Reliable
• Humble
• Partners
Imperatives Objectives Initiatives
Support the Destination
in Tourism Recovery
and Strengthen
Organizational Capacity
for Future Impact
• Recover/Achieve 2019
Occupancy Rate
• Increase Staffing budget
• Align on and implement tiered re-opening marketing and communication plan with key partners and stakeholders
• Advocate for organizational capacity to ensure the resiliency of AG’s tourism economy
• Enhance the tourism industry’s position and importance in AG’s economic recovery
Increase Brand
Awareness as a Central
California Destination
of Choice
• Increase share of
county visitor volume
• Increase use of shared
brand assets
• Differentiate AG brand's position in the larger SLO CAL travel market • Create a content library and tool kit to influence a unified brand approach • Pursue opportunities for collaborative and aligned promotional partnerships and messaging
Ensure the Quality of
our Brand Promise and
Visitor Experience
• Increase number of
visitor hours in market
• Increase length of stay
• Create a framework to evaluate and promote events that generate new and repeat visitors to the destination
• Encourage the availability of downtown and highlight opportunities • Design attractive trip itineraries to drive visitation to AG’s portfolio of experiences
Expand Stakeholder and
Community Engagement
to Create a Collaborative
and Supportive Tourism
Industry
• Increase representation
of lodging partners on
the Board
• Grow stakeholder
participation
• Increase resident
approval of tourism
• Create a stakeholder engagement and outreach campaign to educate and promote the value of the TBID to lodging partners • Collaborate with stakeholders to design and expand co-operative marketing programs
• Increase the voice of tourism with key governmental, businesses and community decision makers and leaders
2021–2024 Strategic Plan
4

Completed Initiatives
Now on
TikTok
As part of its owned media strategy,
Visit Arroyo Grande added TikTok to
its social media channels starting in
2022. The social media platform
provides users the opportunity to
explore new places through bite size
videos set to trending music and
compelling voice-overs. Presence on
the ever-growing platform expands
the destinations social media reach
and captures a new audience.

Authentic content was created
throughout the year and
user-generated content shared to
inspire overnight stays, and to
showcase all there is to see and do in
Arroyo Grande.

Framework for
Events and Grants
Visit Arroyo Grande worked with the
South County Chambers of Commerce
to develop a framework for tourism
driven event sponsorships and grant
requests. The framework identifies
times throughout the year submitted
event applications will be reviewed by
Visit Arroyo Grande and outlines
specific parameters around funding.

New Tourism
Website
VisitArroyoGrande.org is the number
one resource for destination-related
content. In April 2023, Visit Arroyo
Grande launched its redesigned
website providing a new look and feel
that aligns with brand colors and
themes. The new website displays
high-quality and branded imagery,
updated content including new blogs to
increase SEO, refreshed layouts, and an
improved navigation and browsing
experience across the site for users.
5

The Purposeful Family Traveler: Demographics
Ethnicity
77% White/Cauc.
11% Hispanic
2% Black/AA
14% Asian
7% Other
74% married
$173K household income

45.6 average age
42% children in household
78% graduated college
50% male 50% female
Target Audiences
Visit Arroyo Grande will align with Visit SLO CAL’s audience approach for the year ahead, evolving from specific personas to target “The Purposeful Traveler,” as well as a secondary audience called “The Outdoor Family.” Who is this audience? Purposeful Travelers live vividly and value simplicity, keeping life and the mind as uncluttered as possible. Authenticity and being true to oneself while maintaining strong personal relationships with family and friends is important. Curious and creative, they are open-minded, want to explore and learn about new things, and seek stimulating experiences. They are in tune with nature and themselves, doing activities they enjoy.

The Outdoor Family represents an audience who are frequent visitors to the region and who are likely to take an annual trip. These families represent the largest travel parties and longer stays, making this group the highest spending segment. Likely to drive to the destination, families participate in a range of outdoor activities on vacation, including going to the beach.

The Purposeful Traveler: Demographics
Ethnicity
50% White/Cauc.
30% Hispanic
6% Black/AA
12% Asian
3% Other
56% married
$129.2K household income

46.5 average age
40% children in household
41% graduated college
46% male 54% female
6

Geographic Markets
AG TBID will continue to focus on shorter drive markets throughout California, including the San Francisco Bay Area, Los Angeles, Sacramento and the Central Valley to generate overnight stays.
1 San Francisco Bay Area
3 Sacramento
4 Central Valley
2 Los Angeles
7

January–December 2021 Source: Visit SLO CAL, Dean Runyan Economic Impact Report, County of San Luis Obispo, United States Census Bureau, Tourism Economics *Calculations based on percentage not actual salaries and cost.

Why Tourism Matters
in SLO County
Travel Spending
$1.78B
$4.9M
a day
$203K
an hour
$3.4K
a minute
$56
a second
Tourism puts
19,760
people
to work each day
Tourism contributes
$58.7M
in transient
occupancy tax
revenue
(64% YOY Increase)
Without state and local
tax revenue generated
by travel and tourism,
each SLO CAL household
would pay an additional
$16,753 in taxes
Travel spending created $104M in local tax
revenue which would cover the expenses for
968 police officers’ salaries or…..
1,198 firefighters salaries or…..
2,208 teachers salaries or…..
167 miles of 2-lane resurfaced roads
8

Destination Campaigns
“No Weekend Needed”
Visit Arroyo Grande launched its “No Weekend Needed”
mid-week advertising campaign to promote off-season
overnight stays in the destination Monday to Wednesday.

The campaign targets Generation Y and retirees in key
California drive markets. Example messaging highlights cost savings as the biggest benefit of mid-week stays along with uncrowded access to dining and activities. Other
components of the campaign include:
• Central Coast Tourism Council co-op buy (ran Oct. 15, 2022 to Jan. 15, 2023), that targeted "Workcationers"
under the pillar of Agriculture/Culinary in Denver, Reno, Seattle, Portland, and San Francisco. Results included
114,951 impressions and 3,231 clicks.
• Photo shoot in November for new assets shot at various locations in The Village, resulting in three new creative sets deployed in December, January and February as part of the paid media strategy
• Instagram giveaway in January 2023 to create
awareness and increase social followers, with a prize
package that included a complimentary two-night hotel
stay, wine tasting for two, a gift card to a local brewery and gas gift card. The giveaway resulted in 238 new
Instagram followers.

Time Well Spent
Visit Arroyo Grande’s “Time Well Spent” campaign
(launched September 2021) continued to win industry
awards in FY 2022–23. The campaign received an Award of Merit at the 2022 PRSA Central California Image Awards
under the Campaign of the Year category. Central California Image Awards honor works of distinction in the practice of public relations by Central Valley professionals working in public relations, communications, marketing and advertising. The campaign focuses on the destination as a place “where experiences are naturally more full, more engaging, and more worth your time” and targets “The Purposeful
Traveler” persona. Three .15-sec. programmatic digital ads ran throughout the year that clicked thru to existing outdoor adventure, family fun and culinary itineraries on the website. 9

Results at a Glance
March–February YOY
16% increase
in website visits (sessions)
14% increase
in time on site
Reached 1,484,289
through paid media
Facebook
27,333 engagements
34% increase YOY
18,005
clicks from paid media
Instagram
11,959 engagements
81% increase YOY
Transient Occupancy Tax (TOT)
July–June Totals
2020–2021:
$1,016,301
2021–2022:
$1,472,554
2022–2023:
$886,452*
2019–2020:
$926,026
2018–2019:
$1,029,433
12% decrease
in pageviews
*Data represents July 2022 to January 2023
10

Email Marketing
Email marketing keeps Arroyo Grande top of mind for potential travelers and highlights the destination's unique offerings. The monthly newsletter is sent out to an opt-in subscriber database through Mailchimp with featured content covering the following:
• Specific themes from Arroyo Grande’s key messaging points • Promotion of events, new happenings and local businesses that support tourism
• Itineraries, activities, restaurants, accommodations and more that build interest in planning an Arroyo Grande
getaway, with URLs that link to the website

3.42%
average click rate
E-newsletter Results:
1,227
email subscribers
12 distributed newsletters

43.94%
average open rate
Industry benchmarks show an average open rate of

20.4% and click rate of 2.25%. Source: Mailchimp
11

Social Media
Visit Arroyo Grande developed engaging content on its owned social media channels (Facebook, Instagram, Twitter, and TikTok) with the goal to strengthen its brand identity and create awareness of the destination.
• Used new video/photo assets in social media posts
and stories
• Developed original content geared towards targeted
personas around local favorites including businesses,
history, people and artisans, etc. that highlighted the friendly and historic character of the destination
• Incorporated “Time Well Spent” and “No Weekend
Needed” campaign messaging
• Shared user-generated content to build audience and
to show authentic experiences
• Supported local events including a Jan. 2023 Instagram giveaway in collaboration with the Pismo Beach Jazz Jubilee and another collaboration with Laetitia Vineyard
• Created a TikTok account and posted 15 times on this
new platform
• Posted 20 Reels on Instagram
27,333 engagements (34% increase YOY)
11,959 engagements (81% increase YOY)
1,089,847 impressions (890% increase YOY)
731,375 impressions (179% increase YOY)
Facebook Results:

Instagram Results:
6,171 followers (2% increase YOY)
3,985 followers (31% increase YOY)
12

Paid Media
March 2022–February 2023 paid media included a mix
of programmatic video pre-roll, Google paid search, OTT, YouTube and social media channels. This omni-channel
digital strategy focused on awareness and engagement,
directing click traffic to the Visit Arroyo Grande website.

Programmatic video pre-roll had nearly 430,000
impressions and 2,000 clicks. Google paid search
resulted in 132,575 impressions and 10,237 clicks with
513 visits to the destination. OTT gained 156,308
impressions throughout this year and had a high completion rate of 98.40% (amount of viewers who saw the video ads through to completion). YouTube produced
290,959 impressions and 307 clicks with a strong video
completion rate of 81.20%. Engagement on Instagram
resulted in 359,715 impressions and 2,231 clicks. The
CCTC fall/winter co-op also produced 114,951 impressions and 3,231 clicks. Overall paid media brought in a combined total of 1,484,289 impressions and 18,005
clicks to the Visit Arroyo Grande website.

FY 2023 Media Timeline
*Arroyo Grande TBID leverages its regional partnerships with Central Coast Tourism Council and Visit SLO CAL for industry research and participates in reactive co-op print/digital advertising opportunities throughout the fiscal year.

Arroyo Grande
Media Breakout
OTT: 11%
CCTC Co-Op: 5%
YouTube: 10%
Paid Google
Search: 22%
Programmatic
Video: 34%
Print: 9%
Social Media: 9%

SLO CAL
Visitors Guide
South County
Visitors Guide
2022
July Aug Sept Oct Nov Dec Jan Feb Mar Apr May June
2023
Print Partnership Programs*
CCTC Co-op
Sunset Magazine
Social
Search
Video
13

In an effort to differentiate the brand's position in the larger travel market Visit Arroyo Grande leveraged its existing tourism partnerships with Visit California, Visit SLO CAL and Central Coast Tourism Council.

Public Relations & Partnerships
Visit California is the state marketing
agency that partners with the state’s
travel industry to keep California top-ofmind as a premier travel destination. • Visit Arroyo Grande submitted
story pitches and content for the
following marketing topics:
• Mother’s Day Escapes
• Outdoor Adventure
• Sea to Sip
• Coordinated MICHELIN Guide
California announcement for Ember
(November/December 2022)
Visit SLO CAL is the non-profit countywide destination marketing and management organization for San Luis
Obispo County. They are responsible
for promoting a community as an
attractive travel destination and
enhancing its public image as a dynamic
place to live and work. In addition to
submitting content about Arroyo
Grande for use in media pitching and
story lead generation, Visit Arroyo
Grande also partnered with them on the
following initiatives:
• SLO CAL Welcome—Online
customer service training for
customer-facing employees and
volunteers in Arroyo Grande’s
tourism and hospitality industry
• Mural Trail and Online Map—
Collaborative efforts for a
“Monarch butterfly migration”
themed mural wall in the Village of
Arroyo Grande by artist Buddy
Norton of Canned Pineapple Co.

The initiative highlights public art,
the unique richness of AG’s farming
community, and promotes
visitation to Arroyo Grande and
throughout SLO County.
• Attended SLO CAL Destination
Summit (November 2022)
The Central Coast Tourism Council is
a marketing organization that
promotes the Central Coast of California. Visit Arroyo Grande leveraged marketing efforts by participating in
the following programs:
• Event promotion and content
submissions
• Midweek Stay co-op (Fall/Winter
2022 and Spring/Summer 2023))
Partnerships:
14

visitarroyogrande.org
@visitarroyogrande @visitagca @VistitAGCA @visitarroyograndeca

FY 2022/23 AGTBID Budget FINAL
Beginning Fund Balance $ 325,075
(July 2021-February 2022 TBID Assesments = $183,588)
Revenue Source Amount
TBID Assessments $ 244,000
Interest 750
Appropriation from fund balance 48,250
Total Revenue $ 293,000
Activity Amount Amount
Advertising
Consultant Services $ 100,000 $ 500
Photo/Video Assets 15,000 15,000
Advertising Hard Costs 85,000 $ 15,500
Website 25,000
Sub-total Advertising $ 225,000
Services & Supplies $ 293,000
City - administrative $ 3,000
Chamber - Contract admin. 42,000
Supplies/Domains 2,500
Vacation rental code compliance 5,000
Sub-total Services & Supplies $ 52,500
Ending Fund Balance $ 276,825

REVENUES
Membership & Subscriptions
Activity

EXPENDITURES
CCTC
Total Expenditures
Co-op/Sponsorships
Sub-total Membership & Subs.

ATTACHMENT 3