v . 0 03 P a g e | 1
July 11, 2023
ITEM TITLE
Agreement: Approve the First Amendment to the Municipal Services Agreement with the San Diego Unified Port District Establishing a New Baseline Reimbursement Rate
Report Number: 23-0066
Location: Property located within the jurisdictional boundary of the City of Chula Vista, held in trust by the San Diego Unified Port District, and not subject to a commercial lease.
Department: City Manager
Environmental Notice: This activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required.
Recommended Action
Adopt a resolution approving the First Amendment to the Municipal Services Agreement with the San Diego Unified Port District for Police, Fire, and Emergency Medical Services for the period July 1, 2020 through June 30, 2030, establishing a new baseline reimbursement rate effective July 1, 2022.
SUMMARY
The City of Chula Vista currently provides police, fire, and emergency medical services to the San Diego Unified Port District (the “Port District”) pursuant to a Municipal Services Agreement for the period July 1, 2020 through June 30, 2030 (the “2020 MSA”). The subject services are provided on Port District tidelands that do not generate ad valorem property tax revenues to the City. It is therefore necessary and appropriate for the Port District to reimburse the City for the reasonable cost of providing these public safety services.
If approved, the First Amendment to the 2020 MSA would establish a new baseline reimbursement rate effective July 1, 2022. The Port District Board of Port Commissioners ( the “Port District Board”) approved the First Amendment at its May 9, 2023 meeting. Council approval of the First Amendment is recommended.
ENVIRONMENTAL REVIEW
The Director of Development Services has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a “Project” as defined under P a g e | 2
Section 15378 of the State CEQA Guidelines because the proposed activity consists of amending a reimbursement agreement, which does not re sult in a physical change in the environment; therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines, the activity is not subject to CEQA. Thus, no environmental review is required.
BOARD/COMMISSION/COMMITTEE RECOMMENDATION
Not applicable.
DISCUSSION
The City of Chula Vista has provided police services to the Port District since 1984 and has provided fire & emergency medical services since 1991. Municipal Service Agreements (“MSA(s)”) between the two agencies provide a mechanism to reimburse the City for the reasonable cost of providing police, fire, and emergency medical services on the tidelands within the City’s jurisdictional boundary that do not generate ad valorem property tax revenues. The subject properties include non -dedicated streets, parks, and other open space; unleased developed properties; leased properties wherein the lessee is not subject to ad valorem taxes; and unleased land (see Attachment 1).
The City provides police, fire, and emergency medical services on the non-ad valorem tidelands to the same extent, and in the same manner, that it provides services to ad-valorem tax generating properties within the City. For the Police Services portion of the MSA, services pro vided by the Chula Vista Police Department (CVPD) include, but are not limited to, responding to calls for service from the public, responding to calls for backup, proactive patrols, responding to calls for Harbor Police for CVPD assistance, and activities of support staff. Support staff activities include, but are not limited to, investigating, supervising, dispatching, and other activities or events that call for the deployment of public safety officers.
For the Fire & Emergency Medical Services portion of the MSA, services provided by the Chula Vista Fire Department (CVFD) including responding to all calls for fire suppression services and all calls for emergency medical services, to the extent that the City is required to respond by the county, state, or federal government.
Support services are also provided, including but not limited to, investigating, supervising, dispatching, and other activities that support the deployment of fire suppression and emergency medical personnel.
2020 MSA
The 2020 MSA runs from July 1, 2020 through June 30, 2030 (see Attachment 2). The 2020 MSA established a baseline rate of $1,103,646 for fiscal year 2021, with annual baseline rate increases of 3%, effective July 1, 2021 and each July 1 thereafter. With the application of the 3% baseline rate increases effective July 1, 2021 and July 1, 2022, the baseline rate increased to $1,170,859 in the current fiscal year, as summarized in Table 1 below.
P a g e | 3
Table 1 – Base Escalation to Date
Service
FY 2021
Base
FY 2023
Escalated
Base
Police Services $ 957,984 $ 1,016,326
Fire & Emergency Medical Services $ 145,662 $ 154,533 Total All Services $ 1,103,646 $ 1,170,859
The 2020 MSA introduced the concept of periodic baseline resets, effective July 1, 2022 and July 1, 2025. The periodic baseline resets are a contractually agreed upon method for the City and Port District to regularly renegotiate the baseline reimbursement rate and the associated scope of services.
As required by Section 3.b of the 2020 MSA, the City and Port District met and conferred regarding the baseline rate reset scheduled for July 1, 2022. After extensive consultation with CVPD and CVFD leadership and a robust ne gotiation process with Port District leadership , City and Port District staff agreed on a new baseline rate of $1,473,214 ($1,114,279 and $358,935 for Police and Fire/Emergency Medical Services, respectively). This reflects a net increase in reimbursement in the current fiscal year totaling $302,355. City staff believes that this new rate reasonably reflects the fair-share cost of providing the subject public safety services to the Port District.
First Amendment to the 2020 MSA
The proposed First Amendment to the 2020 MSA reflects 1) the agreed upon baseline reset amount of $1,473,214, effective July 1, 2022; and 2) provides for a one-time true up payment to the City in the amount of $302,355 to reconcile payments made fiscal year to date with the new baseline rate (the “First Amendment”, see Attachment 3). No other modifications to the 2020 MSA are recommended at this time. If approved, the new baseline rate would be subject to a 3% annual increase effective July 1, 2023 and each July 1st thereafter.
The Port District Board approved the First Amendment at its May 9, 2023 meeting. Council approval of the First Amendment is recommended.
The next baseline reset negotiations will be undertaken in January 2025, with a new baseline rate to be effective July 1, 2025. No additional periodic baseline rate resets are contemplated by the 2020 MSA.
DECISION-MAKER CONFLICT
Staff has reviewed the property holdings of the City Council members and has found no property holdings within 1,000 feet of the boundaries of the property which is the subject of this action. Consequently, this item does not present a disqualifying real property -related financial conflict of interest under California Code of Regulations Title 2, section 18702.2(a)(7) or (8), for pur poses of the Political Reform Act (Cal. Gov’t Code §87100, et seq.).
Staff is not independently aware, and has not been informed by any City Council member, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter.
P a g e | 4
CURRENT-YEAR FISCAL IMPACT
The 2020 MSA established a baseline rate of $1,103,646 ($957,984 and $145,662 for Police and Fire/Emergency Medical Services, respectively), with annual baseline rate increases of 3%, effective July 1, 2021 and each July 1 thereafter.
With the application of the 3% baseline rate increases effective July 1, 2021 and July 1, 2022, the baseline rate increased to $1,170,859 in the current fiscal year ($1,016,326 and $154,53 3 for Police and Fire/Emergency Medical Services, respectively).
Approving the First Amendment to the 2020 MSA increases the reimbursement from the Port District to the City in the current fiscal year by $302,355, for a total reimbursement of $1,473,214, as summarized in Table 2 below.
Table 2 – Current Year Fiscal Impact
Service
FY 2023
Escalated
Base
FY 2023
Proposed
Amendment
FY 2023
Increase
($)
Police Services $ 1,016,326 $ 1,114,279 $ 97,953 Fire & Emergency Medical Services $ 154,533 $ 358,935 $ 204,402 Total All Services $ 1,170,859 $ 1,473,214 $ 302,355
These additional revenues were included in the 3rd Quarter Financial Report for Fiscal Year 2023, presented to the City Council on May 23, 2023.
ONGOING FISCAL IMPACT
Approving the First Amendment to the 2020 MSA increases the FY 2023 baseline reimbursement to the City to $1,473,214. This amount will be subject to 3% annual increases effective July 1, 2023, and each July 1 st thereafter. Of the reimbursements due to the City, the majority have been previously dedicated to the repayment of debt associated with the development of the Gaylord Pacific convention center and related public improvements on the Chula Vista Bayfront. The following table summarizes the anticipated reimbursements to the City through the remaining term of the 2020 MSA, the amount of such reimbursement dedicated to the Bayfront project financing, and the net funds to the City.
Table 3 – Ongoing Fiscal Impact
Fiscal
Year Police
Fire & Emergency
Medical Services Total
Bayfront
Financing
Commitment Net Impact
FY 2023 $ 1,114,279 $ 358,935 $ 1,473,214 $ 1,213,424 $ 259,790 FY 2024 1,147,707 369,703 1,517,411 1,249,827 267,584 FY 2025 1,182,139 380,794 1,562,933 1,287,322 275,611 Future Baseline Reset Effective July 1, 2025
FY 2026 1,217,603 392,218 1,609,821 1,325,941 283,879 FY 2027 1,254,131 403,985 1,658,116 1,365,720 292,396 FY 2028 1,291,755 416,104 1,707,859 1,406,691 301,168 FY 2029 1,330,507 428,587 1,759,095 1,448,892 310,203 FY 2030 1,370,423 441,445 1,811,868 1,492,359 319,509 P a g e | 5
The adopted FY 2024 budget reflects the revenues due to the City pursuant to the First Amendment.
As noted in Table 3, a future baseline reset will be considered by the City and Port District, and, if agreed upon, would be effective July 1, 2025. The fiscal impacts of this future negotiation cannot be anticipated at this time.
ATTACHMENTS
1. Non-Ad Valorem Tidelands Map
2. 2020 MSA
3. First Amendment to the 2020 MSA
Staff Contact: Tiffany Allen, Assistant City Manager