Agenda Item No. 8
CITY COUNCIL STAFF REPORT
TO: Honorable Mayor and City Council DATE: July 25, 2022 FROM: Matthew Bronson, City Manager
PREPARED BY: Matthew Bronson, City Manager
SUBJECT: Five Cities Fire Authority Update
RECOMMENDATION
Receive an update on the results of the Oceano Fire Tax Measure A-22 on the June 2022 election and the process for a wind down period as defined by the Third Amendment to the Five Cities Fire Authority Joint Exercise of Powers Agreement.
BACKGROUND
On June 22, 2020, the Council approved a Third Amendment to the Five Cities Fire Authority (FCFA) Joint Exercise of Powers Agreement given the narrow failure of the Oceano Community Services District (OCSD) Fire Tax Measure A-20 in March 2020. Measure A-20 would have assessed a parcel tax on Oceano properties to generate an additional $422,000 annually for fire and emergency medical services in Oceano. The measure needed 2/3 vote and received 66.6% approval only failing by 10 votes. As a result, the Third Amendment continued the funding formulas set forth in a prior amendment with a commitment from OCSD to seek a new tax measure in 2022. This Third Amendment locked in member contributions at FY 2019-20 levels for a three-year period to provide stability in fire service costs in light of economic challenges at the time related to COVID-19. The amendment also specified a 12-month “wind down” process if the future Oceano tax measure failed which would result in OCSD no longer being a member of the FCFA Joint Powers Authority (JPA).
Measure A-22 was subsequently placed on the ballot in Oceano by OCSD in June 2022 as stipulated under the Third Amendment. The election results certified on July 7, 2022 showed the measure failed to gain a 2/3 majority similar to 2020 with a lower approval percentage of 58%.
With the failure of Measure A-22, the “wind down” process goes into effect and OCSD will cease to be a member of the JPA effective June 30, 2023. Below is a summary of the major work program tasks during this wind down period as defined in the Third Amendment:
• Establish distribution of assets of the JPA
• Establish obligations of the JPA including:
o Lease payments on equipment and apparatus
o Unfunded PERS liabilities for disassociating or withdrawing member agency o Other employment-related liabilities
• Post and determine reconciliation of assets and liabilities with any party owing funds to the other(s) paying such funds to the appropriate agencies A summary of this wind down process was shared on July 15, 2022 with the FCFA Board and separately with the FCFA Managers Group comprised of the City/General Managers of the three member agencies. The FCFA staff report is shown as Attachment 1 and includes the list of work Staff Report: Five Cities Fire Authority Update Page 2
July 25, 2022
program tasks, flow chart of decision-making, and the Third Amendment document. Staff would defer to the Council’s representative on the FCFA Board (Mayor Lee) to provide further information from the Board perspective. The Managers Group will meet regularly during the fiscal year to oversee the implementation of the wind down process and the expected dates of completion for each work program task. FCFA staff has completed much of the required inventory identification and equipment valuation and has engaged an actuary to carry out the necessary analysis on pension liabilities. Fire Chief Lieberman will be at the July 25th meeting and can provide information on this work done by FCFA staff.
In addition, there will be a separate process between the remaining FCFA member agencies (cities of Grover Beach and Arroyo Grande) about the desired level of fire and emergency medical services and funding needs in the respective communities. The discussions, led by the City Managers of the two cities, will also include negotiations regarding modification or dissolution of the JPA and potential contract service delivery. This work will incorporate the information about potential fire services options presented to the Council on October 12, 2021. This process is anticipated for completion in early 2023 with Council action that will inform the development of FY 2023-25 Council Goals and two-year budget and ensure continuous service beginning July 1, 2023. Staff will share regular updates with the Council and will bring an agenda item on the status of this process to the Council this fall for input and direction.
FISCAL IMPACT
There is no fiscal impact to this agenda item.
ALTERNATIVES
The Council has the following alternatives to consider:
1. Receive an update on the results of the Oceano Fire Tax Measure A-22 on the June 2022 election and the process for a wind down period as defined by the Third Amendment to the Five Cities Fire Authority Joint Exercise of Powers Agreement; or
2. Provide alternative direction to staff.
PUBLIC NOTIFICATION
The agenda was posted in accordance with the Brown Act.
Attachments
1. July 15, 2022 FCFA Staff Report on Measure A-22 and Wind Down Process Attachment 1